Exhibit 99.1
IMS Health Reports $0.29 Earnings Per Share for 2003 Third Quarter
FAIRFIELD, Conn.--(BUSINESS WIRE)--Oct. 22, 2003--
Third-Quarter 2003 Revenue Rises 13 Percent Reported,
8 Percent Constant Dollar
IMS Health (NYSE: RX) today reported third-quarter diluted
earnings per share of $0.29 on both an SEC-reported and adjusted
basis, compared with $0.29 on an SEC-reported basis and $0.27 on an
adjusted basis in the year-earlier quarter. Revenue for the three
months ended September 30, 2003 grew to $346.0 million. Adjusted
results are used by management to measure the performance of IMS core
operations, and exclude gains and losses on non-core transactions,
severance and impairment charges and certain other items. Investors
should review the detailed reconciliation of adjusted results to
SEC-reported results included in Tables 3, 4, 7 and 8 and accompanying
notes. IMS is the world's leading provider of information solutions to
the pharmaceutical and healthcare industries.
"IMS delivered a strong performance for the third quarter and we
continue to see the results of our enhanced customer focus and
execution," said David Thomas, IMS chairman and chief executive
officer. "We're driving new growth for both IMS and our customers, and
sustaining the momentum built earlier in the year. Our underlying
revenue growth is accelerating, our free cash flow is strong and we
remain on track to achieve our 2003 full-year targets."
Third-Quarter 2003 Results
Revenue for the 2003 third quarter totaled $346.0 million, up 13
percent on a reported basis. When calculated on a constant-dollar
basis, which eliminates the impact of year-over-year foreign exchange
fluctuations, quarterly revenue grew 8 percent from the third quarter
of 2002. Operating income was $107.9 million, compared with $110.5
million in the year-earlier quarter, down 2 percent. Net income for
the quarter totaled $69.2 million on both an SEC-reported and adjusted
basis. This compares with net income of $82.3 million on an
SEC-reported basis in the year-earlier quarter, a 16 percent decline,
and $76.7 million on an adjusted basis in the 2002 third quarter, down
10 percent. SEC-reported earnings per share on a diluted basis was
$0.29, equal to the year-earlier quarter. Adjusted diluted earnings
per share of $0.29 in the 2003 third quarter increased 7 percent over
the 2002 third quarter.
Adjusted results for the third quarter of 2003 include certain net
pre-tax charges totaling approximately $6.0 million. See Tables 3 and
7 for a reconciliation between SEC and adjusted results for the 2003
third quarter and first nine months, respectively, and Tables 4 and 8
for a reconciliation between SEC and adjusted results for the 2002
third quarter and first nine months, respectively.
Share Repurchase Program
During the third quarter of 2003, IMS purchased approximately 0.2
million shares of company stock at an average price of $17.97 per
share, for a total cost of $4.4 million. In April 2003, the board
authorized the company to buy up to 10 million additional IMS shares
under a new stock repurchase program. Approximately 9.2 million shares
remain available under this program as of September 30, 2003.
Consolidated Balance Sheet Highlights
IMS's cash, cash equivalents and short-term marketable securities
as of September 30, 2003 totaled $341.7 million, compared with $289.3
million on December 31, 2002. Total debt as of September 30, 2003 was
$528.3 million, down from $529.8 million at the end of 2002. The
December 31, 2002 balance sheet has been restated to present CTS on a
discontinued operations basis (see Table 9).
Analyst Conference Call, Presentation Slides
Executive management will review the company's performance during
a conference call with analysts at 8:30 a.m. Eastern Time on Thursday,
October 23, 2003. Details for accessing the call can be found on the
IMS website - www.imshealth.com. Prior to the call, a copy of this
press release and any other financial and statistical information
presented during the analyst conference call will be made available
in the "Investors" area of IMS's website, under "Presentations &
Analyst Calls."
