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Hospira, Inc., (NYSE:HSP)

Q4 2008 Earnings Conference Call

February 17, 2009 9:00 am ET

Executives

Christopher B. Begley - Chairman and Chief Executive Office

Terrence C. Kearney - Chief Operating Officer

Thomas E. Werner - Sr. Vice President, Finance, and Chief Financial Officer

Karen King - Vice President, Investor Relations

Analysts

Taylor Harris - J.P. Morgan

David Roman - Morgan Stanley

Danielle Antalffy - Leerink Swann

Junaid Husain - Soleil Securities

David Bachman - Longbow Research

Gregory Gilbert - Bank of America

Operator

Welcome to Hospira’s fourth quarter 2008 earnings conference call. (Operator Instructions). I will now turn the call over to Karen King, Vice President of Investor Relations. Karen, you will now begin your conference.

Karen King

Good morning everyone. Welcome to our conference call and webcast regarding Hospira’s financial results for the fourth quarter and full year 2008. Participating in today’s call are Chris Begley, Chairman and Chief Executive Officer of Hospira; Terry Kearney, Chief Operating Officer; and Tom Werner, Senior Vice President, Finance and Chief Financial Officer.

We will be making some forward-looking statements today, which are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those indicated.

A discussion of these factors is included in the Risk Factors and MD&A sections in Hospira’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q on file with the SEC. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments.

In today’s conference call, non-GAAP financial measures will be used to help investors understand Hospira’s base business performance. These non-GAAP financial measures are reconciled to the comparable GAAP financial measures in the press release and Form 8-K issued this morning and are also available on the presentations page in the Investor Relations section of our website.

With that, I’ll now turn the call over to Chris.

Christopher B. Begley

Good morning everyone. 2008 was once again another good year for Hospira; one in which we delivered solid revenue and strong profit growth. In addition, we made significant advancements in many key areas of our business. Net sales in 2008 increased 6% including the impact of foreign exchange to $3.6 billion driven by growth in both our specialty injectables and medication management system product lines. We increased both our adjusted gross margin and adjusted operating margin and generated a healthy cash flow from operations of $584 million. Adjusted diluted earnings per share grew 16% to $2.53 and our dedicated focus on execution resulted in many notable achievements in 2008.

We completed the integration of the remaining Mayne commercial operations; the combination of the two companies created considerable value for Hospira making us a stronger global company and augmenting our specialty injectables pharmaceuticals portfolio. We expanded our relationships with two of the largest group purchasing organizations in the US giving us greater customer access. We were awarded contracts for solutions and equipment in our MMS products by both HealthTrust and Premier Purchasing Partners, which we believe will drive additional IV solutions share, competitive pump captures, and increase specialty injectables pharmaceutical volumes.

In specialty injectables pharmaceuticals, we launched four new generic injectables in the US and eight in other countries around the world. In addition, we introduced 34 generic compounds already in the company’s portfolio in two additional countries. We made significant progress in our biogenerics program launching Retacrit, the generic version of erythropoietin in 13 countries in Europe during the year. We also completed the phase 3 clinical trials for G-CSF ahead of schedule, and we signed an agreement with Human Genome Sciences, which provides us access to large-scale mammalian biological manufacturing capabilities. These capabilities allow us to meet our biogeneric development needs until a regulatory pathway is established in the United States.

We received FDA approval for the procedural sedation indication for Precedex, our proprietary IV sedation agent. The approval for this expanded indication makes Precedex available to a broader range of patients undergoing a wider variety of procedures. We were also very pleased with the article in the most recent issue of JAMA, which highlighted the positive results of our trial for the long-term sedation indication. We are currently awaiting word from the FDA on its decision regarding this indication.

In MMS, we augmented our offerings with the acquisition of Sculptor Developmental Technologies and its VeriScan Rx Medication System, as well as with the EndoTool Glucose Management System, a highly sophisticated software system. Both technologies complement our medication management system offerings and are expected to enhance our ability to help customers improve patient outcomes, safety, and hospital productivity. These acquisitions highlight our growing focus in the area of clinical decision support systems as a future growth driver in MMS.

And in the fourth quarter, we introduced the smart version of our popular ambulatory infusion system, GemStar. GemStar’s safety software advances patient safety by helping reduce medication errors in programming the process and by enhancing clinical workflow. With this advancement, our leading infusion pump families now all include smart offerings underscoring our commitment and leadership in improving patient safety.

Heading into 2009, we are working aggressively to capitalize on our significant opportunities for growth while at the same time positioning Hospira to successfully navigate through the uncertainty surrounding the overall economic environment and its potential impact on our businesses.

Focusing first on pharma; we’ve seen public data over the past few months that show a reduction in elective surgeries and hospital admissions correlated to the economic slowdown and the corresponding rise in unemployment. While we do not believe the reduction in hospital admissions had a significant on our fourth quarter results. We do have certain drugs in our pharmaceutical portfolio that are used in elective surgeries such as anesthesia drugs and antibiotics. However, these drugs are also used for acute care and inpatient surgeries, procedures which we believe will not be impacted by the economy. Based on the possibility of a protracted decline in hospital admissions, however, we assumed a slight reduction in our forecasted SIP growth.

On the MMS side of the business, we believe our devices are increasingly important products for our customers in the areas of reducing medication errors and improving patient safety. Approximately 40% of our MMS sales or 7% of our total sales are related to capital purchases, with the remainder being recurring revenue related to the disposable sets. We have been very forthright in saying that as the economy continues to deteriorate and credit markets tighten, there will be a headwind around capital availability for hospitals. To date, we have experienced some tightening of MMS capital demand. Our customers value our devices and continue to sign orders, but we are seeing an increase in request for alternate financing and delays in customer shipments. So, while a customer may sign a pump contract, they may ask us to hold off on implementation for an extra quarter or two.

Like many companies, we have set into motion several steps, which we believe will help mitigate potential economic impact on our business. These actions include reducing our discretionary spending, instituting a hiring freeze on non-critical positions, slowing capital spending, and freezing salary increases for employees at all levels of the corporation in 2009. Many of these actions have not been taken solely in response to the global recession. Instead, they are a part of a broader project we have been developing to capitalize on our potential to improve total shareholder return and pursue operational excellence.

