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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED JUNE 30, 1998 COMMISSION FILE NUMBER 1-8260

PRIMARK CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MICHIGAN 38-2383282
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

1000 WINTER STREET, SUITE 4300N, 02451
WALTHAM, MA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

617-466-6611
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

NO CHANGES
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No

Number of shares outstanding of each of the registrant's classes of common
stock, as of June 30, 1998:
Common Stock, without par value: 22,610,449

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2

PRIMARK CORPORATION
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1998

COVER....................................................... 1

INDEX....................................................... 2

PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements..................... 3
Item 2. Management's Discussion and Analysis
Results of Operations and Financial
Condition................................ 10

PART II -- OTHER INFORMATION
Item 4. Results of Votes of Security Holders..... 15
Item 6. Exhibits and Reports on Form 8-K......... 15

SIGNATURE................................................... 16

2
3

PART I -- FINANCIAL INFORMATION

PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

JUNE 30, DECEMBER 31,
1998 1997
-------- ------------
(IN THOUSANDS)

ASSETS
Current Assets
Cash and cash equivalents, at cost (which approximates
market value)........................................... $ 22,272 $ 12,780
Billed receivables less allowance for doubtful accounts of
$2,310 and $2,756, respectively......................... 97,400 70,084
Unbilled and other receivables............................ 23,452 9,546
Federal and state income tax benefit...................... -- 21,304
Other current assets...................................... 39,524 24,036
Net assets of discontinued operations (Note 1)............ 43,915 197,330
-------- ----------
226,563 335,080
Deferred Charges and Other Assets
Goodwill, less accumulated amortization of $77,112 and
$41,834, respectively................................... 519,889 556,737
Capitalized data and other intangible assets, less
accumulated amortization of $25,297 and $20,710,
respectively............................................ 40,137 47,512
Capitalized software, less accumulated amortization of
$14,752 and $20,162, respectively....................... 27,238 48,645
Other..................................................... 4,816 8,980
-------- ----------
592,080 661,874
Property, Plant and Equipment, at cost
Computer equipment........................................ 55,341 63,169
Leasehold improvements.................................... 16,256 17,631
Other..................................................... 25,266 9,806
-------- ----------
96,863 90,606
Less-accumulated depreciation............................. (50,116) (43,751)
-------- ----------
46,747 46,855
-------- ----------
$865,390 $1,043,809
======== ==========
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable............................................. $114,695 $ 27,602
Accounts payable.......................................... 13,252 14,125
Accrued employee payroll and benefits..................... 24,886 24,585
Federal income taxes payable.............................. 20,841 --
Foreign and other taxes payable........................... 42,184 10,717
Deferred income........................................... 94,872 69,931
Current portion of long-term debt, including capital lease
obligations............................................. 994 11,301
Other..................................................... 53,585 43,814
-------- ----------
365,309 202,075
Long-Term Debt and Other Current Liabilities
Long-term debt, including capital lease obligations....... 8,588 331,260
Deferred income taxes..................................... 21,365 21,133
Other..................................................... 16,167 18,370
-------- ----------
46,120 370,763
-------- ----------
Total liabilities.................................. 411,429 572,838
Commitments and Contingencies (Note 3)
Common Shareholders' Equity
Common stock and additional paid-in-capital............... 129,176 275,370
Retained earnings......................................... 328,519 198,658
Less-Cummulative foreign translation adjustment........... (3,734) (3,057)
-------- ----------
Total common shareholders' equity.................. 453,961 470,971
-------- ----------
Total liabilities and shareholders' equity................ $865,390 $1,043,809
======== ==========