About IMS
Operating in more than 100 countries, IMS is the world's leading
provider of information solutions to the pharmaceutical and healthcare
industries. With $1.4 billion in 2002 revenue and nearly 50 years of
industry experience, IMS offers leading-edge business intelligence
products and services that are integral to clients' day-to-day
operations, including marketing effectiveness solutions for
prescription and over-the-counter pharmaceutical products; sales
optimization solutions to increase pharmaceutical sales force
productivity; and consulting and customized services that turn
information into actionable insights.
This press release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Although IMS
Health believes the expectations contained in such forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove correct. This information may involve risks
and uncertainties that could cause actual results of IMS Health to
differ materially from the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not
limited to (i) the risks associated with operating on a global basis,
including fluctuations in the value of foreign currencies relative to
the U.S. dollar, and the ability to successfully hedge such risks,
(ii) to the extent IMS Health seeks growth through acquisitions and
joint ventures, the ability to identify, consummate and integrate
acquisitions and ventures on satisfactory terms, (iii) the ability to
develop new or advanced technologies and systems for its businesses on
time and on a cost-effective basis, and the ability to implement
cost-containment measures, (iv) regulatory, legislative and
enforcement initiatives, particularly in the areas of medical privacy
and tax, (v) to the extent unforeseen cash needs arise, the ability to
obtain financing on favorable terms, and (vi) deterioration in
economic conditions, particularly in the pharmaceutical, healthcare or
other industries in which IMS Health's customers operate. Additional
information on factors that may affect the business and financial
results of the Company can be found in filings of the Company made
from time to time with the Securities and Exchange Commission.
Table 1
IMS Health
SEC Income Statement (a)
Three Months Ended September 30
(unaudited, in millions except per share)
2003 2002 % Fav
SEC SEC (Unfav)
------------------------
Revenue
Sales Management $206.8 $187.0 11 %
Market Research 125.3 106.0 18
Other 13.9 13.0 6
--------- -------
Total 346.0 306.0 13
Operating Expenses
Operating Costs (138.0)(110.7) (25)
Selling and Administrative (81.7) (70.4) (16)
Depreciation and Amortization (18.4) (14.4) (28)
--------- ------
Total (238.0)(195.5) (22)
Operating Income 107.9 110.5 (2)
Interest expense, net (2.9) (2.4)
Gains from investments, net (d) 2.0 1.2
Loss on issuance of investees' stock, net (e) (0.1) (0.5)
Other expense, net (f) (1.1) (1.5)
-----------------
Pretax Income 105.7 107.3 (1)
Provision for Income Taxes (g) (36.7) (33.2)
TriZetto Equity Income (Loss), Net (b) 0.2 (0.4)
---------- ------
Net Income from continuing operations 69.2 73.6 (6)
Income from discontinued operations - CTS (c) 0.0 8.6
-----------------
Net Income $69.2 $82.3 (16)
Diluted EPS:
Income from continuing operations 0.29 0.26
Income from discontinued operations -
CTS (c) 0.00 0.03
-----------------
Total Diluted EPS $0.29 $0.29 0 %
Shares Outstanding:
Weighted Average Diluted 241.8 283.3 15 %
End-of-Period Actual 239.5 281.4 15
The accompanying notes are an integral part of these financial
tables.
