Item 2.05 Costs Associated with Exit or Disposal Activities

On March 23, 2009, the Board of Directors of Hospira, Inc. (the "Company") approved, and the Company committed to, a restructuring and optimization plan, which represents the next steps related to Project Fuel, a multi-phased initiative to improve the Company's margins and fuel its growth. As a result, the Company will incur certain costs associated with these activities.

Project Fuel will involve all areas of the Company, and will include the following activities: optimizing the Company's product portfolio to reduce complexity and increase the Company's customer service orientation, evaluating non-strategic assets to better focus the Company on key growth drivers, and streamlining the organizational structure to expedite decision-making and enhance employee productivity. Hospira has identified significant opportunities to improve efficiencies and performance in several functional areas, including global procurement, finance and information technology. The restructuring and optimization plan will result in the Company reducing its global workforce by approximately 10%, which represents between 1,400 and 1,500 employees. These reductions will impact all areas of the Company and will occur over the next 24 months, with most of the reductions occurring over the next 12 months.

In connection with these actions, the Company estimates that it will incur total pre-tax charges in the range of approximately $140 million to $160 million. The Company expects to incur approximately $90 to $100 million of those total charges in 2009, approximately $40 to $50 million in 2010, and the remaining $10 million in 2011.

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The total charges include cash costs of approximately $120 million. Estimates for each major type of cash costs are approximately: (i) $70 million for employee-related costs, including costs for severance and other assistance;
(ii) $45 million for process optimization implementation costs; and (iii) $5 million for other cash costs associated with the project. Of the total pre-tax charges, $30 million relates to non-cash charges for various potential asset write-downs. Hospira expects these actions will deliver annual pre-tax savings of approximately $8 million to $10 million in 2009, approximately $70 million to $80 million in 2010, and approximately $110 million to $140 million on an annualized run-rate basis, which it expects to reach by the second quarter of 2011.

The press release announcing this plan is attached as Exhibit 99.1

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No. Description

99.1 Press Release issued by Hospira, Inc. on March 24, 2009.