To provide a little history on this project, we spent a good deal of time in 2008 measuring our financial progress and related metrics against our peers. We have made significant progress over the past five years. We transformed Hospira from an underinvested no-growth business with declining margins to a company with top-line growth and improving margins. Our gross margin increased by over a 1000 basis points and our operating margin increased by approximately 400 basis points; but as far as we have come, our analysis told us that we still only measure as average against our peers from operating margins to return on invested capital. We are certainly not satisfied with being in the middle and we know we can do better. This compelled us to move forward with the project we call Fuel, which is aligned with our overall strategy to improve margins and cash flow and drive sustained growth for Hospira.

In January, we announced to our employees the first of what will be several phases of Project Fuel. In addition to the cost containment measures I mentioned previously, the first phase includes streamlining our organizational structure to optimize operational effectiveness. To reduce complexity, we have dissolved the global pharma and global device strategic business unit structure, centralizing our global marketing strategy and business developmental activities to best meet the needs of overall company and better support the geographic regions. We have also streamlined our senior leadership team to more effectively enable change and focus the business. These actions will drive further efficiencies and better enable us to take advantage of growth opportunities.

The next phases of Project Fuel will include streamlining processes, reducing product line complexity, and aggressively managing low-margin product lines. In addition, we believe there is opportunity to improve efficiency of performance in several departments such as global procurement, finance, IT, US sales force, and R&D. We are in the midst of a detailed review of those particular areas. Our senior leadership team and I look forward to sharing with you the details of Project Fuel over the course of the next several quarters. We will also discuss Project Fuel as part of our broader strategy at our second Analysts Day, which we will host on September 17, 2009, in Chicago.

Terry and Tom will now provide more detail on our results for the quarter and the year as well as our expectations for 2009 after which I’ll finish with a few more comments before we take questions.

Terrence C. Kearney

On our third quarter conference call, we provided sales growth projections for the full year of 6% to 7% based on constant currency and came in just shy of our projected sales growth at 5%. Our specialty injectables grew 8.5% for the year while medical management grew approximately 11%. The primary reasons for the shortfall were the continued delay of Zosyn, lower than expected pump sales, and lighter wholesaler volumes. I will briefly walk through each factor. First, the delay of Zosyn. On our last call, we said that our product application had cleared all the technical hurdles with the FDA and all that remained was the final labeling and a ruling on a citizen’s petition. That remains true today. Because Zosyn is a partner product where we share profits it had a more significant impact on sales than it did on the bottom line. While the delays have decreased our certainty regarding an FDA approval date, we have assumed a major launch in our 2009 plan.

Second, lower than expected pump sales. As Chris mentioned, while we are pleased with the number of signed contracts and our growth during the quarter, certain customers decided to defer implementation of their pumps until future quarters reflecting the tight credit markets. So, we believe the shortfall was more of a timing issue than lost revenue and we expect the deferred placements to occur in 2009.

Third, lighter wholesaler volumes. During the fourth quarter of 2007 and the first quarter of 2008, we experienced unusually high purchasing patterns from our wholesalers. While we did anticipate that we would repeat these high levels of purchases, we did assume based on historical patterns, that we would see some increase in volume during the fourth quarter. Actual wholesaler volumes came in lighter than our expectations.

I will remind everyone that references to sales results will be on a constant currency basis which excludes the impact of foreign currency fluctuations. Please refer to the table in the schedules accompanying our press release that shows the impact of foreign currency by segment and product line.

Moving to segment performance, I will begin with the Americas where overall sales were up 1% in the quarter and 5% for the full year. Strength in MMS was somewhat offset by softness in pharma. Specialty injectables sales were up 1% in the quarter and 7% for the full year. Results for the quarter reflect a difficult comparison to last year’s fourth quarter where we benefited from unusually strong wholesaler stocking levels in the US. In addition, we experienced less than anticipated stocking levels in the fourth quarter of the year. The business remains healthy. This becomes evident when we look at end-user sales for the quarter which reflects product sold from the wholesaler to the hospital customer. Our analysis indicates that end-user sales increased approximately 10% over fourth quarter of 2007 reflecting strong demand for SIP products and a more accurate measure of consumption of our products in the marketplace.

For the full year, we grew in excess of the market as we experienced solid increases in both our base business and new product sales. We saw particularly strong contributions from new first to market products such as irinotecan, ciprofloxacin premix, and more recently Rocuronium, which we launched in December. In addition, we benefited from higher sales as a result of the share gains we achieved last year with both our GPO pharmacy awards and competitor supply issues. As Chris mentioned, Precedex was also a highlight during 2008, in part due to the approval of the additional label indications we received in October.

Turning to other pharma, we continued to experience anticipated declines on lower sales to Abbott as well as softness in our contract manufacturing business. While we are seeing decreased demand from certain customers, we have been extremely successful in securing new business, which is filling the pipeline nicely. We have more than doubled the pipeline in the just the past couple of years, which speaks to the future potential for the business. On average, it takes approximately three years before a product is approved for commercial sale as many new contracts are for products that are still in late stage clinical trials. Contract manufacturing remains a solid business for us contributing strong margins.

Moving now to medication management systems, we were pleased with the performance in MMS, which contributed double-digit sales growth of 12% in the quarter and 11% for the full year. We continue to see strong adoption of Symbiq, our newest and most technologically advanced pump, and most of this quarter’s growth was due to Symbiq placements. For the full year, about 75% of our Symbiq placements were with competitive accounts.

We showed a strong increase in overall pump placements contributing to the 7% growth of our overall US installed base in 2008 versus 2007. In addition, we continued to drive adoption of MedNet, our safety software application. At the end of 2008, MedNet’s penetration of our US installed base of MedNet compatible devices was 60%. The premium wireless version remains the preferred choice of customers with more than 90% of the year’s safety software placements being for wireless MedNet.

We are also pleased with the initial customer response of our newest technology in clinical support software application. VeriScan, a barcode enabled medication administration system and EndoTool, our new glucose management system, both represent important enhancements to our strategy as we expand our MMS portfolio of offerings to customers. These technically sophisticated applications are designed to improve both patient safety and outcomes as well as enhance workflow.

Moving to the EMEA region; overall sales in the region declined 7% in the quarter. Strength in MMS was offset by declines in other pharma. Sales for the full year were up 2%. Specialty injectables sales at EMEA were flat for the quarter and increased 8% for the year. Impacting the quarter’s performance was continued pricing pressure, as expected and a delay of a few new product launches tied mainly to country specific regulatory issues outside of our control. For the year, we made significant volume gains on some of our strong performers like irinotecan, gemcitabine, and paclitaxel.