Table 2
IMS Health
Adjusted Income Statement (a)
Three Months Ended September 30
(unaudited, in millions except per share)
2003 2002 % Fav Constant $
Adjusted Adjusted (Unfav) Growth
-----------------------------------
Revenue
Sales Management $206.8 $187.0 11 % 5 %
Market Research 125.3 106.0 18 13
Other 13.9 13.0 6 4
-------------------
Total 346.0 306.0 13 8
Operating Expenses
Operating Costs (138.0) (110.7) (25)
Selling and Administrative (81.7) (70.4) (16)
Depreciation and
Amortization (18.4) (14.4) (28)
-------------------
Total (238.0) (195.5) (22)
Operating Income 107.9 110.5 (2) (7)
Interest expense, net (2.9) (2.4) (22)
Other expense, net (5.3) (4.9) (7)
-------------------
Pretax Income 99.7 103.2 (3)
Provision for Income Taxes (30.7) (32.4) 5
TriZetto Equity Income (Loss),
Net (b) 0.2 (0.4) NM
-------------------
Net Income from continuing
operations 69.2 70.4 (2)%
Income from discontinued operations
- CTS (c) 0.0 6.3 (100)
--------------------
Net Income $69.2 $76.7 (10)%
Diluted EPS:
Income from continuing
operations 0.29 0.25 16
Income from discontinued
operations - CTS (c) 0.00 0.02 (100)
-------------------
Total Diluted EPS $0.29 $0.27 7 %
Shares Outstanding:
Weighted Average Diluted 241.8 283.3 15 %
End-of-Period Actual 239.5 281.4 15
The accompanying notes are an integral part of these financial
tables.
Table 3
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Three Months Ended September 30, 2003
(unaudited, in millions except per share)
Adjusted
SEC Q3 Adjustments Q3
---------------------------
Revenue
Sales Management $206.8 $0.0 $206.8
Market Research 125.3 0.0 125.3
Other 13.9 0.0 13.9
------- ------ ------
Total 346.0 0.0 346.0
Operating Expenses
Operating Costs (138.0) 0.0 (138.0)
Selling and Administrative (81.7) 0.0 (81.7)
Depreciation and Amortization (18.4) 0.0 (18.4)
-------- ------ ------
Total (238.0) 0.0 (238.0)
Operating Income 107.9 0.0 107.9
Interest expense, net (2.9) 0.0 (2.9)
Gains from investments, net (d) 2.0 (2.0) 0.0
Loss on issuance of investees' stock,
net (e) (0.1) 0.1 0.0
Other expense, net (f) (1.1) (4.2) (5.3)
------- ------- ------
Pretax Income 105.7 (6.0) 99.7
Provision for Income Taxes (g) (36.7) 6.0 (30.7)
TriZetto Equity Income, Net (b) 0.2 0.0 0.2
------- ------- ------
Net Income from continuing operations 69.2 0.0 69.2
Income from discontinued operations
- CTS (c) 0.0 0.0 0.0
------- ------ ------
Net Income $69.2 0.0 $69.2
Diluted EPS:
Income from continuing operations 0.29 0.00 0.29
Income from discontinued operations -
CTS (c) 0.00 0.00 0.00
------- ------- ------
Total Diluted EPS $0.29 0.00 $0.29
Shares Outstanding:
Weighted Average Diluted 241.8 0.0 241.8
End-of-Period Actual 239.5 0.0 239.5
The accompanying notes are an integral part of these financial
tables.
Table 4
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Three Months Ended September 30 2002
(unaudited, in millions except per share)
Adjusted
SEC Q3 Adjustments Q3
---------------------------
Revenue
Sales Management $187.0 $0.0 $187.0
Market Research 106.0 0.0 106.0
Other 13.0 0.0 13.0
--------- -------- -------
Total 306.0 0.0 306.0
Operating Expenses
Operating Costs (110.7) 0.0 (110.7)
Selling and Administrative (70.4) 0.0 (70.4)
Depreciation and Amortization (14.4) 0.0 (14.4)
--------- -------- -------
Total (195.5) 0.0 (195.5)
Operating Income 110.5 0.0 110.5
Interest expense, net (2.4) 0.0 (2.4)
Gains from investments, net (d) 1.2 (1.2) 0.0
Loss on issuance of investees' stock,
net (e) (0.5) 0.5 0.0
Other expense, net (f) (1.5) (3.4) (4.9)
-------- --------- -------
Pretax Income 107.3 (4.1) 103.2
Provision for Income Taxes (g) (33.2) 0.8 (32.4)
TriZetto Equity Loss, Net (b) (0.4) 0.0 (0.4)
-------- --------- -------
Net Income from continuing operations 73.6 (3.2) 70.4
Income from discontinued operations - CTS
(c) 8.6 (2.3) 6.3
-------- --------- -------
Net Income $82.3 (5.6) $76.7
Diluted EPS:
Income from continuing operations 0.26 (0.01) 0.25
Income from discontinued operations -
CTS (c) 0.03 (0.01) 0.02
-------- --------- -------
Total Diluted EPS $0.29 (0.02) $0.27
Shares Outstanding:
Weighted Average Diluted 283.3 0.0 283.3
End-of-Period Actual 281.4 0.0 281.4
The accompanying notes are an integral part of these financial
tables.