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
3
4

PRIMARK CORPORATION AND SUBSIDIARIES

STATEMENTS OF INCOME

THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Operating Revenues................................... $108,874 $100,932 $213,285 $195,613
Operating Expenses
Cost of services................................... 43,252 40,119 84,201 79,422
Selling, general and administrative................ 41,555 40,807 80,649 78,539
Depreciation....................................... 4,397 4,398 8,503 8,881
Amortization of goodwill........................... 3,813 4,004 7,935 7,866
Amortization of other intangible assets............ 4,350 4,171 9,173 7,875
Restructuring charge (Note 2)...................... 68,677 5,000 68,677 6,800
-------- -------- -------- --------
Total operating expenses.................... 166,044 98,499 259,138 189,383
-------- -------- -------- --------
Operating income............................ (57,170) 2,433 (45,853) 6,230
Other Income and (Deductions)
Investment income.................................. 1,768 254 1,960 609
Interest expense................................... (1,405) (4,075) (5,554) (7,715)
Foreign currency gain.............................. 479 1,364 360 2,337
Other.............................................. 134 (445) (50) (1,274)
-------- -------- -------- --------
Total other income and (deductions)......... 976 (2,902) (3,284) (6,043)
-------- -------- -------- --------
Income (Loss) From Continuing Operations Before
Income Taxes....................................... (56,194) (469) (49,137) 187
Income Tax Expense (Benefit)......................... (8,217) 1,417 (4,782) 3,896
-------- -------- -------- --------
Loss From Continuing Operations...................... (47,977) (1,886) (44,355) (3,709)
Discontinued Operations (Note 1)
Discontinued operations, net of income tax expense
of $883 and $2,655 and $4,607 and $6,227,
respectively..................................... 1,214 2,920 6,112 8,858
Gain on Disposal of discontinued operations net of
income tax expense of $101,053 and $0 and
$101,053 and $0, respectively.................... 173,225 -- 173,225 --
-------- -------- -------- --------
Total Discontinued Operations............... 174,439 2,920 179,337 8,858
-------- -------- -------- --------
Income Before Extraordinary Loss..................... 126,462 1,034 134,982 5,149
Extraordinary Item-Loss on Early Extinguishment of
Debt, net of income tax benefit of $3,614 and $0
and $3,614 and $1,379, respectively (Note 4)....... (5,121) -- (5,121) (1,955)
-------- -------- -------- --------
Net Income Applicable to Common Stock................ $121,341 $ 1,034 $129,861 $ 3,194
======== ======== ======== ========
Earnings Per Common Share -- Basic and Dilutive (Note
7)
Loss from continuing operations.................... $ (1.77) $ (0.07) $ (1.64) ($ 0.14)
Discontinued operations............................ 6.45 0.11 6.64 0.33
Extraordinary loss................................. (0.19) -- (0.19) (0.07)
-------- -------- -------- --------
Net Income......................................... $ 4.49 $ 0.04 $ 4.81 $ 0.12
======== ======== ======== ========
Weighted Average Common Shares Outstanding
Basic and Dilutive (Note 7)........................ 27,054 26,237 26,998 26,660
======== ======== ======== ========

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
4
5

PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)

Balance -- Beginning of period.................. $207,178 $181,103 $198,658 $178,943
Add -- Net Income............................... 121,341 1,034 129,861 3,194
-------- -------- -------- --------
Balance -- End of period........................ $328,519 $182,137 $328,519 $182,137
======== ======== ======== ========

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
5
6

PRIMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30,
--------------------------
1998 1997
----------- -----------
(IN THOUSANDS)