2008 was a year of investment for the region with particular emphasis on successfully completing the Mayne integration and launching our first biogeneric Retacrit in 13 European countries with results in line with our expectations.

In the commercial infrastructure we built up to support our growing European biogenerics program has served us well in promoting our small molecule oncology products. We expect to benefit from even better leverage of our investment in the region as greater adoption and acceptance of biogenerics increases.

Other pharma was down 26% for the quarter and 8% for the year. The weakness in other pharma was driven by the same factors that affected performance in the Americas. MMS contributed strong performance in the EMEA region on both a quarterly and full year basis. MMS sales grew 12% during the quarter and 8% for the full year. We continued to roll out language translations of several of our infusion devices as well as driving increased penetration of our popular GemStar ambulatory pump. We plan to add a new smart version of the GemStar device to our MMS portfolio in the EMEA region during 2009.

For Asia Pacific, the region ended the year with strong sales building on the momentum of the past several quarters. Sales in the fourth quarter grew 24% on continued strong double-digit performance in both SIP and MMS. Full-year sales in the region increased 16%. Specialty injectables were up 28% for the quarter and up 20% for the full year. Specialty injectables benefited from a very strong quarter for in-license proprietary pharmaceuticals in Australia and for Precedex across the region, particularly in Japan. Irinotecan and oxaliplatin, which we launched during the year in several Asian markets, contributed to specialty injectables’ strong results. MMS sales also showed double-digit growth for both the quarter and full year, up 12% and 16% respectively. We experienced a significant number of device placements in Hong Kong where we are the market leader and we continue to see strong momentum for placement of Plum and GemStar pumps in key markets throughout the region.

Before turning the call over to Tom, I will provide an update on our drug pipeline which we do on an annual basis during this call. At December 31, 2008, our pipeline had a total of 40 compounds. The pipeline represents a total of 67 regional launches including more than 25 in the United States. The global branded market value of the small molecule compounds in the pipeline is approximately $14 billion. While the third pipeline contains a few less compounds than last year; this is mainly due to the fact that we are focusing on more differentiated, complex, and higher-value drugs which has increased the average failure proposition per drug. Of the pipeline’s 40 compounds, 21 have been submitted for approval in one or more regulatory agencies. The local market value of the 21 filed compounds is approximately $8.5 billion. Of that dollar value, roughly a third relates to compounds where we are currently challenging the patents or where there is some risk associated with launch timing.

In terms of therapeutic areas, almost 40% of the total pipeline compounds are related to oncology which aligns with our increased focus on this fast growing area, and further shows not only the strategic but future financial importance of the Mayne acquisition.

Thomas E. Werner

Net sales in the fourth quarter were $914 million, down 3% from last year, but actually up 2% on a constant currency basis. Net sales for the year were $3.6 billion, an increase of almost 6% and 5% on a constant currency basis. Fourth quarter adjusted gross margin was 41.2%, an increase of 280 basis points over the fourth quarter of 2007. Favorable volume and mix, improvements in manufacturing efficiencies, and favorable foreign exchange impacts contributed to the strong margin performance during the quarter.

For the full year, adjusted gross margin was 39.3%, a 70 basis-point improvement over full year of 2007. Adjusted R&D expenses in the quarter were $53 million, relatively flat from the fourth quarter of 2007, and for the full year, adjusted R&D increased 5% to $210 million or 5.8% of sales in line with 2007. Driving most of the increase for the year was a ramp-up of investment in our biogenerics program in support of our G-CSF trials as well as continued investment in our specialty injectables pipeline and MMS projects. Adjusted SG&A expense decreased 14% in the quarter to $135 million from $157 million in the fourth quarter last year. Adjusted SG&A as a percent of sales was 14.8% compared to 16.6% in the fourth quarter of 2007. The decrease primarily reflects the results of our increased focus on cost containment and favorability related to the timing of employee benefit costs.

For the full year, adjusted SG&A as a percent of sales was 15.7% compared to 15.9% in 2007. Adjusted operating income for the quarter was $188 million compared to $154 million last year, an increase of 23%. Adjusted operating margin was 20.6% versus 16.2% a year ago, and for the full year, adjusted operating income grew 12% to $647 million. Full year operating margin was 17.8% versus 16.9% in 2007. Adjusted interest expense decreased 13% for both the quarter and the full year, mainly because of the lower average outstanding debt in 2008 versus 2007. In 2008, we paid down a total of $95 million of Mayne acquisition related debt during the year.

Our tax rate, on an adjusted basis in the quarter was 20.4%, lower than the rates in the other three quarters of the year due to the extension of the US Federal R&D tax credit and a favorable shift in income to tax jurisdictions outside the US bringing our full year adjusted tax rate to 24%.

Moving to EPS performance, adjusted diluted EPS increased 24% in the fourth quarter to $0.78 per share compared to $0.63 per share last year. Full year ’08 adjusted diluted EPS was $2.53, an increase of 16% over 2007. Several items are excluded from the adjusted diluted EPS. They fall into two categories. First, acquisition related items and second, expenses related to our facilities optimization initiatives. For the fourth quarter, the acquisition related items represent $0.09 per share and the facilities optimization expenses represent $0.04 per gap diluted share. For the full year, gap diluted EPS included $0.40 related to acquisition items and $0.14 related to facilities optimization expenses.

Turning to the cash flow statement, our cash flow from operations totaled $255 million in the fourth quarter, a 30% improvement over last year’s fourth quarter. For the full year, cash flow from operations was $584 million compared to $551 million in 2007. Free cash flow, defined as cash flow from operations less capital expenditures, also improved for the year. Free cash flow as a percent of sales was 12% in 2008 versus 10% in 2007. Capital spending in the quarter was $37 million, down from $82 million in the fourth quarter of 2007; this mainly related to tighter spending controls as well as lower spending in 2008 related to the company’s manufacturing optimization initiatives. On a full year, capital spending totaled $164 million, down 22% from 2007’s $211 million.

