Quintiles Transnational (QTRN) 8-K Results of Operations and Financial Condition

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 8, 2006

QUINTILES TRANSNATIONAL CORP.

(Exact name of registrant as specified in its charter)

North Carolina	333-113805	56-1714315
(State or other jurisdiction of	(Commission File	(I.R.S. Employer
incorporation)	Number)	Identification Number)

4709 Creekstone Drive, Suite 200, Durham, North Carolina 27703-8411
(Address of principal executive offices)

(919) 998-2000
Registrant’s telephone number, including area code

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

     On March 3, 2006, Quintiles Transnational Corp. (the “Company”) and Pharma Services Intermediate Holding Corp. (“Holding”) commenced a cash tender offer to purchase any and all of the Company’s outstanding $450 million aggregate principal amount 10% senior subordinated notes due 2013 and any and all of Holding’s outstanding $219 aggregate principal amount at maturity 11.5% senior discount notes due 2014. In connection with the cash tender offer, the Company and Holding each are soliciting consents to amend the indentures under which the respective notes were issued to eliminate or make less restrictive most of the restrictive covenants contained in the indentures and amend certain related provisions. The tender offer is subject to certain conditions, including, without limitation, the Company having borrowed funds sufficient to purchase the notes tendered and pay the related consent payments and fees and expenses in connection with the tender offer. The Company is pursuing plans to borrow up to $1.47 billion under new credit facility arrangements, which would include a $250 million first lien revolving credit facility due 2012, a $900 million first lien term loan B due 2013 and a $320 million second lien term loan C due 2014. Proceeds from these borrowings would be used, together with available cash, to fund these payments and satisfy this condition to the tender offer, as well as to eliminate the outstanding preferred stock of Pharma Services Holding, Inc., the parent of the Company and Holding. The tender offer and the refinancing are subject to certain conditions, rights of the withdrawal and other terms which could result in the Company not completing the refinancing or tender offer.

     The Company issued a press release on March 3, 2006 announcing the commencement of the tender offer and consent solicitation and on March 6, 2006 announcing the commencement of the refinancing. Copies of these press releases are attached to this report as Exhibits 99.01 and 99.02, respectively, and incorporated by reference herein.

     In connection with the refinancing transaction, the Company is making certain information available to potential lenders, primarily with respect to the combined results of its Product Development and Commercialization reporting segments, which together are referred to as Services, including the following financial information furnished in this report:

• Services, carve-out statements of operations, balance sheets and statements of cash flows for the years ended December 31, 2003 and 2004 and the twelve months ended September 30, 2005, or Services Carve-Out Financial Statements.

• Services net revenue and operational earnings before interest expense (income), income taxes and depreciation and amortization (“Operational EBITDA”) for the years ended December 31, 2003 and 2004 and the twelve months ended September 30, 2005 and 2004, or Services Net Revenue and Operational EBITDA.

• Quarterly Services net revenue, operational EBITDA, Contribution, Selling, General and Administrative (“SG&A”) Expenses and Days Sales Outstanding (“DSO”) by quarter for 2003, 2004 and 2005.

• Services net revenue by geography and line of business for the years ended December 31, 2003 and 2004 and the nine months ended September 30, 2005, or Services Net Revenue by Geography and Line of Business.

2

• Half year consolidated backlog and net new business wins as of December 31, 2002, 2003, 2004 and 2005, including Commercial Services backlog specifically associated with the Company’s Cymbalta^® contract, or Backlog and Net New Business Wins.

     Information in this report contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, the possibility that the Company may not be able to secure financing under one or more credit facilities on terms acceptable to the Company prior to the expiration of the tender offer or otherwise obtain funds sufficient to purchase the notes tendered and pay the related consent payments and fees and expenses in connection therewith. Additional factors that could cause actual results to differ materially are discussed in the Company’s recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K, its Form 8-Ks and its other periodic reports, including Form 10-Qs. Any forward-looking statements are as of the date hereof, and the Company has no duty to update them if its views later change.

     Services Carve-Out Financial Statements

     The carve-out financial statements presented below show the results of the Company’s Product Development and Commercialization segments, on a combined basis, separately from the Company’s consolidated results. In the carve-out financial statement presentations below, CR&R stands for Commercial Rights & Royalties, which represents the Company’s PharmBio Development reporting unit. The combination of the Product Development and Commercialization segments as “Services” is not in accordance with generally accepted accounting principles in the United States (“GAAP”). However, such information is considered important information by potential lenders and therefore has been provided in this format.

     The Company has restated the financial statements presented in this report to reflect the results of certain disposed businesses as discontinued operations. These changes are summarized below.

     In December 2005, the Company completed the sale of its Pharmaplan Business, or Pharmaplan, to Opus Ventures, for approximately $1.3 million in cash. The results of operations, assets and liabilities of Pharmaplan have been reported separately as a discontinued operation. All periods presented herein have been restated to reflect Pharmaplan as a discontinued operation.

     In September 2005, the Company completed the sale of its Early Development and Packaging Business, or EDP Business, to Aptuit Inc., or Aptuit, for approximately $124 million in cash. The results of operations, assets and liabilities of the EDP Business have been reported separately as a discontinued operation. All periods presented herein have been restated to reflect the EDP Business as a discontinued operation.

     In August 2004, the Company completed the sale of certain assets representing its Bioglan Pharmaceuticals business, or Bioglan, to Bradley Pharmaceuticals, Inc., or Bradley, for approximately $188.3 million including approximately $5.3 million of direct costs for transferred inventory. The results of operations, assets and liabilities of the Bioglan business have been reported separately as a discontinued operation. All periods presented herein have been restated to reflect the Bioglan business as a discontinued operation.