Cash Flows from Operating Activities
Net income................................................ $ 129,861 $ 3,194
Adjustments to reconcile net income to net cash flows from
operating activities:
Discontinued operations (Note 1).......................... (6,112) (8,858)
Gain on sale of subsidiary................................ (173,225) --
Loss on extinguishment of intangible assets (Note 2)...... 60,650 --
Extraordinary loss on early extinguishment of debt (Note
4)..................................................... 5,121 1,955
Cash provided by (contributed to) discontinued operations
(Note 1)............................................... (7,066) 6,668
Depreciation and amortization............................. 25,611 24,622
Other charges and credits - net........................... 2,318 (1,069)
Changes in operating working capital, excluding the effect
of acquisitions:
Increase in billed, unbilled and other
receivables - net..................................... (41,019) (18,835)
Increase in other current assets....................... (7,521) (996)
Decrease in accounts payable........................... (1,426) (1,168)
Increase (decrease) in accrued employee payroll and
benefits.............................................. 388 (2,435)
Increase (decrease) in income and other taxes
payable - net......................................... 4,191 (691)
Increase in deferred income............................ 24,999 12,082
Increase in other current liabilities.................. 9,808 4,138
--------- ---------
Net cash provided from operating activities....... 26,578 18,607
--------- ---------
Cash Flows from Financing Activities
Issuance of short-term notes payable...................... 215,405 114,040
Repayment of short-term notes payable..................... (128,312) (106,799)
Issuance of long-term debt................................ -- 100,000
Repayment of long-term debt............................... (332,503) --
Common stock repurchased and retired (Note 5)............. (154,383) (26,633)
Common stock issuance..................................... 8,188 2,031
Debt issue costs and other................................ (745) (2,831)
Call premium.............................................. (2,873) --
--------- ---------
Net cash (used for) provided from financing
activities...................................... (395,223) 79,808
--------- ---------
Cash Flows from Investing Activities
Capital expenditures...................................... (9,716) (13,102)
Capitalized software...................................... (9,163) (9,615)
Purchase of subsidiaries - net of acquired cash........... (2,271) (86,090)
Proceeds from sale of subsidiary.......................... 432,000 --
Deferred tax on gain from sale of subsidiary.............. (30,000) --
Other - net............................................... (191) 222
Cash contributed to discontinued operations (Note 1)...... (2,628) (840)
--------- ---------
Net cash provided from (used for) investing
activities...................................... 378,031 (109,425)
--------- ---------
Effect of Exchange Rate Changes on Cash..................... 106 (746)
Net Increase (Decrease) in Cash and Cash Equivalents........ 9,492 (11,756)
Cash and Cash Equivalents, January 1........................ 12,780 25,276
--------- ---------
Cash and Cash Equivalents, June 30.......................... $ 22,272 $ 13,520
========= =========

The accompanying notes to the consolidated financial statements are an integral
part of these statements.
6
7

PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. DISCONTINUED OPERATIONS

The accompanying consolidated financial statements reflect the operating
results of TASC and TIMCO separately from the Company's continuing operations
for all periods presented. Consolidated interest expense has been allocated to
discontinued operations based upon the ratio of net assets to total consolidated
net assets. The net assets of discontinued operations represents the net book
value of the Company's investment in TASC and TIMCO and consists principally of
working capital, fixed assets, goodwill, and other non-current assets and
liabilities.

A) Sale of TASC

On April 1, 1998, the Company completed the sale of TASC and its affiliated
weather information companies to Litton Industries for $432 million in cash plus
an estimated equity adjustment of $11.5 million. The equity adjustment is based
upon changes in TASC's consolidated equity account, less certain inter-company
transactions, from September 30, 1997 through the date of the closing. On July
27, 1998, Litton sent notification that it was contesting specific components of
the equity adjustment totaling $4.2 million. Both Litton and the Company are in
the process of establishing the protocol to resolve all disputed amounts.

The Company recorded a gain on the sale of $173.2 million after deducting
transaction costs of $5.4 million, taxes of $101.1 million and the net book
value of TASC's assets. The cash, net of all transaction costs and taxes, to be
received by the Company from the foregoing sale will be approximately $337.0
million.

B) Sale of TIMCO

QUARTER ENDED YEAR TO DATE ENDED
JUNE 30, JUNE 30,
---------------- ------------------------
1998 1997 1998 1997
------ ------ -------- ------------
DISCONTINUED OPERATIONS (IN THOUSANDS) (IN THOUSANDS)

Income/(Loss)
TASC.................................. $ -- $3,127 $ 3,755 $ 9,231
TIMCO................................. 1,214 (207) 2,357 (373)
------ ------ ------- --------
Total............................ $1,214 $2,920 $ 6,112 $ 8,858
====== ====== ======= ========

JUNE 30, DECEMBER 31,
1998 1997
-------- ------------

Net Assets
TASC.................................. $ -- $155,376
TIMCO................................. 43,915 41,954
------- --------
Total............................ $43,915 $197,330
======= ========

2. RESTRUCTURING AND INTEGRATION CHARGES

7
8
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reorganization related costs. The effect of the $68.7 million charge was to
reduce earnings per diluted share by $1.95 for the quarter and year to date (see
Note 7).

The charge included the write-off of intangible assets for (i) $25.0
million of previously capitalized software related to the planned integration of
several product offerings on common software platforms, (ii) $1.5 million of
data that has been determined to be duplicative and will not be used as a result
of the software platform integration previously discussed, (iii) write off of
$23.9 million of goodwill associated with software and data written off which
was established as part of purchase accounting, (iv) write-off of $7.2 million
of goodwill related to DAFSA, and (v) write-off of $3.1 million of a trademark
no longer used in the restructured organization.