Depreciation and amortization were $60 million in the quarter compared to $62 million in the fourth quarter last year. For the full year, depreciation and amortization totaled $252 million including $63 million of intangible amortization related to the Mayne acquisition. Depreciation and amortization in 2007 were $235 million. From a liquidity perspective, at the end of 2008, we had paid down a cumulative total of approximately $500 million of debt since we began paying down Mayne related acquisition debt in 2007, $95 million of which we paid in 2008. We continued to generate healthy cash flow from operations and are on track to pay our current debt obligation of $300 million, which comes due in June 2009. In addition to cash on hand, we have a committed bank revolver of $375 million to draw upon, so combined with our year-end cash balance of $484 million, this gives us access to approximately $860 million in liquidity to meet our future needs.

I would like to now move to our projections for 2009, first starting with sales. For a full year, we continue to discuss net sales growth on a constant currency basis. We expect net sales growth of 4% to 6% for the full year in 2009. Because of the anticipated negative foreign exchange impact, however, we expect our reported sales growth to be relatively flat, which assumes current exchange rate levels. The primary drivers of the constant currency sales growth are new product launches as well as the introduction of current products in new markets, MMS opportunities resulting from GPO device contracts, and finally, full year gains derived from the pharma and solutions GPO contracts awarded in 2008.

Our pipeline continues to be robust. We have approximately 25 drugs scheduled to launch in various regions over 2009 and 2010. The split of drugs between the years is roughly equivalent. Both years combine larger drugs with significant potential and smaller drugs that help drive growth. While we expect solid growth from all these factors, we’ve tempered our growth assumptions somewhat to reflect a possible impact of the global recession on our business in 2009.

In the Americas region, we estimate specialty injectables sales to grow 5% to 7%. We’re planning to introduce azithromycin during the second quarter and have built a mid year launch for generic Zosyn into our projections. In addition, we will receive a full year benefit from our 2008 drug launches such as irinotecan and rocuronium. For vancomycin, we’ve assumed that those competitors who are currently approved will participate in the market in 2009. We’re bolstering our vancomycin portfolio having recently received approval for the commonly prescribed 750-mg presentation in vial format.

We also project MMS sales in the Americas region to grow 5% to 7%. While we ended 2008 with strong double-digit sales, we believe that the economic recession and capital constraints will impact hospital buying decisions. As both Chris and Terry mentioned in their remarks, while we’re still seeing strong interest from customers for our devices, more customers are looking for alternate financing arrangements and delaying the implementation of the pumps.

Total sales in the Americas region are expected to grow 4% to 6% based on solid growth in both SIP and MMS off slightly by slower growth in our non-core areas.

Turning to EMEA, we estimate net sales to growth 1% to 6% in 2009 which reflects our assumption of tempered growth as a result of the global recession. While we anticipate continued pricing pressures, we do expect volume growth. In addition, we’re increasing the region’s pipeline planning to file significantly more applications of new products than we have over the past 2 years. This should position the region nicely for new product launches in Europe in 2010 and beyond. We expect to launch a few new products in the region in 2009 including gemcitabine. We’ll continue to roll Retacrit out into new countries including key markets such as Italy and France.

For MMS we anticipate a milestone for MedNet in the region with the expected introduction of the first language translation of Hospira MedNet in Spanish. We’re also promoting our MMS portfolio aggressively in the Middle East, a growing market and one which values the medication safety features of our Smart infusion systems.

Finally, turning to Asia-Pacific, we estimate net sales to grow 5% to 10% in 2009 which again assumes an impact from the global recession. Over the past couple of years, we’ve made a concerted effort to bring key products to Asia-Pacific to develop a strong regional portfolio. We now offer these products such as vancomycin and paclitaxel across Asia-Pacific, and we plan to launch several additional generic products during the year, also including gemcitabine. We also anticipate the approval in Australia for the long-term indication of Precedex in the second half of ’09.

We expect a positive momentum for device placements to continue in ’09. We’ve made significant progress in bringing Plum A+ and GemStar to key countries in Asia-Pacific and will build on that momentum in ’09 by expanding our presence in targeted Asia markets such as China and Korea. In addition, we’ve completed our Symbiq trials in Australia and plan to introduce the pump in that market later this year.

Now, before I move further through the income statement, I’d like to provide some color around the quarters for 2009.

For the first quarter we anticipate net sales at constant currency to be relatively flat and adjusted EPS which does include the negative impact of foreign currency to be flat as well compared to the first quarter of ’08.

Now, the sales pattern in Q1 is due to two things; first, in specialty injectables, we experienced unusually high purchasing patterns from our wholesalers in the first quarter of ’08. We don’t anticipate a repeat of these high volumes as we believe wholesalers are currently managing their inventory in proportion to demand. Secondly, in MMS, our first quarter traditionally is our softest quarter of the year. This is due to the timing of hospital budget cycles and the start of a new implementation cycle following the completion of our contract negotiations in the second part of the year.

Now, for the remaining three quarters we expect top-line growth to be fairly consistent with one another and absolute expense levels to remain relatively flat. We anticipate the second and third quarters will contribute the strongest adjusted EPS growth returning to relatively flat growth in the fourth quarter.

Now, moving to the rest of the income statement, we anticipate continued improvement in our adjusted gross margin and are projecting a range of 39.5% to 40%. The increase is expected to be driven by continued improved product mix and manufacturing efficiencies. Adjusted R&D is expected to remain consistent with our level of spending throughout 2008 and is projected to be in the range of 5.8% to 6.1% of sales.

To rigorous cost containment efforts and operational efficiencies, we’re projecting adjusted SG&A expense as a percent of sales to be in the 15.3% to 15.6% range for the year. Below the operating line, we’re forecasting adjusted net interest and other expenses and other non-operating items in the aggregate to be in the $103 to $108 million range. Regarding our tax rate, we’re currently estimating that the rate will be in the range of 23.5% to 24.5%.

We’re projecting adjusted diluted earnings per share to be in the range of $2.62 to $2.72 representing growth of 4% to 8% over 2008, and this includes an anticipated negative impact from foreign currency. Adjusted earnings exclude the charges related to our facilities optimization initiatives as well as the intangibles amortization associated with the Mayne acquisition and any potential impact related to Project Fuel. The adjusted earnings guidance assumes outstanding shares to be roughly equal to the fourth quarter 2008 share count.

Finally turning to cash flow, we estimate cash flow from operations for 2009 to be in the range of $565 to $615 million, capital spending estimated to be in the $155 to $175 million range and depreciation and amortization is expected to be $210 to $220 million.

With that, I’ll turn the call back to Chris for some final comments.