3

TWELVE MONTHS ENDED SEPTEMBER 30, 2005

CARVE-OUT STATEMENT OF OPERATIONS — UNAUDITED
(in thousands)

				Subtract			Adjust
	Consolidated			CR&R			Intercompany			Services
Net revenues	$	1,850,179		$	102,053		$	(100,068	)	$	1,848,194
Add: reimbursed service costs		477,075			—			(7,056	)		484,131
Gross revenues		2,327,254			102,053			(107,124	)		2,332,325
Costs, expenses and other:
Costs of revenues		1,669,736			180,987			(107,124	)		1,595,873
Selling, general and administrative		580,239			—			—			580,239
Interest income		(12,848	)		(4,436	)		—			(8,412	)
Interest expense		69,138			516			—			68,622
Other (income), net		(2,169	)		(356	)		—			(1,813	)
Restructuring		28,247			—			—			28,247
Impairments		7,678			—			—			7,678
Transaction expenses, net		(2,666	)		—			—			(2,666	)
		2,337,355			176,711			(107,124	)		2,267,768
(Loss) income before income taxes		(10,101	)		(74,658	)		—			64,557
Income tax (benefit)		(43,469	)		(26,131	)		—			(17,338	)
Income (loss) before equity in (losses) earnings of unconsolidated affiliates and minority interests		33,368			(48,527	)		—			81,895
Equity in (losses) earnings of unconsolidated affiliates		(1,137	)		—			—			(1,137	)
Minority interests		(3,153	)		—			—			(3,153	)
Income (loss) from continuing operations		29,078			(48,527	)		—			77,605
(Loss) income from discontinued operations, net of income taxes		(30,541	)		801			—			(31,342	)
(Loss) gain from sale of discontinued operations, net of income taxes		(3,989	)		620			—			(4,609	)
Net (loss) income	$	(5,452	)	$	(47,106	)	$	—		$	41,654

4

SEPTEMBER 30, 2005
CARVE-OUT BALANCE SHEET — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Assets
Current assets:
Cash and cash equivalents	$	479,203		$	—		$	479,203
Trade accounts receivable and unbilled services, net		336,538			8,404			328,134
Investments in debt securities		588			—			588
Prepaid expenses		20,027			3			20,024
Other current assets and receivables		62,291			1,542			60,749
Assets of discontinued operations		4,853			4,853			—
Total current assets		903,500			14,802			888,698
Property and equipment:
Land, buildings and leasehold improvements		50,057			—			50,057
Equipment		65,058			63			64,995
Furniture and fixtures		21,153			—			21,153
Motor vehicles		39,188			—			39,188
		175,456			63			175,393
Less accumulated depreciation		(69,899	)		(5	)		(69,894	)
		105,557			58			105,499
Intangibles and other assets:
Investments in debt securities		12,869			—			12,869
Investments in marketable equity securities		33,450			33,450			—
Investments in non-marketable equity securities and loans		52,985			52,185			800
Investments in unconsolidated affiliates		125,692			—			125,692
Commercial rights and royalties		122,961			122,961			—
Accounts receivable — unbilled		38,734			38,734			—
Goodwill		87,230			508			86,722
Other identifiable intangibles, net		227,204			3,492			223,712
Deferred income taxes		69,399			—			69,399
Deposits and other assets		37,898			2,909			34,989
		808,422			254,239			554,183
Total assets	$	1,817,479		$	269,099		$	1,548,380

5

SEPTEMBER 30, 2005
CARVE-OUT BALANCE SHEET — UNAUDITED (Continued)
(in thousands)

			Subtract
	Consolidated		CR&R		Services
Liabilities, Shareholders’ Equity and Intercompany
Current liabilities:
Accounts payable	$	50,952	$	4,083	$	46,869
Accrued expenses		268,784		1,401		267,383
Unearned income		206,742		545		206,197
Income taxes payable		9,370		—		9,370
Current portion of obligations held under capital leases		13,736		—		13,736
Current portion of long-term debt		5,022		—		5,022
Other current liabilities		10,240		—		10,240
Liabilities of discontinued operations		2,947		2,947		—
Total current liabilities		567,793		8,976		558,817
Long-term liabilities:
Obligations held under capital leases, less current portion		13,121		—		13,121
Long-term debt, less current portion		604,280		—		604,280
Minority interest		36,031		—		36,031
Unearned income		37,202		37,202		—
Other liabilities		15,825		1,002		14,823
		706,459		38,204		668,255
Total liabilities		1,274,252		47,180		1,227,072
Shareholders’ equity and intercompany:
Total shareholders’ equity and intercompany		543,227		221,919		321,308
Total liabilities, shareholders’ equity and intercompany	$	1,817,479	$	269,099	$	1,548,380

6

TWELVE MONTHS ENDED SEPTEMBER 30, 2005
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Operating activities:
Net (loss) income	$	(5,452	)	$	(47,106	)	$	41,654
Loss (income) from discontinued operations, net of income taxes		30,541			(801	)		31,342
Loss (gain) from sale of discontinued operations, net of income taxes		3,989			(620	)		4,609
Income (loss) from continuing operations		29,078			(48,527	)		77,605
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:
Depreciation and amortization		105,703			5,077			100,626
Amortization expense of debt issuance costs		6,801			—			6,801
Amortization of commercial rights and royalties assets		18,908			18,908			—
Restructuring (payments) accrual and write-off of other assets, net		6,002			—			6,002
Impairment of long-lived assets		6,633			—			6,633
Loss on sale of property and equipment, net		811			63			748
Loss on investments, net		4,604			4,604			—
Provision for deferred income taxes		(46,619	)		—			(46,619	)
Change in operating assets and liabilities:
Accounts receivable and unbilled services		(96,486	)		(1,561	)		(94,925	)
Prepaid expenses and other assets		35,841			40,010			(4,169	)
Accounts payable and accrued expenses		26,697			(3,966	)		30,663
Unearned income		36,603			4,782			31,821
Income taxes payable and other liabilities		(39,990	)		1,011			(41,001	)
Other		3,428			81			3,347
Net cash provided by continuing operations		98,014			20,482			77,532
Net cash provided by discontinued operations		17,178			57			17,121
Net cash provided by operating activities		115,192			20,539			94,653