An additional $8.0 million of the restructuring charge relates primarily to
the integration of domestic and international sales offices and efficiencies
gained from technological advancements that will result in the phased reduction
of approximately 61 employees.

Details of the unutilized restructuring and integration costs as of June
30, 1998 are as follows (000's):

SECOND QUARTER UTILIZED JUNE 30, 1998
1998 PROVISION TO DATE PROVISION
-------------- -------- -------------
(IN THOUSANDS)

Abandonment of leased facilities, including
leasehold improvements.......................... $5,156 $ -- $5,156
Salaries and termination benefits................. 2,871 185 2,686
------ ---- ------
Total................................... $8,027 $185 $7,842
====== ==== ======

Cash flow expenditures, net of tax recovery, will be funded by the
Company's cash flows from operating activities. The remaining provision will be
phased in over the next two quarters and will be fully utilized within one year.
Through June 30, 1998, the Company paid severance and termination benefits to
three employees. The overall restructuring plan, when fully implemented, will
reduce amortization and other costs by over $7.0 million, net of tax, for each
of the next several years. The 1997 restructuring charges relating specifically
to DAFSA and Disclosure have been fully utilized in prior quarters.

3. CONTINGENCIES

There have been no significant developments with respect to the Company's
contingent liabilities which were disclosed in the Company's 1997 Annual Report.
Management cannot predict the final disposition of such issues, but believes
that adequate provision has been made in the financial statements and that the
ultimate resolution of any outstanding issues will not have a material adverse
effect on the Company's financial condition.

4. REFINANCING

On April 1, 1998, the Company amended the terms of its revolving credit
facility and term loan agreement. Under the terms of the revised agreement,
which became effective April 1, 1998, the Company used the proceeds from the
sale of TASC to (i) prepay all amounts outstanding on the Company's $112 million
senior callable bonds, including a 4.375% premium aggregating $4.9 million, (ii)
prepay $220 million of the Company's outstanding term loan together with accrued
interest thereon, and (iii) prepay approximately $500,000 of the Company's other
indebtedness.

In conjunction with the above, the Company replaced its outstanding $75
million credit facility with a $225 million revolving credit facility which
expires in 2002. Interest on the borrowings under the new revolving credit
facility is payable at rates ranging from 0.375% to 1.00% above the current
prevailing LIBOR rate of interest. Pursuant to the credit facility negotiations,
the Company incurred fees of $125,000 upon the sale of

8
9
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

TASC and $325,000 for increasing the amounts allowed to be drawn on the line for
the repurchase of Company shares as part of the "Dutch Auction" self-tender
offer.

As a result of the prepayment of debt and amended terms of the revolving
credit facility, the Company wrote off the associated deferred financing costs,
and paid a call premium of $4.9 million related to the prepayment of the $112
million of senior callable bonds. This resulted in an extraordinary loss of $8.7
million, or $5.1 million on an after tax basis for the quarter ended June 30,
1998.

5. REPURCHASE OF COMMON STOCK

On May 20, 1998, the Company announced a "Dutch Auction" self-tender offer,
which expired on June 17, 1998. The Company purchased 4,540,000 shares at $34
per share or approximately 17% of its outstanding shares. The Company borrowed
from its existing revolving credit facility for the share repurchases.

Also, the Company implemented an open market purchase program on July 2,
1998 and plans to buy up to 2,000,000 shares of its common stock from time to
time, depending on market conditions. As of June 30, 1998, no shares were
repurchased. From July 1, 1998 through August 11, 1998, 112,000 shares were
repurchased at a total cost of $3.5 million.

6. GENERAL

There have been no significant changes in the Company's principal
accounting policies that were set forth in the 1997 Annual Report and Form 10-K.
Certain reclassifications have been made to the prior year's statements to
conform with the 1998 presentation.

The unaudited information furnished herein, in the opinion of management,
reflects all adjustments necessary for a fair statement of the results of
operations during the interim periods.

The revenues, expenses, net income and earnings per share for the interim
periods should not be construed as representative of revenues, expenses, net
income and earnings per share for all or any part of the balance of the current
year or succeeding periods.