Table 5
IMS Health
SEC Income Statement (a)
Nine Months Ended September 30
(unaudited, in millions except per share)
2003 2002 % Fav
SEC SEC (Unfav)
-------------------------
Revenue
Sales Management $599.7 $546.2 10 %
Market Research 359.9 315.2 14
Other 38.0 38.3 (1)
--------- --------
Total 997.7 899.7 11
Operating Expenses
Operating Costs (406.3) (345.8) (17)
Selling and Administrative (252.8) (228.8) (10)
Depreciation and Amortization (55.0) (38.2) (44)
Severance, Impairment & other charges (h) (37.2) 0.0 NM
--------- --------
Total (751.3) (612.7) (23)
Operating Income 246.4 286.9 (14)
Interest expense, net (8.4) (5.9)
Gains from investments, net (d) 1.1 2.5
Loss on issuance of investees' stock, net (e) (0.4) (0.6)
Other expense, net (f) (21.8) (17.8)
--------- --------
Pretax Income 216.9 265.0 (18)
Provision for Income Taxes (g) (130.5) (82.7)
TriZetto Equity Loss, Net (b) (0.2) (0.7)
TriZetto impairment charge, net (i) (14.8) 0.0
--------- --------
Net Income from continuing operations 71.4 181.6 (61)
Income from discontinued operations - CTS (c) 2.8 21.9
Gain on discontinued operations - CTS (j) 495.1 0.0
--------- --------
Net Income $569.2 $203.4 180
Diluted EPS:
Income from continuing operations 0.29 0.63
Income from discontinued operations -
CTS (c) 0.01 0.08
Gain on discontinued operations -
CTS (j) 2.00 0.00
--------- --------
Total Diluted EPS $2.30 0.70 229 %
Shares Outstanding:
Weighted Average Diluted 247.9 288.6 14 %
End-of-Period Actual 239.5 281.4 15
The accompanying notes are an integral part of these financial
tables.
Table 6
IMS Health
Adjusted Income Statement (a)
Nine Months Ended September 30
(unaudited, in millions except per share)
2003 2002 % Fav Constant $
Adjusted Adjusted (Unfav) Growth
------------------------------------
Revenue
Sales Management $599.7 $546.2 10 % 3 %
Market Research 359.9 315.2 14 7
Other 38.0 38.3 (1) (4)
--------- ---------
Total 997.7 899.7 11 4
Operating Expenses
Operating Costs (406.3) (345.8) (17)
Selling and Administrative (252.8) (228.8) (10)
Depreciation and Amortization (55.0) (38.2) (44)
--------- ---------
Total (714.1) (612.7) (17)
Operating Income 283.6 286.9 (1) (7)
Interest expense, net (8.4) (5.9) (41)
Other expense, net (17.2) (10.9) (58)
--------- ---------
Pretax Income 258.0 270.1 (4)
Provision for Income Taxes (79.5) (84.8) 6
TriZetto Equity Loss, Net (b) (0.2) (0.7) 74
--------- ---------
Net Income from continuing
operations 178.4 184.6 (3)%
Income from discontinued
operations - CTS (c) 2.8 16.9 (84)
--------- ---------
Net Income $181.2 $201.5 (10)%
Diluted EPS:
Income from continuing
operations 0.72 0.64 13
Income from discontinued
operations - CTS (c) 0.01 0.06 (83)
--------- ---------
Total Diluted EPS $0.73 $0.70 4 %
Shares Outstanding:
Weighted Average Diluted 247.9 288.6 14 %
End-of-Period Actual 239.5 281.4 15
The accompanying notes are an integral part of these financial
tables
Table 7
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Nine Months Ended September 30 2003
(unaudited, in millions except per share)
Adjusted