7

TWELVE MONTHS ENDED SEPTEMBER 30, 2005
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED (Continued)
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Investing activities:
Acquisition of property, equipment and software		(37,302	)		(63	)		(37,239	)
Payment of transaction costs in Transaction		(5,830	)		—			(5,830	)
Acquisition of businesses, net of cash acquired		(14,011	)		(7,635	)		(6,376	)
Acquisition of commercial rights and royalties		(60,944	)		(60,944	)		—
Proceeds from disposal of discontinued operations		124,000			—			124,000
Expenses of disposal of discontinued operations		(11,405	)		—			(11,405	)
Proceeds from disposition of property and equipment		6,601			—			6,601
Maturities of held-to-maturity investments		710			—			710
Purchase of available-for-sale investments		(1,491	)		—			(1,491	)
Proceeds from sale of available-for-sale investments		66			—			66
Purchase of equity securities		(15,534	)		(15,534	)		—
Proceeds from sale of equity securities		18,801			18,801			—
Proceeds from other investments		718			718			—
Purchases of other investments		(3,163	)		(3,163	)		—
Other		59			(487	)		546
Net cash provided by (used in) continuing operations		1,275			(68,307	)		69,582
Net cash (used in) provided by discontinued operations		(13,209	)		(54	)		(13,155	)
Net cash (used in) provided by investing activities		(11,934	)		(68,361	)		56,427
Financing activities:
Repayment of debt		(158,284	)		—			(158,284	)
Principal payments on capital lease obligations		(14,202	)		—			(14,202	)
Intercompany with parent companies		(860	)		—			(860	)
Intercompany		—			47,485			(47,485	)
Net cash (used in) provided by continuing operations		(173,346	)		47,485			(220,831	)
Net cash (used in) discontinued operations		(18	)		0			(18	)
Net cash (used in) provided by financing activities		(173,364	)		47,485			(220,849	)
Effect of foreign currency exchange rate changes on cash		921			(2	)		923
(Decrease) in cash and cash equivalents		(69,185	)		(339	)		(68,846	)
Consolidated cash and cash equivalents at beginning of period		548,684			635			548,049
Consolidated cash and cash equivalents at end of period	$	479,499		$	296		$	479,203
Cash and cash equivalents of discontinued operations	$	296		$	296		$	—
Cash and cash equivalents of continuing operations	$	479,203		$	—		$	479,203

8

DECEMBER 31, 2004

CARVE-OUT STATEMENT OF OPERATIONS — UNAUDITED
(in thousands)

				Subtract			Adjust
	Consolidated			CR&R			Intercompany			Services
Net revenues	$	1,604,977		$	41,805		$	(65,688	)	$	1,628,860
Add: reimbursed service costs		351,277			—			(6,289	)		357,566
Gross revenues		1,956,254			41,805			(71,977	)		1,986,426
Costs, expenses and other:
Costs of revenues		1,411,874			128,566			(71,977	)		1,355,285
Selling, general and administrative		582,244			—			—			582,244
Interest income		(11,280	)		(4,102	)		—			(7,178	)
Interest expense		69,896			765			—			69,131
Other (income), net		(5,626	)		44			—			(5,670	)
Restructuring		5,682			—			—			5,682
Impairments		1,045			—			—			1,045
Gain on sale of portion of an investment in a subsidiary		(24,688	)		—			—			(24,688	)
Non-operating gain on change of interest transaction		(10,030	)		—			—			(10,030	)
		2,019,117			125,273			(71,977	)		1,965,821
Income (loss) before income taxes		(62,863	)		(83,468	)		—			20,605
Income tax (benefit)		(2,966	)		(29,214	)		—			26,248
Income (loss) before equity in (losses) earnings of unconsolidated affiliates and minority interests		(59,897	)		(54,254	)		—			(5,643	)
Equity in (losses) earnings of unconsolidated affiliates		(149	)		—			—			(149	)
Minority interests		(1,095	)		—			—			(1,095	)
Income (loss) from continuing operations		(61,141	)		(54,254	)		—			(6,887	)
(Loss) income from discontinued operations, net of income taxes		7,762			10,385			—			(2,623	)
(Loss) gain from sale of discontinued operations, net of income taxes		54,422			54,422			—			—
Net (loss) income	$	1,043		$	10,553		$	—		$	(9,510	)

9

DECEMBER 31, 2004
CARVE-OUT BALANCE SHEET — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R		Services
Assets
Current assets:
Cash and cash equivalents	$	534,453		$	—	$	534,453
Trade accounts receivable and unbilled services, net		262,231			9,238		252,993
Investments in debt securities		569			—		569
Prepaid expenses		19,141			—		19,141
Deferred income taxes		28,626			—		28,626
Other current assets and receivables		22,863			725		22,138
Assets of discontinued operations		228,419			4,729		223,690
Total current assets		1,096,302			14,692		1,081,610
Property and equipment:
Land, buildings and leasehold improvements		51,654			—		51,654
Equipment		57,617			—		57,617
Furniture and fixtures		21,524			—		21,524
Motor vehicles		39,155			—		39,155
		169,950			—		169,950
Less accumulated depreciation		(49,072	)		—		(49,072	)
		120,878			—		120,878
Intangibles and other assets:
Investments in debt securities		11,552			—		11,552
Investments in marketable equity securities		24,425			24,425		—
Investments in non-marketable equity securities and loans		56,441			55,690		751
Investments in unconsolidated affiliates		120,984			—		120,984
Commercial rights and royalties		138,543			138,543		—
Accounts receivable — unbilled		46,669			46,669		—
Goodwill		96,602			508		96,094
Other identifiable intangibles, net		270,651			8,882		261,769
Deferred income taxes		13,653			—		13,653
Deposits and other assets		48,922			5,499		43,423
		828,442			280,216		548,226
Total assets	$	2,045,622		$	294,908	$	1,750,714

10

DECEMBER 31, 2004
CARVE-OUT BALANCE SHEET — UNAUDITED (Continued)
(in thousands)

			Subtract
	Consolidated		CR&R		Services
Liabilities, Shareholders’ Equity and Intercompany
Current liabilities:
Accounts payable	$	66,444	$	3,306	$	63,138
Accrued expenses		265,048		27,719		237,329
Unearned income		190,150		—		190,150
Income taxes payable		35,061		—		35,061
Current portion of obligations held under capital leases		14,888		—		14,888
Current portion of long-term debt		5,431		—		5,431
Other current liabilities		6,911		—		6,911
Liabilities of discontinued operations		32,771		4,074		28,697
Total current liabilities		616,704		35,099		581,605
Long-term liabilities:
Obligations held under capital leases, less current portion		16,452		—		16,452
Long-term debt, less current portion		758,110		—		758,110
Deferred income taxes		29,516				29,516
Minority interest		36,848		—		36,848
Other liabilities		19,901		—		19,901
		860,827		—		860,827
Total liabilities		1,477,531		35,099		1,442,432
Shareholders’ equity and intercompany:
Total shareholders’ equity and intercompany		568,091		259,809		308,282
Total liabilities, shareholders’ equity and intercompany	$	2,045,622	$	294,908	$	1,750,714