7. EARNINGS PER SHARE

SFAS No. 128, "Earnings Per Share" was adopted by the Company on December
31, 1997 and states, among other things, that if there is a loss from continuing
operations, a company should not include options and other potential common
shares in the denominator of a dilutive per-share computation even if including
those potential common shares in other dilutive per-share computations may be
dilutive to their comparable basic per-share amounts. Therefore, the "Earnings
Per Common Share -- Basic and Dilutive" included within the Company's Statements
of Income exclude the dilutive effect of options and other potential common
shares.

If options and other potential common shares were included, weighted
average common and common equivalent shares outstanding and the related dilutive
earnings per common share would have been as follows (in thousands except per
share amounts):

PRO-FORMA WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING

THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
--------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----

Basic.................................. 27,054 26,237 26,998 26,660
Effect of Dilutive Securities.......... 1,066 1,375 1,187 1,458
------ ------ ------ ------
Diluted................................ 28,120 27,612 28,185 28,118

9
10
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PRO-FORMA EARNINGS PER COMMON SHARE -- ASSUMING DILUTION BENEFIT

THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
--------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----

Loss from continuing operations........ $(1.71) $(0.07) $(1.57) (0.13)
Discontinued operations................ 6.20 0.11 6.36 0.32
Extraordinary loss..................... (0.18) -- (0.18) (0.07)
------ ------ ------ ------
Net Income............................. $ 4.32 $ 0.04 $ 4.61 $ 0.11

8. NEWLY ISSUED ACCOUNTING STANDARDS

The Company adopted SFAS No. 130, "Reporting Comprehensive Income," which
was issued by the FASB in June of 1997. This standard requires companies to
report and display comprehensive income and its components in a full set of
general-purpose financial statements. The following table provides a
reconciliation of net income to comprehensive income.

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1998 1997 1998 1997
-------- ------ -------- ------
(IN THOUSANDS) (IN THOUSANDS)

Net Income................................ $121,341 $1,034 $129,861 $3,194
Cumulative Translation Adjustment......... (869) 101 (677) (2,366)
Tax Benefit of Option Exercise............ 1,094 143 2,484 372
-------- ------ -------- ------
Comprehensive Income...................... $121,566 $1,278 $131,668 $1,200

In June of 1997 the FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information," which will be applicable for the Company
in this year. Management has not yet assessed the impact of implementation of
this standard.

10
11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Results of Operations

Primark reported net income of $121.3 million ($4.49 per share) and $129.8
million ( $4.81 per share) for the three and six months ended June 30, 1998. Net
income for the three and six months ended June 30, 1997 was $1.0 million ($0.04
per share) and $3.2 million ($0.12 per share). In accordance with SFAS No. 128
all per share calculations, which include the effect of restructuring charges
(creating a loss from continuing operations) exclude the impact of any dilutive
securities.

During the second quarter three significant events affected net income.
First, Primark's subsidiary TASC was sold for $432 million resulting in an after
tax gain of $173.2 million recorded to discontinued operations. Second, with the
proceeds from the sale of TASC, Primark repaid $220 million of commercial bank
debt and $112 million of senior notes. The related unamortized deferred bank
cost together with the call premium on the senior notes was written off as an
extraordinary loss totaling $5.1 million net of tax. Finally, the Company
instituted a corporate restructuring plan to reflect the sale of TASC and
position the Primark product lines in a more integrated fashion to address
market needs and opportunities. The restructuring plan, including the
extraordinary loss mentioned previously, resulted in a $77.4 million charge to
operating income and lowered net income $59.8 million. While not materially
affecting net income for the quarter, on June 17, 1998 the Company also
completed a "Dutch Auction" self-tender offer for the repurchase of 4.5 million
shares of its common stock at a cost of $154.4 million.

When the restructuring charges are excluded, the Company had income from
continuing operations of $6.7 million ($0.24 per share on a dilutive basis) for
the three months ended June 30, 1998 compared to $3.1 million ($0.11 per share
on a dilutive basis) for the same period last year. For the six months ended
June 30, 1998 the Company had $10.3 million ($0.37 per share on a dilutive
basis) of income from continuing operations compared to $2.5 million ($0.09)
earned last year when restructuring items are eliminated.