Christopher B. Begley

Guided by our strategic focus on improving margins and cash flow, which in turn fuels our other strategic focus on investing for growth, we are working diligently in 2009 to capitalize on our significant opportunities as well as navigate the uncertain economic environment. We are well positioned to do so. We are well positioned with our customers who value and appreciate the solutions we provide to their pressing problems including those who may be experiencing challenges arising out of the current economic climate.

We are well positioned with our broad and technologically advanced product portfolios and our geographic diversification. We are well positioned in the Americas with our robust GPO relationships on both the pharma and device sides of the business. We are well positioned from a liquidity position to meet our future obligations, and we are well positioned with our streamline organizational structure and re-invigorated focus on optimizing operational effectiveness.

We remain committed to our vision of advancing wellness and to executing on our key strategies to deliver strong profitability and sustainable long-term growth.

And now, we are ready to take questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from Taylor Harris with J.P. Morgan.

Taylor Harris - J.P. Morgan

I just wanted to start with looking at organic growth and how that has trended over the last few years. If I look at 2008 and I strip out Mayne, it was a little under 4%, the previous few years you’d been in the 5% to 6% range, so may be first just tell us big picture, what do you think happened with organic growth in 2008? And then when we look to 2009, given everything that you’re seeing on the macroeconomic front, why are you forecasting a step back up in organic growth to the 4% to 6% range?

Thomas E. Werner

In terms of the growth, your numbers are fairly correct and I think what you have to do is to look at the key franchise of SIP and MMS which are growing exactly where we said if not slightly better, and this year we’ve just had a somewhat of a drag on things from the non-strategic areas in other devices and in other pharma. So, where we’re focusing and where we’re investing our R&D resources, we’re getting the returns we’d like to see, It’s these other areas where we’ve elected to not invest that has been somewhat of a drag on the top-line.

Christopher B. Begley

And that still holds true for 2009 as well as we look at a continued strong growth in both SIP and MMS on a global basis. Clearly, we’re not going to be able to at least in this current economic environment believe that we can grow up to the same levels that we did in ’08 versus ’07 where SIP grew 8.5% globally and MMS grew over 11%, but we do think we have good growth prospects for all the reasons we raised, and again feel pretty confident about that. We do think we did put together fairly prudent forecast for 2009 for our two strategic areas, and again, as Tom alluded to, the non-strategic non-core areas will continue to be more or less flat to low growth areas for us going forward.

Taylor Harris - J.P. Morgan

May be just elaborate on the other pharma and other devices; it seems like the fourth quarter was the worst quarter for those categories than we’d seen earlier in ’08, did something specific happen in either of those categories?

Terrence C. Kearney

I think you have to look at it from a perspective first on a sequential basis if you look across the quarters in ’08 it actually was a very strong quarter, the fourth quarter versus the first three quarters. It’s really when you compare against the fourth quarter of ’07 where we did have some unusual sales levels and if you will with certain customers where a large take of products occurred in the fourth quarter of ’07. So, really I think the better barometer is to look sequentially across the four quarters of ’08 and again the fourth quarter is the strong quarter relative to the first three.

Christopher B. Begley

I also remind you and all the other listeners that the Mayne partnership we have in the other pharma area was our original parent and we had to re-negotiate that contract from an arm’s length standpoint, and that actually starts taking effect in May of this year, and during the time period of the other transitional service agreement, we saw them continue to prune those products and bring them in-house, and so from a year-over-year comp standpoint, things do begin to look better from one of our key customers in that area.

Taylor Harris - J.P. Morgan

And in the rest of the contract manufacturing portfolio there, you think things are stable in ’09?

Thomas E. Werner

That’s where we’re forecasting.

Taylor Harris - J.P. Morgan

My last question is, Tom, if you could walk us through the foreign exchange impact through the P&L, how much are you expecting FX trims from the bottom line in ’09?

Thomas E. Werner

It’s roughly $0.11 to $0.13 on the bottom line, and on the top line, it basically washes out the constant currency sales growth we have. So, as you look at a 5% to 6% top-line being washed out and then the drop through is in that mid-teens kind of operating margin profile; it’s substantial.

Operator

Your next question comes from David Roman with Morgan Stanley.

David Roman - Morgan Stanley

Just firstly on pumps you talked about customers delaying, actually taking the orders after signing the contracts, what type of visibility do you have there going forward?

Terrence C. Kearney

We have actually fairly good visibility on signed contracts because once we sign a contract with our customers, we do spend a good deal of time working with them to determine the implementation date, that’s to ensure that they have the resources in place as well as we have the resources in place. So, I would say that we have fairly good granularity on those signed contracts.

David Roman - Morgan Stanley

And could you give us a sense as to what’s happened on the replacement cycle front over the past several years as new technologies have come to market; may be how often are your customers replacing pumps in a normalized environment, ’07 or ’08 versus 3 to 4 yeas ago?

Terrence C. Kearney

I’m not really sure if it has changed a whole lot. Again, we typically look at a replacement cycle somewhere in excess of 5 years depending on the customer. We have seen more and more customers adopt the Smart pump technologies as we talk about over 60% of our current replacements of MedNet enabled devices have MedNet installed and that’s an increase from 50% the prior year and 40% in ’06. So, I think there is a general trend to continue to upgrade to the newer Smart technology, but again I think relative to replacement cycles, I think it’s fairly constant.

David Roman - Morgan Stanley

And then on the cash flow guidance, it looks as though free cash flow will be essentially flattish year-over-year despite your growing earnings; on the working capital side, are you assuming extended payment times or anything like that?

Thomas E. Werner

No, not on the working capital side. Really what’s going on although our tax rate next continues to be fairly consistent with this year, we’re going to be much more of a cash tax payer in 2009 than we were in 2008. So, it’s just really an anomaly with the cash impact of taxes; the working capital is all in very good share and capital spending which is below operating cash flow is actually going to be fairly flat to slightly down. So, just the tax issue.

David Roman - Morgan Stanley

And then lastly on a more strategic front, it sounds relative to your most recent presentations publicly that you’ve backed off a little of the priorities on investing for growth and shifted the focus more to margin improvement; is that temporary because of the economic environment and should we expect to see investments tick back up in 2010?