SEC Q3 YTD Adjustments Q3 YTD
------------------------------
Revenue
Sales Management $599.7 $0.0 $599.7
Market Research 359.9 0.0 359.9
Other 38.0 0.0 38.0
--------- --------- --------
Total 997.7 0.0 997.7
Operating Expenses
Operating Costs (406.3) 0.0 (406.3)
Selling and Administrative (252.8) 0.0 (252.8)
Depreciation and Amortization (55.0) 0.0 (55.0)
Severance, impairment & other
charges (h) (37.2) 37.2 0.0
--------- --------- --------
Total (751.3) 37.2 (714.1)
Operating Income 246.4 37.2 283.6
Interest expense, net (8.4) 0.0 (8.4)
Gains from investments, net (d) 1.1 (1.1) 0.0
Loss on issuance of investees' stock,
net (e) (0.4) 0.4 0.0
Other expense, net (f) (21.8) 4.6 (17.2)
--------- --------- --------
Pretax Income 216.9 41.1 258.0
Provision for Income Taxes (g) (130.5) 51.0 (79.5)
TriZetto Equity Loss, Net (b) (0.2) 0.0 (0.2)
TriZetto impairment charge, net (i) (14.8) 14.8 0.0
--------- --------- --------
Net Income from continuing operations 71.4 107.0 178.4
Income from discontinued operations -
CTS (c) 2.8 0.0 2.8
Gain on discontinued operations - CTS (j) 495.1 (495.1) 0.0
--------- --------- --------
Net Income $569.2 (388.1) $181.2
Diluted EPS:
Income from continuing operations 0.29 0.43 0.72
Income from discontinued operations
- CTS (c) 0.01 0.00 0.01
Gain on discontinued operations
- CTS (j) 2.00 (2.00) 0.00
--------- --------- --------
Total Diluted EPS $2.30 (1.57) $0.73
Shares Outstanding:
Weighted Average Diluted 247.9 0.0 247.9
End-of-Period Actual 239.5 0.0 239.5
The accompanying notes are an integral part of these financial
tables.
Table 8
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Nine Months Ended September 30 2002
(unaudited, in millions except per share)
Adjusted
SEC Q3 Adjustments Q3
---------------------------
Revenue
Sales Management $546.2 $0.0 $546.2
Market Research 315.2 0.0 315.2
Other 38.3 0.0 38.3
-------- --------- --------
Total 899.7 0.0 899.7
Operating Expenses
Operating Costs (345.8) 0.0 (345.8)
Selling and Administrative (228.8) 0.0 (228.8)
Depreciation and Amortization (38.2) 0.0 (38.2)
-------- --------- --------
Total (612.7) 0.0 (612.7)
Operating Income 286.9 0.0 286.9
Interest expense, net (5.9) 0.0 (5.9)
Gains from investments, net (d) 2.5 (2.5) 0.0
Loss on issuance of investees' stock,
net (e) (0.6) 0.6 0.0
Other expense, net (f) (17.8) 6.9 (10.9)
-------- ---------- -------
Pretax Income 265.0 5.1 270.1
Provision for Income Taxes (g) (82.7) (2.1) (84.8)
TriZetto Equity Loss, Net (b) (0.7) 0.0 (0.7)
-------- ---------- -------
Net Income from continuing operations 181.6 3.0 184.6
Income from discontinued operations -
CTS (c) 21.9 (4.9) 16.9
-------- ---------- -------
Net Income $203.4 (2.0) $201.5
Diluted EPS:
Income from continuing operations 0.63 0.01 0.64
Income from discontinued operations -
CTS (c) 0.08 (0.02) 0.06
-------- ---------- -------
Total Diluted EPS $0.70 0.00 $0.70
Shares Outstanding:
Weighted Average Diluted 288.6 0.0 288.6
End-of-Period Actual 281.4 0.0 281.4
The accompanying notes are an integral part of these financial
tables.