Including restructuring charges, the loss from continuing operations was
$48.0 million ($1.77 per share) and $44.4 million ($1.64 per share) for the
three and six months ended June 30, 1998, respectively, compared to a loss of
$1.9 million ($0.07 per share) and $3.7 million ($0.14 per share) for the three
and six month periods ended June 30, 1997, respectively.

Restructuring Charges

Effective June 1, 1998, the Company was reorganized in order to
strategically focus solely on its information services businesses. In connection
with this reorganization, the Company recorded a pre-tax charge of $77.4
million, of which $8.7 million is recorded as an extraordinary loss on early
extinguishment of debt and the remaining $68.7 million is recorded within
operating expenses for direct and other reorganization related costs. The
associated tax benefit of the extraordinary item and the other restructuring
charges is $3.6 million and $14.0 million, respectively.

The effect of the $68.7 million charge was to reduce earnings per share on
a dilutive basis in 1998 by $1.95 for the quarter and year to date. The
restructuring charge was the result of a decision to implement a new
organizational structure designed to better serve the Company's financial
services customers, more quickly capitalize on evolving market opportunities and
improve margins. The restructuring charge in 1998 includes: (i) write-offs of
$25.0 million of capitalized software related to the planned integration of
several product offerings on common software platforms, (ii) write-off of $1.5
million of data that has been determined to be duplicative and will not be used
as a result of data ingestion software integration, (iii) write-off of $23.9
million of goodwill associated with software and data written off which was
established as part of purchase accounting, (iv) write-off of $7.1 million of
goodwill related to DAFSA, (v) write-off of $3.1 million of a trademark no
longer used in the restructured organization, and (vi) an $8.0 million accrual
related to the integration of international sales offices and severance. The
restructuring will result in the phased reduction of 61 employees. The 1997
second quarter includes a restructuring charge of $5.0 million ($0.18 per share
on a dilutive basis) for the DAFSA operation. Due to the unprofitable condition
of DAFSA, no tax benefits associated with the restructuring charge or other
operating losses have been recorded, resulting in a higher

11
12

effective tax rate than comparable periods. The 1997 year to date income from
continuing operations also includes a $1.8 million restructuring charge ($0.06
per share on a dilutive basis) related to Disclosure.

Earnings Per Share

PRO-FORMA WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING

THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
--------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----

PRO-FORMA EARNINGS PER COMMON SHARE -- ASSUMING DILUTION BENEFIT

THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
--------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----

Continuing Operations

The most important decisions made by management in 1998 have been related
to maximizing the value of the Company's commitment to the financial, economic
and market research information business. The reorganized Company has been
integrated into three divisions consisting of the Primark Financial Information
Division, The Primark Analytics Division, and The Primark Decision Information
Division.

The Primark Financial Information Division consists of the businesses of
Datastream/ICV, including Primark Investment Management Services, along with
Disclosure and Worldscope. This Division accounts for approximately 71% of
Primark's consolidated revenues and is focused on developing "enterprise wide"
products and services for major financial institutions on a global basis. It
also has responsibility for all real-time and transactional products, investment
accounting, and the reference and consumer markets. This division grew revenues
3.3 % for the three and six months ended June 30, 1998. This division exhibited
double-digit percentage growth on a year to date basis, exclusive of currency
and exchange fees, across all product groups with the exception of Disclosure's
traditional paper document business. The effects of currency adversely affected
revenues and operating income primarily for the Datastream/ICV product lines for
both the quarter and year to date. Offsetting the negative impact of currency
movements on revenues and operating income was a gain on currency transactions
of $ 0.5 million and $0.4 million for the three and six month periods ended June
30, 1998. Exclusive of currency, Datatream/ICV's research products,
transactional products net of exchange fees and investment accounting related
products grew 12%, 26% and 13%, respectively, and 11%, 26% and 17%,
respectively, for the quarter and year to date. Datastream/ICV's real