11

DECEMBER 31, 2004
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Operating activities:
Net income (loss)	$	1,043		$	10,553		$	(9,510	)
(Income) loss from discontinued operations, net of income taxes		(7,762	)		(10,385	)		2,623
(Gain) from sale of discontinued operations, net of income taxes		(54,422	)		(54,422	)		—
(Loss) income from continuing operations		(61,141	)		(54,254	)		(6,887	)
Adjustments to reconcile income (loss) from continuing operations to net cash (used in) provided by operating activities:
Depreciation and amortization		110,449			3,412			107,037
Amortization expense of debt issuance costs		3,565			—			3,565
Amortization of commercial rights and royalties assets		16,985			16,985			—
Restructuring (payments) accrual and write-off of other assets, net		(3,351	)		—			(3,351	)
Impairment of long-lived assets		—			—			—
Loss on sale of property and equipment, net		(7,186	)		—			(7,186	)
Gain from sale of certain assets		(5,967	)		—			(5,967	)
Gain from sale of a portion of an investment in a subsidiary		(24,688	)		—			(24,688	)
Non-operating gain on change of interest transaction		(10,030	)		—			(10,030	)
Loss on investments, net		8,956			8,956			—
Provision for deferred income taxes		10,652			—			10,652
Change in operating assets and liabilities:
Accounts receivable and unbilled services		(52,291	)		2,178			(54,469	)
Prepaid expenses and other assets		(20,098	)		(20,406	)		308
Accounts payable and accrued expenses		35,570			1,885			33,685
Unearned income		5,893			(5,751	)		11,644
Income taxes payable and other liabilities		(26,481	)		(4,482	)		(21,999	)
Other		615			—			615
Net cash (used in) provided by continuing operations		(18,548	)		(51,477	)		32,929
Net cash provided by (used in) discontinued operations		10,178			10,867			(689	)
Net cash (used in) provided by operating activities		(8,370	)		(40,610	)		32,240

12

DECEMBER 31, 2004
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED (Continued)
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Investing activities:
Acquisition of property, equipment and software		(41,459	)		—			(41,459	)
Payment of transaction costs in Transaction		(20,367	)		—			(20,367	)
Acquisition of businesses acquired, net of cash acquired		(2,299	)		—			(2,299	)
Acquisition of commercial rights and royalties		(53,000	)		(53,000	)		—
Proceeds from disposal of discontinued operations		188,329			188,329			—
Expenses of disposal of discontinued operations		(18,027	)		(18,027	)		—
Proceeds from sale of certain assets		9,218			—			9,218
Proceeds from sale of minority interest in subsidiary, net of expenses		35,963			—			35,963
Proceeds from disposition of property and equipment		6,732			—			6,732
Maturities of held-to-maturity investments		693			—			693
Purchase of available-for-sale investments		(1,042	)		—			(1,042	)
Purchase of equity securities		(13,070	)		(13,070	)		—
Proceeds from sale of equity securities		39,982			39,982			—
Purchase of other investments		(1,838	)		(1,838	)		—
Proceeds from other investments		667			—			667
Other		250			1			249
Net cash provided by (used in) continuing operations		130,732			142,377			(11,645	)
Net cash (used in) provided by discontinued operations		(8,877	)		(95	)		(8,782	)
Net cash (used in) provided by investing activities		121,855			142,282			(20,427	)
Financing activities:
Repayment of debt		(5,763	)		—			(5,763	)
Principal payments on capital lease obligations		(13,061	)		—			(13,061	)
Intercompany with parent companies		(985	)		—			(985	)
Proceeds from change in interest transaction		41,773			—			41,773
Intercompany		—			(102,503	)		102,503
Net cash (used in) provided by continuing operations		21,964			(102,503	)		124,467
Net cash (used in) discontinued operations		(22	)		(10	)		(12	)
Net cash (used in) provided by financing activities		21,942			(102,513	)		124,455
Effect of foreign currency exchange rate changes on cash		25,091		��	204			24,887
(Increase) decrease in cash and cash equivalents		160,518			(637	)		161,155
Consolidated cash and cash equivalents at beginning of period		375,163			1,865			373,298
Consolidated cash and cash equivalents at end of period	$	535,681		$	1,228		$	534,453
Cash and cash equivalents of discontinued operations	$	1,228		$	1,228		$	—
Cash and cash equivalents of continuing operations	$	534,453		$	—		$	534,453

13

DECEMBER 31, 2003

CARVE-OUT STATEMENT OF OPERATIONS — UNAUDITED
(in thousands)

				Subtract			Adjust
	Consolidated			CR&R			Intercompany			Services
Net revenues	$	1,472,637		$	127,144		$	(40,235	)	$	1,385,728
Add: reimbursed service costs		361,656			—			—			361,656
Gross revenues		1,834,293			127,144			(40,235	)		1,747,384
Costs, expenses and other:
Costs of revenues		1,228,390			86,494			(40,235	)		1,182,131
Selling, general and administrative		501,114			—			—			501,114
Interest income		(16,860	)		(4,526	)		—			(12,334	)
Interest expense		22,368			697			—			21,671
Other (income) expense, net		(8,010	)		(5,281	)		—			(2,729	)
Restructuring		4,765			—			—			4,765
Transaction expenses, net		48,676			—			—			48,676
		1,780,443			77,384			(40,235	)		1,743,294
Income before income taxes		53,850			49,760			—			4,090
Income tax expense		38,337			17,416			—			20,921
Income (loss) before minority interests and equity in earnings of unconsolidated affiliates		15,513			32,344			—			(16,831	)
Equity in (losses) earnings of unconsolidated affiliates		5			—			—			5
Minority interests		50			—			—			50
Income (loss) from continuing operations		15,568			32,344			—			(16,776	)
Income from discontinued operations, net of income taxes		14,166			9,590			—			4,576
Net income (loss)	$	29,734		$	41,934		$	—		$	(12,200	)