Table 9
IMS Health
Selected Consolidated Balance Sheet Items
(unaudited, in millions)
Sept. 30, 2003 Dec. 31, 2002
-------------- -------------
Cash and cash equivalents $307.4 $289.3
Short-term marketable securities 34.3 0.0
Accounts receivable, net 227.1 215.9
Short-term debt 185.5 204.8
Long-term debt 342.8 325.0
The December 31, 2002 balance sheet has been restated to present
CTS on a discontinued operations basis, consistent with the September
30, 2003 presentation. Cash and cash equivalents and accounts
receivable, net exclude CTS amounts in all periods.
The accompanying notes are an integral part of these financial
tables.
IMS Health
NOTES TO FINANCIAL TABLES
(a) "Adjusted Income Statements" (Tables 2 and 6) differ from the
"SEC Income Statements" (Tables 1 and 5) by amounts that are
detailed on Tables 3, 4, 7 and 8. Adjusted results generally
exclude from corresponding U.S. GAAP measures items that are
not related to the core business of IMS (such as gains/losses
on non-core transactions, gains/losses on issuance of
investees' stock, a tax provision related to D&B legacy and
related subsequent tax transactions, etc.) and from time to
time also have excluded items that are related to the core
business of IMS but have been identified specifically by IMS
management to have arisen from special historical
circumstances that management does not expect to be relevant
to the core business going forward (such as special
restructuring, severance, impairment and other charges),
together with the tax effect of these items. Management uses
these adjusted results to evaluate its financial results for
business decision-making, to develop budgets and to manage
expenditures with respect to its core business. Management
believes that the adjusted results are useful to investors as
a supplement to historical U.S. GAAP information because they
facilitate comparisons across periods, more clearly indicate
trends and add insight into the Company's performance by
focusing on the results generated by the Company's core
operations. The method IMS uses to prepare adjusted results
differs in significant respects from U.S. GAAP and is likely
to differ from the methods used by other companies. Adjusted
results should not be regarded as a replacement for
corresponding U.S. GAAP measures, which provide more
comprehensive information about the financial results of IMS.
Investors are urged to review the detailed reconciliations of
the adjusted measures to the comparable U.S. GAAP results.
(b) TriZetto Equity Income in the third quarter of 2003 is based
on preliminary information provided by TriZetto and includes
IMS's share of TriZetto results as well as purchase accounting
amortization expenses.
(c) IMS divested its equity interest in CTS on February 6, 2003
via a split-off transaction. Income from discontinued
operations includes IMS's share of CTS income on an after-tax
basis for the portion of the first quarter of 2003 prior to
the split-off, and for the entire first three quarters of
2002. Previously CTS had been consolidated into the IMS Health
financial statements.
(d) Gains from investments, net were $2.0 million in the third
quarter of 2003, relating primarily to gains from the sale of
Evolving Systems, net of fees for the Enterprise investments,
compared with a gain of $1.2 million in the third quarter of
2002. Gains from investments, net were $1.1 million in the
first nine months of 2003 compared to a gain of $2.5 million
in the first nine months of 2002. These gains are excluded
from adjusted results because they relate to non-strategic
investments and are not related to IMS's core business
operations.
