TO OUR STAKEHOLDERS: COMMITMENT 2008 COMPANY FACTS AND FIGURES. Hospira has manufacturing facilities across the globe: Austin, Texas; Boulder, Colo.; Buffalo, N.Y.; Clayton, N.C.; Finisklin, Sligo, Ireland; La Aurora, Costa Rica; Liscate, Italy; McPherson, Kan.; Morgan Hill, Calif.; Mulgrave, Victoria, Australia; North Chicago, Ill.; Rocky Mount, N.C.; Salisbury, South Australia, Australia; San Cristobal, Dominican Republic; and Wasserburg, Germany. The company is headquartered in Lake Forest, Ill. home to the regional leadership team for the Americas. Leadership for the Europe, Middle East and Africa (EMEA) region is based in Leamington Spa, United Kingdom. The Asia-Pacific (APAC) regional management team is in Melbourne, Australia. HOSPIRA ACROSS THE GLOBE HOSPIRA 2008 SALES $3.63 BILLION* SUPPLEMENT TO THE HOSPIRA GLOBAL CITIZENSHIP REPORT - POSTED OCTOBER 2009
TABLE OF CONTENTS HOSPIRA FACTS AND FIGURES...1 COMMITMENT TO ENVIRONMENTAL RESPONSIBILITY...3 COMMITMENT TO COMMUNITIES...9 SUPPLEMENTING THE HOSPIRA GLOBAL CITIZENSHIP REPORT, THIS DOCUMENT PROVIDES AN UPDATE ON KEY SUSTAINABILITY AND ENVIRONMENTAL DATA FOR THE YEAR 2008. FOR DETAILS REGARDING 2008 HOSPIRA FINANCIAL PERFORMANCE, PLEASE REFER TO THE CURRENT HOSPIRA ANNUAL REPORT. POSTED OCTOBER 2009
COMPANY FACTS AND FIGURES Hospira currently has manufacturing facilities across the globe: Austin, Texas; Boulder, Colo.; Buffalo, N.Y.; Clayton, N.C.; Finisklin, Sligo, Ireland; La Aurora, Costa Rica; Liscate, Italy; McPherson, Kan.; Morgan Hill, Calif.; Mulgrave, Victoria, Australia; Rocky Mount, N.C.; Salisbury, South Australia, Australia; San Cristobal, Dominican Republic; and Wasserburg, Germany. The company is headquartered in Lake Forest, Ill. home to the regional leadership team for the Americas. Leadership for the Europe, Middle East and Africa (EMEA) region is based in Leamington Spa, United Kingdom. The Asia-Pacific (APAC) regional management team is in Melbourne, Australia. HOSPIRA REGIONS ACROSS THE GLOBE THE AMERICAS EUROPE/MIDDLE EAST/AFRICA ASIA PACIFIC HOSPIRA 2008 SALES $3.6 BILLION Sales By Region Sales By Product Focus EMEA 16% THE AMERICAS 77% APAC 7% DEVICES 31% PHARMACEUTICALS 69% SUPPLEMENT TO HOSPIRA GLOBAL CITIZENSHIP REPORT 2
COMMITMENT TO ENVIRONMENTAL RESPONSIBILITY
2008 Environmental, Health and Safety (EHS) Data ENVIRONMENTAL AND SAFETY DATA OVERVIEW This report provides EHS information for calendar year 2008, the most current data available at the time of posting. Data in this section has been gathered from our various operations and is accurate to the best of our knowledge. Where referenced, operations refers to Hospira manufacturing locations worldwide. Hospira acquired Mayne Pharma Limited in 2007, which resulted in the expansion of the company s manufacturing footprint. Data from former Mayne sites is included in this section. Hospira also closed two manufacturing facilities in 2008, which had a limited impact on the environmental and safety data. SUPPLEMENT TO HOSPIRA GLOBAL CITIZENSHIP REPORT 4
Accidents/Million Miles Per 200,000 Hours Worked Per 200,000 Hours Worked SAFETY TARGETS* OSHA Injury/Illness Rate U.S./Costa Rica/Dominican Republic 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 05 06 07 08 09 10 Lost-Day/Restricted-Day/Transferred-Day Rate U.S./Costa Rica/Dominican Republic/ Ireland/Italy 1 0.8 0.6 0.4 0.2 0 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 Targets Targets 05 06 07 08 09 10 U.S. Sales Fleet Accident Rates Targets Actual Actual 05 06 07 08 09 10 Actual SAFETY METRICS** 2005 The Hospira Through metrics 2010 and Safety targets Targets proposed in 2005, the year we established the Hospira EHS baseline for safety data, have not - changed. Safety data for the acquired operations was not