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time and transactional products, lead by Topic 3, are the leading providers of
on-line equity trading products in the U.K. with an approximate 69% market
share. The Topic 3 product line has grown 33% and 32% for the quarter and year,
respectively, exclusive of the effect of currency. The Disclosure product lines
have exhibited growth in the electronic product revenues of 16.8% and 22.7% for
the three and six month periods ended, respectively. This increase, however, was
more than offset by decreases in Disclosure's paper document business which had
a drop in revenues of 21.0% and 19.3% for the three and six months ended,
respectively. As of June 30, 1998, Disclosure's electronic business represented
43% of Disclosure's overall revenues. The next generation of electronic products
at Disclosure is being led by its Global Access platform, which has grown 122.8%
and 158.9% for the quarter and year to date, ended, respectively. Management
believes that new products to be released in the latter part of 1998 through the
first half of 1999, together with the anticipated stabilization of Disclosure's
legacy paper document business, should result in improved growth prospects for
this Division.

The Primark Financial Analystics Division accounts for approximately 17% of
Primark's consolidated revenues and includes the businesses of IBES, Baseline
and Vestek. This Division will concentrate on developing and marketing a wide
variety of analytical products which combine databases, advanced software,
analytical techniques and forecasts for all phases of the investment process for
money managers, fund sponsors, and other investors. This division's revenues
grew 26.5% and 29.1% for the three and six months ended June 30, 1998,
respectively. Revenues from the sale of IBES data and analytical solutions
increased 23.9% and 28.5%, the Baseline product increased revenues 36.0% and
33.8%, and Vestek's product increased revenues 15.3% and 18.3%, for the three
and six months ended June 30, 1998, respectively.

The Primark Decision Information Division accounts for approximately 12% of
Primark's consolidated revenues and will acquire, develop and operate
information content businesses that are primarily focused in areas other than
the financial marketplace. However, it will also provide products and services
for decision support to financial customers as well. This division contains the
businesses of WEFA and the Yankee Group. This division has grown revenues 13.9%
and 10% for the three and six month periods ended June 30, 1998, respectively.

Discontinued Operations

On April 1, 1998, the Company sold its applied information division TASC,
Inc. and its weather information companies to Litton Industries and its
affiliates for $432 million in cash plus an estimated equity adjustment of $11.5
million. On July 27, 1998, Litton sent notification that it was contesting
specific components of the equity adjustment totaling $4.2 million. The Company
expects a fair resolution to these disputes will be reached and the proceeds
owed will be received by the end of September. The Company recorded an after tax
gain of $173.2 million on the sale of TASC equal to $6.40 and $6.42 per share
for the three and six months ended June 30, 1998, respectively. The cash, net of
all transaction costs and taxes, to be received by the Company from the
foregoing sale is currently estimated to be $337.0 million.

During the six months ended June 30, 1998, TASC generated net income of
$3.8 million ($0.14 per share). For the three months ended June 30, 1998 TASC
did not contribute to the Company's earnings. During the three and six months
ended June 30, 1997, TASC generated net income of $3.1 million ($0.12 per share)
and $7.1 million ($0.27 per share), respectively.

In June 1997, the Company adopted a formal plan to sell its non-core
transportation services segment consisting of the Triad International
Maintenance Corporation ("TIMCO"). On August 11, 1998 the Company announced that
it had entered into a definitive agreement for the sale of TIMCO to a wholly
owned division of Aviation Sales Company for a cash price of $70.0 million,
subject to adjustment. The closing is subject to a number of conditions and
accordingly, no assurances can be given that the transaction will be
consummated. During the three and six months ended June 30, 1998, TIMCO
generated net income of $1.2 million ($0.04 per share) and $2.4 million ($0.09
per share), respectively. During the three and six months ended June 30, 1997,
TIMCO generated a net loss of $0.2 million ($0.01 per share) and $0.4 million
($0.02 per share), respectively.

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Extraordinary Item

The 1998 net income includes the effect of a $5.1 million (after tax)
extraordinary loss ($0.19 per share) recorded in the second quarter of 1998 for
the write-off of debt issue costs associated with (a) the prepayment of the
Company's $112 million senior callable bonds, including a 4.375% premium
aggregating $4.9 million and (b) the repayment of $220 million of the Company's
outstanding term loan. The 1997 net income includes the effect of a $2.0 million
(after tax) extraordinary loss ($0.07 per share) recorded in the first quarter
of 1997 for the write-off of debt issue costs associated with prior debt which
was successfully refinanced.