14

DECEMBER 31, 2003
CARVE-OUT BALANCE SHEET — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R		Services
Assets
Current assets:
Cash and cash equivalents	$	373,298		$	—	$	373,298
Restricted cash		—			—		—
Trade accounts receivable and unbilled services, net		197,805			10,687		187,118
Investments in debt securities		611			—		611
Prepaid expenses		19,329			—		19,329
Deferred income taxes		24,105			—		24,105
Other current assets and receivables		24,315			1,601		22,714
Assets of discontinued operations		322,899			91,168		231,731
Total current assets		962,362			103,456		858,906
				��
Property and equipment:
Land, buildings and leasehold improvements		44,665			—		44,665
Equipment		37,011			—		37,011
Furniture and fixtures		17,659			—		17,659
Motor vehicles		25,274			—		25,274
		124,609			—		124,609
Less accumulated depreciation		(16,332	)		—		(16,332	)
		108,277			—		108,277
Intangibles and other assets:
Investments in debt securities		10,426			—		10,426
Investments in marketable equity securities		58,294			58,294		—
Investments in non-marketable equity securities and loans		48,556			47,208		1,348
Investments in unconsolidated affiliates		121,176			—		121,176
Commercial rights and royalties		12,529			12,529		—
Advances to customer		70,000			70,000		—
Accounts receivable — unbilled		40,107			40,107		—
Goodwill		160,849			1,741		159,108
Other identifiable intangibles, net		331,309			13,328		317,981
Deferred income taxes		4,093			—		4,093
Deposits and other assets		51,784			6,810		44,974
		909,123			250,017		659,106
Total assets	$	1,979,762		$	353,473	$	1,626,289

15

December 31, 2003
CARVE-OUT BALANCE SHEET — UNAUDITED (Continued)
(in thousands)

			Subtract
	Consolidated		CR&R		Services
Liabilities, Shareholders’ Equity and Intercompany
Current liabilities:
Accounts payable	$	54,710	$	2,422	$	52,288
Accrued expenses		241,028		6,237		234,791
Unearned income		175,564		337		175,227
Income taxes payable		24,560		—		24,560
Current portion of obligations held under capital leases		15,087		—		15,087
Current portion of long-term debt		5,583		—		5,583
Other current liabilities		3,169		—		3,169
Liabilities of discontinued operations		54,529		9,193		45,336
Total current liabilities		574,230		18,189		556,041
Long-term liabilities:
Obligations held under capital leases, less current portion		10,230		—		10,230
Long-term debt, less current portion		760,101		—		760,101
Deferred income taxes		74,756		—		74,756
Other liabilities		25,347		1,507		23,840
		870,434		1,507		868,927
Total liabilities		1,444,664		19,696		1,424,968
Shareholders’ equity and intercompany:
Total shareholders’ equity and intercompany		535,098		333,777		201,321
Total liabilities, shareholders’ equity and intercompany	$	1,979,762	$	353,473	$	1,626,289

16

DECEMBER 31, 2003
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Operating activities:
Net income (loss)	$	29,734		$	41,934		$	(12,200	)
(Income) from discontinued operations, net of income taxes		(14,166	)		(9,590	)		(4,576	)
Income (loss) from continuing operations		15,568			32,344			(16,776	)
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:
Depreciation and amortization		81,124			3,162			77,962
Amortization expense of debt issuance costs		878			—			878
Amortization of commercial rights and royalties assets		3,508			3,508			—
Restructuring (payments) accrual and write-off of other assets, net		(2,366	)		—			(2,366	)
Transaction costs		44,057			—			44,057
Gain on sale of property and equipment, net		(536	)		—			(536	)
(Gain) loss on investments, net		(31,037	)		(31,658	)		621
Provision for deferred income taxes		16,721			—			16,721
Change in operating assets and liabilities:
Accounts receivable and unbilled services		137,468			(3,884	)		141,352
Prepaid expenses and other assets		57,524			23,521			34,003
Accounts payable and accrued expenses		2,128			(836	)		2,964
Unearned income		(68,317	)		286			(68,603	)
Income taxes payable and other liabilities		(13,069	)		(3,040	)		(10,029	)
Other		118			(485	)		603
Net cash provided by continuing operations		243,769			22,918			220,851
Net cash provided by discontinued operations		31,715			14,602			17,113
Net cash provided by operating activities		275,484			37,520			237,964

17

DECEMBER 31, 2003
CARVE-OUT STATEMENT OF CASH FLOWS — UNAUDITED (Continued)
(in thousands)

				Subtract
	Consolidated			CR&R			Services
Investing activities:
Acquisition of property, equipment and software		(38,783	)		—			(38,783	)
Repurchase of common stock in Transaction		(1,617,567	)		—			(1,617,567	)
Payment of transaction costs in Transaction		(67,630	)		—			(67,630	)
Acquisition of businesses, net of cash acquired		(4,817	)		(1,882	)		(2,935	)
Advances to customer		(3,739	)		(3,739	)		—
Acquisition of commercial rights and royalties		(20,710	)		(20,710	)		—
Proceeds from disposition of property and equipment		8,127			—			8,127
Maturities of held-to-maturity investments		570			—			570
Purchase of available-for-sale investments		(2,565	)		—			(2,565	)
Proceeds from sale of available-for-sale investments		26,375			—			26,375
Purchase of equity securities		(16,545	)		(16,545	)		—
Proceeds from sale of equity securities		69,559			69,220			339
Purchase of other investments		(305	)		(124	)		(181	)
Net cash (used in) provided by continuing operations		(1,668,030	)		26,220			(1,694,250	)
Net cash (used in) discontinued operations		(16,445	)		(1,364	)		(15,081	)
Net cash (used in) provided by investing activities		(1,684,475	)		24,856			(1,709,331	)
Financing activities:
Proceeds from issuance of debt, net of costs		733,433			—			733,433
Capital contribution in Transaction		390,549			—			390,549
Repayment of debt		(4,400	)		—			(4,400	)
Principal payments on capital lease obligations		(14,512	)		—			(14,512	)
Issuance of common stock		7,042			—			7,042
Intercompany		—			(59,742	)		59,742
Net cash provided by (used in) continuing operations		1,112,112			(59,742	)		1,171,854
Net cash (used in) discontinued operations		46			58			(12	)
Net cash provided by (used in) financing activities		1,112,158			(59,684	)		1,172,842
Effect of foreign currency exchange rate changes on cash		27,712			(856	)		28,568
(Decrease) increase in cash and cash equivalents		(269,121	)		1,836			(270,957	)
Consolidated cash and cash equivalents at beginning of period		644,284			29			644,255
Consolidated cash and cash equivalents at end of period	$	375,163		$	1,865		$	373,298
Cash and cash equivalents of discontinued operations	$	1,865		$	1,865		$	—
Cash and cash equivalents of continuing operations	$	373,298		$	—		$	373,298

18

     In accordance with GAAP the Company’s predecessor results have not been aggregated with its successor results and, accordingly, the filed financial statements do not show results of operations or cash flows for the twelve months ended December 31, 2003. However, in order to facilitate an understanding of the results of operations for the twelve months ended December 31, 2003, the Company presents its predecessor results and its successor results on a combined basis. The combined results of operations are non-GAAP financial measures and should not be used in isolation or as a substitution for the predecessor and successor results.