Christopher B. Begley

David, that’s a very good question, and from our talk today, obviously in our prepared remarks and earlier comments, we have shifted slightly back to driving more operational efficiency and the reason for that is this analysis that we did in 2008 when we benchmarked ourselves against all the competitors, we really realized we were in the middle and we’ve made tremendous progress, but we’re not happy being in the middle, and we believe in short-term the best way to drive up to that upper core tile is by focusing on operational efficiencies. In addition to that, we do have opportunities for future growth, and so, besides driving improved margins and cash flow, it will also give us an opportunity to fund some of the things that we have not been able to fund. So, really it is a combination and the two work hand-in-hand, but I think it is fair to say we are really focusing the organization due to the opportunities we have and also due to the economy on improving operational efficiency here at Hospira.

David Roman - Morgan Stanley

And what were the top few projects that you haven’t been able to fund that you think you could fund now?

Christopher B. Begley

David, I’m not going to talk about those publicly, and so, as we drive and continue to improve our operational efficiency and those come more to the forefront, we’ll talk about them, but it’s way too premature to talk about them at this point in time, and as we talked about it publicly just so we’re clear here; from a cash flow standpoint, our priority with our cash flow is to pay down the debt that’s coming due June of this year.

Operator

Your next question comes from Danielle Antalffy with Leerink Swann.

Danielle Antalffy - Leerink Swann

I have a two-part question; first, broadly speaking, going forward beyond 2009, how do we think of top-line growth particularly given 2009’s still weakening economy, and more specifically, what’s coming through the pipeline longer term that could drive top-line growth and offset an increasingly competitive generic specialty injectables market and potentially slowing med management growth as the Symbiq launch moves behind us?

Christopher B. Begley

Let me take the first part of your question around top-line growth beyond 2009; we’ll talk about future projections when we have our Analysts’ Day later in this year, and it’s too premature to start talking about top-line growth for 2010 and 2011, etc., on this call. The focus of the call really is ’08 results and ’09 projections. And then as far as driving future top-line growth, I think Terry did an excellent job of articulating the generic drug pipeline in more detail than what we ever have before, and as you can see by and if you missed his comments, you can go back and take a look at the script, but if you look at the way he’s articulated the pipeline, there really is a good growth opportunity for ’09 and ’10 as it relates to our generic drug pipeline.

Terrence C. Kearney

To add to Chris’ comment regarding devices, obviously Symbiq we expect to have good growth prospects in ’09 and into 2010 as we continue to penetrate the market with that technology. On top of Symbiq, we are very excited about the opportunities we see with the newer technologies that we have acquired, the VeriScan and EndoTool as well and continue to believe that we can build out those platforms over time to be more meaningful from a top-line growth perspective.

Thomas E. Werner

Finally, I’d add that the impact we’re seeing from the GPO positions that we gained over the past year to year and a half should provide some momentum, and on the bio-generic side, Retacrit we think is going to get to a breakeven point exiting the year in Europe, and we’ll continue to see good growth on Retacrit. Precedex is also progressing exactly as we had hoped. Once we get these other indications, we hope that the growth will accelerate there. So, a lot of things we’re feeling pretty good about. It’s very difficult though in this environment to predict things very far out, but we’re feeling good about those items.

Danielle Antalffy - Leerink Swann

And then if I could follow up on a previous question regarding bottom line growth and positive operating leverage, how quickly could this project still contribute to margin expansion? Is it contributing already? And is it realistic to expect something on the order of 100 basis points expansion year-over-year or is it more or less than that?

Thomas E. Werner

Right now, it’s a little premature for us to start getting into numbers. We plan to be getting back with you over the next several months including sharing our plans with you in detail in September at the Analyst’s Day. So, right now, it’s just a little premature.

Operator

Your next question comes from Junaid Husain with Soleil Securities.

Junaid Husain - Soleil Securities

Terry, relative to your Premier agreement on pumps, a few questions for you; I do realize the effect of the date of the IV therapy contract is February 1st, but as a sales guidance, what kind of halted the Premier hospitals over the last couple of quarters, were you able to win any business that dropped into the fourth quarter?

Terrence C. Kearney

We have been doing a very good job there and I can’t tell you specifically what we did in Premier, I can tell you that we do have good expectations in 2009 relative from year end unlike what we did with HPG where we initially captured some IV share and followed with pumps. With the Premier contract, with our technology we believe that this is where we need to go, it’s the right approach, and as pump contracts within the Premier accounts expire because they don’t expire on February 1st, we will be lined up to make sure that we have an opportunity at the table to present our technology, and we expect to be very successful when those contracts do expire.

Junaid Husain - Soleil Securities

And then just given the hospital Cap-Ex environment that we’re in and as you look at your MMS business, what’s your sense for the length of time it’s taking for the pump contracts to go from a signed contract to an installed system, obviously you’re saying that the timing is going up, but can you quantify that for us?

Terrence C. Kearney

Again, we have seen delays. Our customers have asked us to push out the implementation of quarter. It doesn’t happen with all customers. Some have certainly been indicating that. So, historically when we talked about implementation cycles, it always had a degree of variability based on the resources available from the hospital. So, I would say if you assume that’s still constant and then you add on the tighter credit markets, I would say that what we’re looking at is in some cases up to a quarters for the delay. Again, I wouldn’t apply that as a broad brush across all accounts.

Junaid Husain - Soleil Securities

And then shifting gears and looking at your SIP business relative to the expanded label for Precedex as well as the Gem articles; did you see any post label or post article bump in sale?

Terrence C. Kearney

Are you talking about the indication or the one yet to be approved?

Junaid Husain - Soleil Securities

No, on the first indication.

Christopher B. Begley

When we did our third quarter call, one of the things that we talked about on Precedex was the going out rate of $70 million and that we thought that Precedex could end up being in excess of $100 million in 12 to 18 months, and we have seen some rub-off effect as a result of the first indication in our customer base which is very excited by the article, and so there is some rub-off effect of that, but we’re still working with the FDA to get the final approval on the second indication.

Junaid Husain - Soleil Securities

Okay. Tom, a last question for you, just some housekeeping; could you tell me what the DSOs were in the quarter and how this compares with the last quarter, and then year over year?

Thomas E. Werner

The DSOs, I think, were down about three days; I believe they were 58 at the end of Q3, and they’re like 55 or 56, and the inventory days were fairly flat, but let me check that, and if I have got that wrong off the top of my head, we’ll correct it before the call is up.

Terrence C. Kearney

On an annual basis, I remember that we did improve DSO by about two days from about 61 globally to about 59 relative to the quarter, I think Tom will have to look that up.