(e) Loss on issuance of investees' stock, net was $0.1 million in
the third quarter of 2003 compared with a loss of $0.5 million
in the third quarter of 2002. Loss on issuance of investees'
stock, net was $0.4 million for the first nine months of 2003
compared to a loss of $0.6 million in the first nine months of
2002. These SAB 51 losses relate to the exercise of stock
options by TriZetto employees and Trizetto share repurchases.
They are excluded from adjusted results because they are not
related to IMS's core business operations.
(f) Other expense, net includes $0.4 million of expenses for legal
fees in the third quarter of 2003 and zero in the third
quarter of 2002, related to the IRI litigation. In the first
nine months of 2003 IRI litigation fees were ($1.4) million
compared with $0.8 million in the first nine months of 2002.
These expenses are excluded from adjusted results because they
relate to a D&B legacy matter and are not related to IMS's
core business operations. In addition, Other expense, net
excludes a quarterly phasing adjustment of foreign currency
hedge gains (losses), net of ($4.6) million in the third
quarter of 2003 and ($3.4) million in the third quarter of
2002. In the first nine months of 2003 the phasing adjustment
was $6.0 million compared with $6.1 million in the first nine
months of 2002. This phasing adjustment is made to adjusted
results in order to more closely match the timing of foreign
exchange hedge gains (losses) with the operating income being
hedged. This phasing adjustment is zero at the end of the
year, and the full amount of the foreign exchange hedge gains
(losses) are reflected in both the U.S. GAAP and adjusted
results on a full-year basis.
(g) The tax provision for the third quarter of 2003 includes a tax
provision of $2.1 million related to the items described in
notes (d), (e) and (f). The tax provision in the first nine
months of 2003 includes a tax benefit of $1.4 million relating
to items described in notes (d), (e) and (f), and a tax
benefit of $13.2 million related to the Severance, impairments
and other charges described in note (h). These tax benefits
are excluded from adjusted results because the related charges
are excluded from adjusted results. In addition, the third
quarter 2003 adjusted tax provision includes a phasing
adjustment of $3.9 million; the phasing adjustment for the
first nine months of 2003 was ($4.0) million. These relate to
a Q1 tax benefit that is being recognized ratably in adjusted
results throughout the full year. This phasing adjustment
allows the full-year effective tax rate to be applied in each
quarter to adjusted pretax results. The tax provision for the
first nine months of 2003 also includes an accrual of $69.6
million related to a D&B legacy tax transaction and subsequent
related transactions. This tax provision is excluded from
adjusted results because it relates to legacy tax transactions
and is not related to IMS's core business operations.
(h) IMS incurred $37.2 million of expense in the first nine months
of 2003 for severance, impairment and other charges, including
severance for approximately 80 employees, contract
cancellations and impairments, idle real estate facilities and
software writedowns. These amounts are excluded from adjusted
results because they represent costs that are not related to
IMS's core operations on an on-going basis.
(i) The TriZetto Impairment Charge, Net recorded in the first
quarter of 2003 reduced the book value per share of IMS's
investment in TriZetto shares ($6.14 per share) down to the
March 31, 2003 market value per share ($4.13). This charge is
excluded from adjusted results because it relates to a
non-strategic investment and is not related to IMS's core
business operations.
(j) The split-off of CTS described in Note (c) generated a net
gain of $495.1 million in the first quarter of 2003. This gain
is calculated as the proceeds from the split-off less the book
value of IMS's investment in CTS and transaction costs. No tax
provision is provided as the split-off is expected to be a
tax-free transaction. This gain is excluded from adjusted
results as it relates to the divestiture of the business and
is not related to IMS's ongoing core business operations.
Amounts presented in the financial tables may not add due to
rounding.
These financial tables should be read in conjunction with IMS
Health's filings previously made or to be made with the Securities and
Exchange Commission.
CONTACT: IMS Health
(Communications)
Michael Gury, 203/319-4730
or (Investor Relations)
Darcie Peck, 203/319-4766