     Below is a reconciliation of the combined results for the year ended December 31, 2003 (in thousands):

	September 26, 2003			January 1, 2003			Year ended
	through			through			December 31,
	December 31, 2003			September 25, 2003			2003
	Successor			Predecessor			Combined
Net revenues	$	389,004		$	1,083,633		$	1,472,637
Add: reimbursed service costs		94,960			266,696			361,656
Gross revenues		483,964			1,350,329			1,834,293
Costs, expenses and other:
Costs of revenues		332,581			895,809			1,228,390
Selling, general and administrative		141,123			359,991			501,114
Interest income		(4,751	)		(12,109	)		(16,860	)
Interest expense		20,640			1,728			22,368
Other (income) expense, net		(2,568	)		(5,442	)		(8,010	)
Restructuring		—			4,765			4,765
Transaction		—			48,676			48,676
		487,025			1,293,418			1,780,443
(Loss) income before income taxes		(3,061	)		56,911			53,850
Income tax expense		10,115			28,222			38,337
(Loss) income before minority interests and equity in (losses) earnings of unconsolidated affiliates		(13,176	)		28,689			15,513
Equity in earnings (losses) of unconsolidated affiliates		13			(8	)		5
Minority interests		4			46			50
(Loss) income from continuing operations		(13,159	)		28,727			15,568
Income from discontinued operation		5,732			8,434			14,166
Net (loss) income	$	(7,427	)	$	37,161		$	29,734

19

	September 26, 2003			January 1, 2003
	through			through			Year ended
	December 31,			September 25,			December 31,
	2003			2003			2003
	Successor			Predecessor			Combined
Operating activities:
Net (loss) income	$	(7,427	)	$	37,161		$	29,734
(Income) from discontinued operations, net of income taxes		(5,732	)		(8,434	)		(14,166	)
Loss (gain) from sale of discontinued operations, net of income taxes		—			—			—
(Loss) income from continuing operations		(13,159	)		28,727			15,568
Adjustments to reconcile (loss) income from continuing operations to net cash (used in) provided by operating activities:
Depreciation and amortization		31,224			49,900			81,124
Amortization expense of debt issuance costs		878			—			878
Amortization of commercial rights and royalties assets		1,285			2,223			3,508
Restructuring (payments) accrual and write-off of other assets, net		(1,942	)		(424	)		(2,366	)
Transaction costs		—			44,057			44,057
Loss (gain) on sale of property and equipment, net		(325	)		(211	)		(536	)
Loss (gain) on investments, net		(2,952	)		(28,085	)		(31,037	)
Provision for deferred income taxes		750			15,971			16,721
Change in operating assets and liabilities:
Accounts receivable and unbilled services		20,868			116,600			137,468
Prepaid expenses and other assets		13,950			43,574			57,524
Accounts payable and accrued expenses		14,053			(11,925	)		2,128
Unearned income		17,399			(85,716	)		(68,317	)
Income taxes payable and other liabilities		4,847			(17,916	)		(13,096	)
Other		(168	)		286			118
Net cash provided by continuing operations		86,708			157,061			243,769
Net cash provided by discontinued operations		18,907			12,808			31,715
Net cash provided by operating activities		105,615			169,869			275,484

20

	September 26, 2003			January 1, 2003
	through			through			Year ended
	December 31,			September 25,			December 31,
	2003			2003			2003
	Successor			Predecessor			Combined
Investing activities:
Acquisition of property, equipment and software	$	(11,225	)	$	(27,558	)	$	(38,783	)
Repurchase of common stock in Transaction		(1,617,567	)		—			(1,617,567	)
Payment of transaction costs in Transaction		(64,734	)		(2,896	)		(67,630	)
Acquisition of businesses, net of cash acquired		(3,363	)		(1,454	)		(4,817	)
Advances to customer		—			(3,739	)		(3,739	)
Acquisition of commercial rights and royalties		(3,000	)		(17,710	)		(20,710	)
Proceeds from disposition of property and equipment		1,951			6,176			8,127
Maturities of held-to-maturity investments		325			245			570
Purchase of available-for-sale investments		(1,212	)		(1,353	)		(2,565	)
Proceeds from sale of available-for-sale investments		—			26,375			26,375
Purchase of equity securities		(5,900	)		(10,645	)		(16,545	)
Proceeds from sale of equity securities		7,633			61,926			69,559
Purchase of other investments		(120	)		(185	)		(305	)
Other		—			—			—
Net cash (used in) provided by continuing operations		(1,697,212	)		29,182			(1,668,030	)
Net cash (used in) provided by discontinued operations		(3,659	)		(12,786	)		(16,445	)
Net cash (used in) provided by investing activities		(1,700,871	)		16,396			(1,684,475	)
Financing activities:
Proceeds from issuance of debt, net of costs		733,433			—			733,433
Capital contribution in Transaction		390,549			—			390,549
Repayment of debt		(2,568	)		(1,832	)		(4,400	)
Principal payments on capital lease obligations		(3,103	)		(11,409	)		(14,512	)
Issuance of common stock		—			7,042			7,042
Intercompany with parent companies		—			—			—
Net cash provided by (used in) continuing operations		1,118,311			(6,199	)		1,112,112
Net cash provided by (used in) discontinued operations		24			22			46
Net cash provided by (used in) financing activities		1,118,335			(6,177	)		1,112,158
Effect of foreign currency exchange rate changes on cash		9,788			17,924			27,712
(Decrease) increase in cash and cash equivalents		(467,133	)		198,012			(269,121	)
Consolidated cash and cash equivalents at beginning of period		842,296			644,284			644,284
Consolidated cash and cash equivalents at end of period	$	375,163		$	842,296		$	375,163
Cash and cash equivalents of discontinued operations	$	1,865		$	280		$	1,865
Cash and cash equivalents of continuing operations	$	373,298		$	842,016		$	373,398