Junaid Husain - Soleil Securities

What are your thoughts on DSOs for ’09 given the climate of hospitals?

Thomas E. Werner

I just referred to the numbers. Terry’s right; it’s 61 to 58, it’s still down three days, but the base is different. So, we’ve really not seen much in the way at all of any prolonged payment patterns from customers. At this point finishing with DSO actually down from the previous quarter and actually somewhat down slightly from last year is very encouraging.

Terrence C. Kearney

I think it’s safe to say that if this economy continues to deteriorate it will have an impact on our customer base whether it is in the US or outside the US. So, we’ll have to diligently monitor that throughout the year, but right now, as Tom indicated, the fourth quarter, things closed pretty well for us, but again, I don’t think we have to put our heads in the sands relative to the continued deterioration out there.

Operator

Your next question comes from David Bachman with Longbow Research

David Bachman - Longbow Research

I just want to step back and ask a broader question. Obviously in your guidance you’re taking into account the global recession that we’re in, but what are your assumptions around that, when we might see access to capital spending picking up, are you looking at late ’09 or 2010. I just want to know what your outlook is.

Terrence C. Kearney

I’ll talk specifically about the capital piece and then maybe we’ll come back and give you a more broader feeling about how we put our forecast together. Relative to capital, again, the reasons we have tempered our growth on a year-over-year basis despite the fact that we have great technology and access to another 50% of the total hospital base with our contracts with both HPG and Premier is because of the comments our customers have made to us relative to delaying implementation and so forth. So, I think we’re just responding to the feedback we hear from our customers, and that’s why when we grew double digits in ’08 and then look at ’09 being somewhat half that, it’s really in response to the tone that we receive from our customers. I think the general feeling is that there is a potential for a rebound in the second half of the year, but again, I think that’s going to take some time to play out with certain customers as I see whether or not there is going to be broader access to capital through the economic stimulus packages and the like, but our thinking right now is that because of the constraining capital markets and a lot of our customers rely on those markets that we think it’s prudent to take our forecast to where it is today, that 5 to 7 range reflecting that. Again, I think, we’ll have more to save off this as the quarters evolve and we’ll all see how it plays out, but right now I think we’re taking a very prudent stance on our forecast.

Relative to SIP, the way we looked at that is that we also think there’s going to be some constriction in demand. The experience we’d mentioned in the fourth quarter relative to lighter wholesaler purchases, I think, it’s really a reflection of them better managing their inventories to really reflect the demand they see in the market place. So, there’s very little inventory build going on, and I think you’ll see more of a, I wouldn’t say necessarily ‘just-in-time,’ but a better proportional management of the demand. I think we built that into as well in our forecast and that would equate to somewhere between 1% to 2% haircut on the US SIP opportunities that we see. Again, whether that plays out over time will really become dependant on how well the economic situation evolves, and if we continue to see people out of work and unable to use or do not have access to insurance and so forth or so on, the hospital utilization could be negatively impacted which would impact our SIP sales as well as we talked about.

David Bachman - Longbow Research

Another question just on pumps. You mentioned alternative financing; is there any color around what the options are out there for customers, what might be able to loosen up and have them being spending sooner rather than later. And then just related, any sense on what the average age of infusion pumps in the market right now is, I know it’s going to be all over the place, but just any color on that?

Thomas E. Werner

In terms of financing options, there are a variety of plans out there. We can do a capital lease with the customer and still get revenue recognition upfront so that it doesn’t really impact debt at all. There are operating leases that we don’t get full revenue recognition upfront, but the customer pays over time. Years and years ago pumps were placed and exchanged for up-charges on the sets; we haven’t really seen much of that at this point. Overseas, that tends to still be the model, but there are a variety of things out there. My preference would be not to use our balance sheet, but to get a bank in there to take the paper out.

Terrence C. Kearney

Relative to average age, I am going to do this on memory based on MDI data that I think we all have access to. I think generally the pump populations are aging in that 5 plus year arena. So, they are getting older, there’s no doubt about that.

David Bachman - Longbow Research

Just one last question; maybe you mentioned it and I missed it, but just on the compounds in the pipeline; could you just revisit what the mix is there; oncology versus other areas?

Terrence C. Kearney

What we did talk about is that 40% of the compounds in the pipeline are all oncology drugs, much specificity we provided.

Operator

Your next question comes from Gregory Gilbert with Bank of America.

Gregory Gilbert - Bank of America

Sort of to beat the dying horse here on the economy, I am interested in your forecasting techniques here. As you looked at ’09 from a bottoms-up standpoint, what are the actual specific levers that you addressed that are related to the economy. Is it a function of having the managers come up with their best assumption and then you haircut it by some generic percentage for the unknowable, or can you give us a little more granularity there. You had mentioned the conservative view on wholesaler inventories. What are some of the other things that you actually do that are levers in your model?

Christopher B. Begley

Maybe the best way to answer your question is to give you the pluses and the minuses that we see as we look at our ’09 forecast the way we put it together. Then I’ll give you the pressure points and I’ll frame it for you and everyone else on the phone, and so let me kind of walk through those pressure points. On the upside as it relates to our projection; first of all is greater than expected reductions to cost and also in that category I’d put in there improved manufacturing efficiencies and productivity. So, clearly review the way we put together the plan, that’s a potential upside. And then the way we put together the plan, we also believe that there is a potential upside depending upon what happens with the stimulus package, as Terry mentioned, on the economy that there could be an upside and greater demand than anticipated, and what goes hand in hand with that is perhaps a better product mix. If that greater demand falls in the area of MMS and SIP versus how we forecasted it, those are two higher margin products, and so that product mix will be extremely favorable, and then there is also product mix within those categories as well. And then the final one would be overall, I’ll call it the stimulus package, but there are some things actually outside the stimulus package that recently occurred here that were favorably. S-CHIP which now gives increased coverage to children, to an additional 4 million children, that definitely will help from a demand standpoint, and then the COBRA extensions that will get passed as soon as President Obama signs the stimulus package today; that helps too because it’s extending insurance coverage and making sure that the demand is there. So, those are the upsides.

The corresponding downsides obviously would be some type of further deterioration in the credit markets that would impact MMS and impact either the delays that we talked about, being perhaps a quarter or two, to something greater than that. And then any other further downturn in the economy that may potentially impact the elective surgeries, that’s another one as we look at our downsides, and the other two obviously would be increased competition versus what we planned on vancomycin or delay in drug approvals. So, as we look at the scale of the pluses and minuses, that’s what we’ve got on each side of it, and I look at that and I say that it’s a pretty well balanced plan that we put together here and appropriate for the economic uncertainty that we’re all faced with today.