of sufficient detail to integrate with the legacy Hospira data. However, - safety metrics for acquired operations for the full year 2008 are separately presented in this report, referred to as APAC and EMEA locations. - 2005 Through 2010 Safety Targets - 10 percent reduction in the U.S. work-related injury/illness rate Our 2008 OSHA-recordable injury/illness rate was 1.09 incidents per 200,000 hours worked. We are targeting to reduce our injury/ - illness rate by an average of 2 percent per year from the 2005 rate of 1.67. The 2008 APAC/EMEA injury/illness rate was 1.28. - 10 percent reduction in lost-day/restricted-day/transferred-day (DART) cases - In 2008, Hospira employees collectively were away from work at a rate of 0.57 cases per 200,000 hours worked. Our goal is to reduce these cases by an average of 2 percent per year from the 2005 rate - of 1.10. The 2008 APAC/EMEA DART rate was 1.07. - 10 percent reduction in vehicle accidents per million miles driven - in the United States In 2008, the U.S. sales force posted an accident rate of 7 accidents per million miles driven. Our target is to reduce the number of vehicle accidents by an average of 2 percent per year from the 2005 rate of 6.6. Despite an increase in the 2008 accident rate, Hospira is still on track to achieve our target reduction goal by 2010. - 80 percent of Hospira facilities achieving OSHA VPP Star status or equivalent The Occupational Safety and Health Administration (OSHA) Voluntary Protection Program (VPP) focuses on five key areas: management commitment, employee involvement, worksite analysis, hazard prevention and control, and training. In 2008, two Hospira sites were VPP certified. Hospira expects to achieve our stated VPP status goal by 2010. *Excludes Mayne Pharma operations ** Due to site-level initiatives, Hospira has met some safety and environmental targets sooner than expected. The company will be setting new and more aggressive targets with the next generation of sustainability activities and performance assessment.
SAFETY ENVIRONMENTAL METRICS METRICS** 2005 The environmental Through 2010 metrics Safety and Targets targets Hospira proposed in 2005 for manufacturing locations have been restated to include all manufacturing operations Hospira has acquired and divested since that time. - The results of this restatement are reflected in the environmental - data graphs and Table 1. Environmental data for the year 2006 is not included because it does not reflect the company s expanded manufacturing footprint. The 2007 and 2008 environmental metrics - include former Mayne Pharma operations. On an annual basis, Hospira collects data from manufacturing - locations for a number of environmental parameters. The metrics are collected from manufacturing operations worldwide. - The environmental metrics are then normalized to the annual Hospira sales figures and compared to the environmental targets. Normalizing environmental metrics by annual sales is a common method - to ensure that the data accounts for changes in a company s business over time. Energy - reported in Table 1 is the total energy used, both direct and indirect. - TABLE 1: ENVIRONMENTAL METRICS DATA FOR HOSPIRA MANUFACTURING OPERATIONS - 2005 Baseline 2008 Percent Change Water Use (gallons) 1,178,228,332 998,000,000 (15) Process Air Emissions (lbs.) 996,313 548,245 (45) Hazardous Waste * (lbs.) 4,428,963 3,299,000 (25) Non-Hazardous Waste * (lbs.) 19,842,700 16,360,000 (17) Total Energy Use (MBTU) 2,953,293,000 2,840,000,000 (4) Indirect Energy Use 1 1,940,313,000 1,965,000,000 Direct Energy Use 2 1,012,980,000 881,248,000 * Disposed of (excludes recycling) 1 Indirect energy is energy we purchase from other sources (i.e., electricity and steam). 