21

     Services Net Revenue and Operational EBITDA

     The following table presents the Company’s operations by reportable segment, with Product Development and Commercialization summed to equal Services. The Company is managed through three reportable segments, namely, the Product Development Group, the Commercial Services Group, and the PharmaBio Development Group. Management has distinguished these segments based on the normal operations of the Company. The Product Development Group is primarily responsible for all phases of clinical research and outcomes research consulting. The Commercial Services Group is primarily responsible for sales force deployment and strategic marketing services. The PharmaBio Development Group is primarily responsible for facilitating non-traditional customer alliances and its results consist primarily of product revenues, royalties and commissions and investment revenues relating to the financial arrangements with customers and other third parties.

     In August 2004, the Company completed its previously announced sale of certain assets related to its Bioglan business. The results of operations for Bioglan have been separately reported as a discontinued operation and are no longer included in the PharmaBio Development Group. In September 2005, the Company completed its previously announced sale of its EDP Business. The results of operations for the EDP Business have been separately reported as a discontinued operation and are no longer included in the Product Development Group. In December 2005, the Company completed the sale of its Pharmaplan business. The results of operations for Pharmaplan have been reported as a discontinued operation and are no longer included in the Pharmabio Development Group. All periods presented herein reflect Pharmaplan, the EDP Business and Bioglan as discontinued operations.

     The Company measures segment profitability based on Operational EBITDA. Operational EBITDA is defined as gross revenues less costs of revenues (except for the exclusion of depreciation and amortization included in costs of revenues) and selling, general and administrative expenses. When the Company enters into strategic agreements whereby its Commercial Services or Product Development Groups provide services to customers of the PharmaBio Development Group, service revenues are presented based upon market rates and are eliminated in consolidation. Intersegment revenues have been eliminated (in thousands):

22

Twelve months ended September 30, 2005

	Product						PharmaBio						Quintiles
	Development		Commercial Services		Services		Development			Eliminations			Consolidated
Service revenues:
External	$	1,100,597	$	647,529	$	1,748,126		—			—		$	1,748,126
Intersegment		4,149		95,919		100,068		—			(100,068	)		—
Total net services		1,104,746		743,448		1,848,194		—			(100,068	)		1,748,126
Commercial rights and royalties		—		—		—		107,321			—			107,321
Investment		—		—		—		(5,268	)		—			(5,268	)
Total net revenues		1,104,746		743,448		1,848,194		102,053			(100,068	)		1,850,179
Reimbursed service costs		414,602		69,529		484,131		—			(7,056	)		477,075
Gross revenues	$	1,519,348	$	812,977	$	2,332,325	$	102,053		$	(107,124	)	$	2,327,254
Segment Operational EBITDA	$	187,711	$	69,128	$	256,839	$	(73,856	)	$	—		$	182,983

Year Ended December 31, 2004

	Product						PharmaBio						Quintiles
	Development		Commercial Services		Services		Development			Eliminations			Consolidated
Service revenues:
External	$	960,502	$	602,670	$	1,563,172	$	—		$	—		$	1,563,172
Intersegment		—		65,687		65,687		—			(65,687	)		—
Total net services		960,502		668,357		1,628,859		—			(65,687	)		1,563,172
Commercial rights and royalties		—		—		—		51,425			—			51,425
Investment		—		—		—		(9,620	)		—			(9,620	)
Total net revenues		960,502		668,357		1,628,859		41,805			(65,687	)		1,604,977
Reimbursed service costs		296,482		61,084		357,566		—			(6,289	)		351,277
Gross revenues	$	1,256,984	$	729,441	$	1,986,425	$	41,805		$	(71,976	)	$	1,956,254
Segment Operational EBITDA	$	112,379	$	43,556	$	155,935	$	(83,349	)	$	—		$	72,856

Twelve Months Ended September 30, 2004

	Product						PharmaBio						Quintiles
	Development		Commercial Services		Services		Development			Eliminations			Consolidated
Service revenues:
External	$	911,356	$	567,530	$	1,478,886	$	—		$	—		$	1,478,886
Intersegment		—		52,040		52,040		—			(52,040	)		—
Total net services		911,356		619,570		1,530,926		—			(52,040	)		1,478,886
Commercial rights and royalties		—		—		—		54,599			—			54,599
Investment		—		—		—		(3,756	)		—			(3,756	)
Total net revenues		911,356		619,570		1,530,926		50,843			(52,040	)		1,529,729
Reimbursed service costs		283,236		62,905		346,141		—			2,979	)		343,162
Gross revenues	$	1,198,649	$	683,084	$	1,877,067	$	50,843		$	(55,019	)	$	1,872,891
Segment Operational EBITDA	$	99,053	$	34,606	$	133,659	$	(52,004	)	$	—		$	81,655

23

Year Ended December 31, 2003

	Product						PharmaBio					Quintiles
	Development		Commercial Services		Services		Development		Eliminations			Consolidated
Service revenues:
External	$	852,514	$	492,978	$	1,345,492	$	—	$	—		$	1,345,492
Intersegment		—		40,235		40,235		—		(40,235	)		—
Total net services		852,514		533,213		1,385,727		—		(40,235	)		1,345,492
Commercial rights and royalties		—		—		—		96,212		—			96,212
Investment		—		—		—		30,933		—			30,933
Total net revenues		852,514		533,213		1,385,727		127,145		(40,235	)		1,472,637
Reimbursed service costs		300,302		61,354		361,656		—		—			361,656
Gross revenues	$	1,152,816	$	594,567	$	1,747,383	$	127,145	$	(40,235	)	$	1,834,293
Segment Operational EBITDA	$	119,472	$	22,629	$	142,101	$	43,812	$	—		$	185,913

     In accordance with GAAP the Company’s predecessor results have not been aggregated with its successor results and, accordingly, the filed financial statements do not show results of operations or cash flows for the twelve months ended December 31, 2003. However, in order to facilitate an understanding of the results of operations for the twelve months ended December 31, 2003, the Company presents its predecessor results and its successor results on a combined basis. The combined results of operations are non-GAAP financial measures and should not be used in isolation or as a substitution for the predecessor and successor results.