Gregory Gilbert - Bank of America

Terry, are you pursuing any additional forms of heparin to help the system deal with factors issues and if so what is the timeline for that?

Terrence C. Kearney

We have done and since last year have really focused extremely hard on making sure that the products that we do make today in the various formats were available to customers as they needed and I think we did a very good job of that and actually had some small benefit with that from last year. That’s where we stand; again, we are focused on continuing to meet the market demands and that’s how it has played out for us.

Gregory Gilbert - Bank of America

Chris, can you comment on volume share as well as relative pricing for EPO in Europe and to what extent do you think this will be good case study for us to look at as we project other erythropoietin launches?

Christopher B. Begley

We’re very pleased with the progress that we’ve made on EPO and as we reflect back on ’08 and our EPO experience in Europe it really was one of, as we talked about it in the opening comments, getting pricing approval and the product launched in a variety of different countries. As we look to 2009, we’re very pleased with the plan that we’ve got put together, and as we look at Europe in total, it is a break-even plan by the end of the year, which we view as very positive as well. So, everything that we’ve seen from our EPO experience encourages us longer-term to move forward with other biologics from a developmental standpoint, and obviously with what’s going on in the US economy and around the world, having biosimilar legislation and being in the biologic generic drug market makes a whole lot of sense because it’s a great way for whether it’s country governments or local governments to keep costs down by moving to generics, and so we’re very pleased with what we’ve done so far, and we think it’s been a very positive learning experience for the organization.

Terrence C. Kearney

To add a little bit more color, the IMS data in Europe is a little patchy at best, and I think the best market probably to look at as a good example is the German market where there are actually five biosimilars launched in Germany. So, it’s a highly competitive market and clearly I think there are three proprietary drugs in the market as well. What we have seen tracking the German market over the last year is that there’s been progressive adoption of the biosimilars. The last data I remember seeing was something to the effect that our biosimilar has now captured about 15% to 17% of the total market. So, that’s pretty good progress over the course of a year. My take away from that is that in fact we’re making good traction with biosimilars. The awareness and the adoption rates are continually increasing. And we do expect that to play out over the other developed markets in Europe in time as well. Again, I think the German markets are a good example, that we continue to see good penetration, and again, we expect that penetration to increase into 2009 and 2010. The other markets are again very underdeveloped at this point in time because of the launch dates and so forth, and again, the IMS data isn’t the best, but what we do is similar to tracking scripts in Germany and I think that data I just shared with you is indicative of the opportunity we have with Retacrit.

Operator

Your final question comes from Taylor Harris with J.P. Morgan.

Taylor Harris - J.P. Morgan

Just a few followups. Sticking on the Retacrit scene; what sort of investment levels are you going to have to pursue over the next few years just to get ready for the US, I guess, specifically, do you have to do anything on the manufacturing front or does the HGSI Agreement cover all of that, and does it just come down to sales forces and R&D?

Christopher B. Begley

At a very high level, Taylor, the Human Genome Sciences deal takes care of us in the short term as it relates to mammalian cell manufacturing capabilities. It’s why we did the deal. As it relates to E. coli, we’ve got capabilities through our BresaGen Australian acquisition, and so really what we’re looking at is expenses related to running the clinical studies, getting ready to market, and then sales-force build. So, not too dissimilar to what we saw in Europe, but with the addition of running the clinical studies which obviously our partner had that expense going forward, but we end up with a much better margin in the US than we ever will have in Europe because of the way the deal is structured. The other thing I’d add to that is between your question and Greg’s there was a caller earlier who asked about which other the areas we’d like to invest through Project Fuel. One of them clearly is here in the biogeneric area where we’d like to have more underdevelopment because we do believe that is a good opportunity long-term for our shareholders and our customers and employees. So, it’s one of the hopeful outcomes we get out of Project Fuel here as well.

Taylor Harris - J.P. Morgan

One more question on the pump business; when you look at your guidance versus what Cardinal Health has disclosed, and Chris, some other comments that you made, for example, at our conference about overall IT spending, do you think it’s just a market share issue that’s allowing you to grow in this market in ’09?

Terrence C. Kearney

Let me field that question and let me give you a few building blocks at how we came up with our forecast and really what the revenue drivers are for 2009. Typically we look at our MMS business, there are really three components that drive revenue: capital, disposables, and software services, and from a capital perspective, we are forecasting lower revenue placements year over year, but we are expecting to offset that with a richer mix of pumps, more Symbiq versus Plum. We also, because of the growth in our installed base in 2008 where we grew 7%, that has a spillover effect in 2009 from a disposable volume perspective. So, we expect those will be positive. And then again, software services, we see momentum building there like disposables. So, really the growth drivers are a better mix of pumps although the pump licenses are slightly down, and then disposable volume and software services. That’s what builds up the guidance we gave you of 5% to 7%.

Taylor Harris - J.P. Morgan

I think specifically Cardinal had said that they were seeing just a current run rate of new orders down 20% to 25%. So, however you track that, are you guys simply just not seeing that right now?

Terrence C. Kearney

Certainly not to that degree; we left the year with a decent backlog and we continue to sign contracts into this current year.

Taylor Harris - J.P. Morgan

Okay. And then the last question, Tom, I just wanted to come back to SG&A in the quarter since it was so well controlled; can you just run through again how you were able to achieve that down 14% result.

Thomas E. Werner

Yes, part of that will likely reverse over the next couple of quarters, it relates to just fringe benefits costs and incentives, and the rest of it’s not really headcount control and controlling discretionary spending, travel, and elective spending. So, a good portion of it will hold, and some of it’s going to reverse over the next couple of quarters.

Taylor Harris - J.P. Morgan

Is foreign exchange part of it as well, I assume?

Thomas E. Werner

Year over year, yes there is an impact of foreign exchange. I could probably get that to you offline as to what the impact was.

Karen King

That concludes our call for the quarter. Thank you for joining us today. Rachel, we’re now ready to end the call.

Operator

This concludes Hospira’s fourth quarter 2008 earnings conference call. You may now disconnect.

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Source: Hospira, Inc. Q4 2008 Earnings Call Transcript
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