2 Direct energy is the on-site production of energy in the form of fuel combustion. 2005 Through 2010 Environmental Targets - 5 percent reduction in packaging materials Reducing the packaging materials of Hospira s products presents a unique challenge due to the important role of packaging in the distribution and protection of medical products. Once a product is used, the packaging becomes waste. The Hospira packaging reduction team leads the company s efforts in this area. In 2008, more than 1.5 million pounds of packaging weight reductions were achieved through product-packaging redesign efforts. Hospira is on track to achieve the 2010 reduction target. ** Due to site-level initiatives, Hospira has met some safety and environmental targets sooner than expected. The company will be setting new and more aggressive targets with the next generation of sustainability activities and performance assessment. Gallons/$1,000 Sales Pounds/$1,000 Sales Pounds/$1,000 Sales Pounds/$1,000 Sales BTU/$1,000 Sales ENVIRONMENTAL TARGETS Water Use 345 335 325 315 305 295 285 275 265 255 245 Process Air Emissions.30.25.20.15.10.05.00 1.2 1.0.80.60.40.20.00 Actual Actual 05 07 08 09 10 Hazardous Waste Actual Energy 05 07 08 09 10 Targets Targets 05 07 08 09 10 Targets Non-Hazardous Waste 5.8 5.4 5.0 4.6 4.2 3.8 05 07 08 09 10 Actual Targets 860 840 820 800 780 760 740 720 05 07 08 09 10 Actual Targets SUPPLEMENT TO HOSPIRA GLOBAL CITIZENSHIP REPORT 6
The following targets are normalized to sales - 5 percent reduction in water usage Hospira plants that manufacture injectable pharmaceuticals and solutions use millions of gallons of water each year for inclusion in products and sterilization processes. Our goal is to conserve this valuable resource through increased efficiencies across our manufacturing processes. Total water used represents the amount of water supplied to facilities by the local municipality, international counterpart, or an on-site source such as a local well or surfacewater source. - 10 percent reduction in process air emissions Process air emissions are primarily discharges of volatile organic compounds or other regulated air contaminants that are produced or used in the manufacture of products. These do not include fuel combustion emissions, such as those from boilers and electrical generators. - 10 percent reduction in hazardous waste To be consistent with the Global Reporting Initiative (GRI ), hazardous waste is defined by national legislation at the point of generation. Hospira continues to track separately special handling wastes, defined as wastes whose disposal is regulated by other programs (such as infectious waste, waste oil, electronics disposal, etc.). - 10 percent reduction in non-hazardous waste Non-hazardous waste is solid waste such as cafeteria waste, general rubbish and paper that cannot be recycled. Solid waste does not require any special disposal authorization and is normally sent to the landfill. - 5 percent energy reduction Hospira is taking steps to help ensure that our operations become even more efficient, which will result in reductions in our energy use. We expect to see reductions in our energy profile as we work toward our 2010 goals. NOTICES OF VIOLATION A Notice of Violation (NOV) may be issued by an environmental governing body after a self-reported breach of permit conditions or following an environmental audit of a facility program. Hospira had two NOVs in 2008. One NOV was issued to a Hospira manufacturing location for a wastewater ph exceeding the permit limit. The cause was related to maintenance activities and was corrected. Another NOV was received at a manufacturing location for not maintaining landscaping in the vicinity of a storm water conveyance pipe. The condition was immediately corrected.