     Below is a reconciliation of the combined results for the year ended December 31, 2003 (in thousands):

	Product						PharmaBio					Quintiles
	Development		Commercial Services		Services		Development		Eliminations			Consolidated
Service revenues:
External	$	229,904	$	130,705	$	360,609	$	—	$	—		$	360,609
Intersegment		—		10,458		10,458		—		(10,458	)		—
Total net services		229,904		141,163		371,067		—		(10,458	)		360,609
Commercial rights and royalties		—		—		—		25,635		—			25,635
Investment		—		—		—		2,760		—			2,760
Total net revenues		229,904		141,163		371,067		28,395		(10,458	)		389,004
Reimbursed service costs		76,594		18,366		94,960		—		—			94,960
Gross revenues	$	306,498	$	159,529	$	466,027	$	28,395	$	(10,458	)	$	483,964
Segment Operational EBITDA	$	30,122	$	6,918	$	37,040	$	4,444	$	—		$	41,484

24

January 1, 2003 through September 25, 2003 — Predecessor

	Product						PharmaBio
	Development		Commercial Services		Services		Development		Eliminations			Consolidated
Service revenues:
External	$	622,610	$	362,273	$	984,883	$	—	$	—		$	984,883
Intersegment		—		29,777		29,777		—		(29,777	)		—
Total net services		622,610		392,050		1,014,660		—		(29,777	)		984,883
Commercial rights and royalties		—		—		—		70,577		—			70,577
Investment		—		—		—		28,173		—			28,173
Total net revenues		622,610		392,050		1,014,660		98,750		(29,777	)		1,083,633
Reimbursed service costs		223,708		42,988		266,696		—		—			266,696
Gross revenues	$	846,318	$	435,038	$	1,281,356	$	98,750	$	(29,777	)	$	1,350,329
Segment Operational EBITDA	$	89,350	$	15,711	$	105,061	$	39,368	$	—		$	144,429

     Services Quarterly Financial Information (in millions except DSO)

	2003								2004								2005
	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		1Q		2Q		3Q
Services net revenues	$	339	$	352	$	340	$	354	$	372	$	387	$	418	$	452	$	451	$	482	$	463
Services operational EBITDA	$	34	$	39	$	36	$	34	$	26	$	28	$	46	$	56	$	57	$	70	$	74
Services contribution	$	153	$	163	$	158	$	170	$	168	$	172	$	193	$	205	$	198	$	224	$	210
Services SG&A	$	119	$	124	$	122	$	136	$	142	$	145	$	147		149	$	141	$	154	$	137
Services DSO — in days		15		16		11		2		10		13		12		11		15		17		19

25

     Services Net Revenue by Geography and Line of Business

     For the first nine months of 2005, approximately 34.3% of the Company’s net revenue was attributed to operations in the United States and 65.7% to operations outside the United States. Approximately 49.1%, 49.9%and 47.8% of its net revenue was attributed to its clinical development services in the first nine months of 2005, and the year ended December 31, 2004 and 2003, respectively; approximately 10.2%, 10.0% and 10.1% of the Company’s net revenue was attributed to its clinical technology services in the first nine months of 2005, and the year ended December 31, 2004 and 2003, respectively, and approximately 29.3%, 31.5% and 27.3% of its net revenue was attributed to commercialization services in the first nine months of 2005, and the year ended December 31, 2004 and 2003, respectively. Neither its medical communications and consulting services, nor its commercial rights and royalties accounted for more than 10% of its net revenue in any of these periods.

     Backlog and Net New Business Wins

     The Company reports backlog based on anticipated net revenue from uncompleted projects that its customers have authorized and the Company believes to be firm. Once work begins on a project, net revenue is recognized over the duration of the project. The backlog at December 31, 2005 and 2004 includes approximately $285 million and $357 million, respectively, of backlog related to services contracted from the Company’s service groups, primarily commercial services, in connection with the strategic alliances forged by its PharmaBio Development Group. Of the backlog amounts between the Company’s service groups and its PharmBio Development Group, $252 million and $314 million represents backlog associated with the Company’s Cymbalta^® contract.

     Net new business represents anticipated net revenue from contracts which the Company entered into during the period and adjusted for contracts that were canceled during the period. Approximately $32.9 million and $388 million of net wins on internal service contracts are included in net new business wins for the years ended December 31, 2004 and 2005, respectively. The $388.0 million of net wins of internal service contracts for 2004 includes $357 million of new business associated with the Company’s Cymbalta^® contract.

     The following analysis details the Company’s net new business wins and backlog trends for 2002, 2003, 2004 and 2005. Amounts are in millions and at fixed rates. At actual rates, net new business wins are $2,006 for the year ended December 31, 2005 and backlog is $2,614 at December 31, 2005.

	2002				2003				2004				2005
	1H		2H		1H		2H		1H		2H		1H		2H
Total Net New Business Wins	$	511	$	601	$	669	$	764	$	857	$	1,282	$	1,025	$	1,040
Product Development	$	291	$	370	$	417	$	510	$	585	$	549	$	645	$	803
Commercialization	$	219	$	230	$	252	$	254	$	271	$	733	$	379	$	237
Cymbalta®		—		—		—		—		—	$	357		—		—
Total Backlog	$	1,660	$	1,616	$	1,657	$	1,782	$	2,054	$	2,493	$	2,675	$	2,744
Cymbalta® backlog		—		—		—		—		—	$	314	$	282	$	252

26

Item 9.01 Financial Statements and Exhibits.

(d)      Exhibits

Exhibit No.	Description of Exhibit
99.01	Press release of Quintiles Transnational Corp. dated March 3, 2006
99.02	Press release of Quintiles Transnational Corp. dated March 6, 2006

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QUINTILES TRANSNATIONAL CORP.
	By:	/s/ John D. Ratliff
		John D. Ratliff Executive Vice President, Chief Financial Officer
Dated: March 8, 2006

28

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.01	Press Release of Quintiles Transnational Corp. dated March 3, 2006
99.02	Press release of Quintiles Transnational Corp. dated March 6, 2006