CAPITAL RESOURCES AND LIQUIDITY

The Company's cash and cash equivalent balances increased $9.5 million
during the six months ended June 30, 1998 as a result of operating activities
contributing $26.6 million, investing activities providing $378.0 million and
financing activities using $395.2 million.

Most of the $26.6 million increase in cash flows from operating activities
is from net income, excluding the effects of restructuring of $6.7 million plus
non cash charges for depreciation and amortization of $25.6 million offset by a
change in working capital of $10.6 million.

Financing activities for the year to date used $395.2 million and were
effected by the following three transactions: a) use of the proceeds from the
sale of TASC to pay down debt, b) amounts borrowed under the Company's line of
credit for shares repurchased under the "Dutch Auction" self-tender offer, and
c) common stock issuance pursuant to the Company's option plans. The Company
used the proceeds from the sale of TASC to (i) prepay all amounts outstanding on
the Company's $112 million senior callable bonds, including a 4.375% premium
aggregating $4.9 million together with the accrued interest thereon, (ii) prepay
$220 million of the Company's outstanding term loan together with accrued
interest thereon, and (iii) prepay $0.5 million of the Company's other
indebtedness. In conjunction with the sale of TASC, the Company replaced its
outstanding $75 million credit facility with a $225 million revolving credit
facility which expires in 2002. Interest on the borrowings under the new
revolving credit facility is payable at rates ranging from 0.375% to 1.00% above
the current prevailing LIBOR rate of interest. On May 20, 1998, the Company
announced a "Dutch Auction" self-tender offer, which expired on June 17, 1998.
The Company purchased 4,540,000 shares at $34 per share or approximately 17% of
its outstanding shares. The Company borrowed $87.1 million under its line of
credit from the beginning of the year primarily for the share repurchases. The
Company incurred costs of $125,000 in conjunction with the sale of TASC and
$325,000 for increasing amounts allowed to be drawn on the line for repurchase
of Company shares as part of the "Dutch Auction" self-tender offer. The Company
received $8.1 million in proceeds from share issuance related to the various
stock option plans outstanding.

On April 1, 1998, the Company completed the sale of TASC and its affiliated
weather information companies to Litton Industries for $432 million in cash. The
Company has paid $30.0 million in taxes of the amount owed to date on the sale
and will be required to pay an additional amount of approximately $71.0 million
over the next twelve months. Investing activities also included $9.7 million for
capital expenditures and $9.1 million for software. Capital expenditures
consisted primarily of computer equipment purchases while capitalized software
related primarily to software architecture related to improving delivery of the
Company's products and services.

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PART II -- OTHER INFORMATION

ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS

The Company's Annual Meeting of shareholders was held on May 27, 1998 for
the purpose of electing a board of directors, and approving the appointment of
independent auditors. Proxies for the meeting were solicited pursuant to Section
14(a) of the Securities Exchange Act of 1924. There was no solicitation in
opposition to management's solicitations.

All of management's nominees for directors listed in the proxy statement
were elected with the following vote:

SHARES SHARES
VOTED "FOR" % WITHHELD %
------------- ----- -------- ----

Kevin J. Bradley............................. 24,262,668 99.6% 97,002 0.4%
John C. Holt................................. 24,177,579 99.3% 182,091 0.7%
Joseph E. Kasputys........................... 24,269,501 99.6% 90,169 0.4%
Steven Lazarus............................... 24,264,569 99.6% 95,101 0.4%
Patricia McGinnis............................ 24,268,805 99.6% 90,865 0.4%
Jonathan Newcomb............................. 24,279,479 99.7% 80,191 0.3%
Constance K. Weaver.......................... 24,272,695 99.6% 86,975 0.4%

The appointment of Deloitte and Touche LLP as independent auditors for the
year ended December 31, 1998 was approved by the following vote:

SHARES SHARES
SHARES VOTED SHARES NOT
VOTED FOR % AGAINST % ABSTAINING % VOTED %
--------- ----- ------------ ---- ---------- ---- --------- ----

24,274,858 99.7% 35,156 0.1% 49,656 0.2% 0 0.0%

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS
27* Financial Data Schedule

(B) THE COMPANY FILED A REPORT ON FORM 8-K ON APRIL 8, 1998 REGARDING THE
DISPOSITION OF TASC.