RECYCLING Hospira facilities recycled more than 15 million pounds of materials in 2008. Each facility establishes its own recycling program based on local capabilities. Materials that are recycled include: aluminum metal, ferrous metals, rubber, plastics, glass, toner cartridges, batteries, circuit boards, plastic foam, wood pallets, cardboard and paper. Computers are returned to the manufacturer for recycling when they become obsolete. HYBRID VEHICLES FOR U.S. SALES FORCE In 2007, Hospira expanded its hybrid vehicle pilot program to replace all automobiles and sport utility vehicles in the U.S. sales fleet with hybrids. Through the end of 2008, there were 478 hybrids out of 626 total vehicles in the sales operations fleet. TABLE 2: CARBON DISCLOSURE PROJECT (CDP)- REPORTED GREENHOUSE GASES (GHG) DATA FOR HOSPIRA The differences in year-to-year GhG emissions values are primarily due to the acquisition and divestitures of manufacturing plants. Hospira began collecting GhG emission data for activities other than manufacturing in 2006. For 2008, the reporting scope was expanded to include the Hospira corporate headquarters and U.S.- owned product distribution centers. CDP REPORTED GHG DATA HOSPIRA WORLDWIDE 2005 2006 2007 2008 Direct (Metric Tons of CO 2 ) 48,700 49,505 46,904 50,160 Indirect (Metric Tons of CO 2 ) NA 234,589 243,293 242,863 Electrical Use (MWh) NA 376,173 390,689 390,000 Direct GhG/CO 2 emissions are for fuel combustion carbon content only (not the other 5 main GhG), and are based on factors of 161.4 lbs. CO 2 /million BTU for fuel oil and 117 lbs. CO 2 /million BTU for natural gas. Indirect GhG/CO 2 emissions for electrical use are calculated using a conversion factor of 1.37 lbs./kw, the typical value given by the U.S. Environmental Protection Agency. SUPPLEMENT TO HOSPIRA GLOBAL CITIZENSHIP REPORT 8
COMMITMENT TO COMMUNITIES
In 2008, Hospira continued to fulfill its commitments to the global community through the Hospira Foundation, the company s philanthropic arm, as well as product donations for disaster relief and medical care around the world. By partnering with first-to-respond disaster aid organizations such as AmeriCares, Heart to Heart International, Direct Relief International, Project Hope, the International Federation of Red Cross, the Red Crescent Society, the American Red Cross and the United States Fund for the United Nations Children s Fund (UNICEF), Hospira took part in some of 2008 s largest relief efforts. Supported efforts included: RELIEF FOR MYANMAR Cyclone Nargis caused the worst natural disaster in the history of Myanmar on May 2, 2008, causing catastrophic destruction and at least 146,000 fatalities. Hospira helped relief efforts with product donations and financial support. CHINA EARTHQUAKE AID On May 12, 2008, a devastating earthquake left nearly 90,000 dead or missing in Sichuan, a Chinese province. The Hospira Foundation supported disaster relief missions and the company donated needed medical products. HELP IN HAITI More than 800,000 people were affected after a series of storms two tropical storms and two hurricanes hit Haiti in September 2008. Hospira donated products to help meet aid needs in affected areas. MIDWEST U.S. FLOOD RELIEF During the summer of 2008, disastrous flooding occurred in the Midwest United States across Iowa, Illinois and Missouri. As residents were displaced and evacuated throughout these three states, the Hospira Foundation supported on-the-ground relief efforts. SUPPORTING THE PUBLIC HEALTH INSTITUTE S LEADERSHIP FOR SUSTAINABILITY PROGRAM AmeriCares volunteers unload Hospira products in China. In 2008, the Hospira Foundation demonstrated its support for the Public Health Institute s (PHI) Leadership for Sustainability program through a grant. This learning program was designed to address existing gaps in knowledge and preparedness, to foster innovative leadership and new alliances across sectors, and to spark swift change within the public health system and beyond for the sustainability of our global community. SUPPLEMENT TO HOSPIRA GLOBAL CITIZENSHIP REPORT 10
Hospira, Inc. 275 North Field Drive Lake Forest, Illinois 60045 224.212.2000 www.hospira.com POSTED OCTOBER 2009