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
October
29, 2015
Date
of Report (Date of earliest event reported)
IMS Health Holdings, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
001-36381
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27-1335689
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(State or other
jurisdiction
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(Commission File
Number)
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(I.R.S. Employer
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of incorporation)
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|
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Identification No.)
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83 Wooster Heights Road
Danbury, CT 06810
(Address
of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (203)
448-4600
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:
⃞
|
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|
⃞
|
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|
⃞
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
|
⃞
|
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 October 29, 2015, IMS Health Holdings, Inc. (the “Company”) issued a
press release regarding financial results for the third quarter ended
September 30, 2015. A copy of this press release is being furnished as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by
reference into this Item 2.02.
In accordance with General Instruction B.2 of Form 8-K, the information
in this Current Report on Form 8-K, including Exhibit 99.1, shall not be
deemed “filed” for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No.
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|
Description
|
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99.1
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Press Release dated October 29, 2015 issued by IMS Health
Holdings, Inc.
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SIGNATURE
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.
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IMS HEALTH HOLDINGS, INC.
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By:
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/s/ Ronald E. Bruehlman
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Name:
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Ronald E. Bruehlman
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Title:
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Senior Vice President &
Chief Financial Officer
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Dated: October 29, 2015
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EXHIBIT INDEX
Exhibit No.
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|
Description
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99.1
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|
Press Release dated October 29, 2015 issued by IMS Health
Holdings, Inc.
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Exhibit 99.1
IMS
Health Reports Third-Quarter 2015 Results
-
Revenue
up 23 percent at constant currency
-
Adjusted
EBITDA up 8.6 percent at constant currency
-
Adjusted
Net Income up 10.6 percent at constant currency
-
Adjusted
Diluted Earnings per Share: $0.38
-
Guidance
reaffirmed for Revenue and at upper end of Adjusted Net Income and
Diluted EPS ranges
DANBURY, Conn.--(BUSINESS WIRE)--October 29, 2015--IMS Health Holdings,
Inc. (“IMS Health”) (NYSE:IMS), a leading global provider of information
and technology services to the healthcare and life sciences industries,
today announced results for the quarter ended September 30, 2015.
Third-Quarter 2015 Operating Results
Revenue for the third quarter of $735 million was up 23.0 percent on a
constant currency basis and 12.0 percent on a reported basis compared
with the third quarter of 2014. Excluding the impact of Cegedim’s CRM
and Strategic Data businesses (“the Cegedim Acquisition”), revenue was
up 4.1 percent on a constant currency basis and down 4.4 percent on a
reported basis, with the difference entirely due to the year-over-year
strengthening of the U.S. dollar versus key currencies in which the
company transacts business.
The company’s revenue growth in the third quarter included a 42.4
percent increase in technology services revenue on a constant currency
basis, up 31.9 percent on a reported basis, versus the same period last
year. Information offerings revenue was up 8.9 percent on a constant
currency basis and down 2.3 percent reported. Emerging markets revenue
increased 30.5 percent in the third quarter on a constant currency basis
and 11.2 percent on a reported basis. Developed markets revenue grew
21.5 percent on a constant currency basis and 12.2 percent reported.
Excluding the Cegedim Acquisition, technology services revenue increased
10.1 percent at constant currency and 3.6 percent reported. Information
offerings revenue was flat on a constant currency basis and declined
10.1 percent on a reported basis.
Adjusted EBITDA of $218 million improved 8.6 percent at constant
currency and decreased 1.5 percent reported compared with the third
quarter of 2014.
“We had another quarter of strong financial and operating performance;
this marks our 19th consecutive quarter of revenue and Adjusted EBITDA
growth at constant currency,” said Ari Bousbib, chairman and CEO, IMS
Health. “We are making excellent progress integrating the Cegedim
acquisition and are especially pleased with the traction that the NexxusTM
Suite of applications and the newly integrated Mobile Intelligence CRM
platform are gaining in the marketplace, as well as the continued strong
growth in our Real-World Evidence offerings.”
Third-quarter 2015 net income was $43 million compared with $47 million
in last year’s third quarter. Adjusted Net Income for the third quarter
was $129 million, up 10.6 percent on a constant currency basis and 3.0
percent on a reported basis.
Diluted earnings per share was $0.13 in the third quarter, compared with
$0.14 per share in the third quarter of 2014.
Adjusted Diluted Earnings per Share increased 12.6 percent at constant
currency and 4.9 percent on a reported basis to $0.38 in the third
quarter.
Year-to-date 2015 Operating Results
Revenue for the nine months ended September 30, 2015 of $2,109 million
increased 18.3 percent on a constant currency basis and 7.4 percent
reported, compared with the first nine months of 2014. Excluding the
impact of the Cegedim Acquisition, revenue for the nine months ended
September 30, 2015 was up 5.4 percent on a constant currency basis and
down 3.7 percent on a reported basis. Adjusted EBITDA of $654 million
increased 9.3 percent at constant currency and declined 1.5 percent
reported, compared with the first nine months of 2014. Net income for
the nine months ended September 30, 2015 was $388 million, compared with
a net loss of $197 million in the prior-year period, which included
one-time IPO-related charges. Adjusted Net Income was $390 million, up
29.5 percent at constant currency and 18.6 percent reported, from the
prior-year period. Diluted Earnings per Share was $1.14 in the first
nine months of 2015, compared with a loss of $0.63 per share in the
prior-year period. Adjusted Diluted Earnings per Share increased 22.9
percent on a constant currency basis and 12.6 percent on a reported
basis to $1.15 in the first nine months, compared with $1.02 in the
prior-year period.
Financial Position
As of September 30, 2015, cash and cash equivalents were $394 million
and the principal amount of debt was $4,296 million, resulting in net
debt of $3,902 million. At the end of the third quarter of 2015, IMS
Health’s Gross Leverage Ratio was 5.0 times trailing 12 month Adjusted
EBITDA, compared with 4.3 times at December 31, 2014.
Cash Flow
Net cash provided by operating activities was $111 million in the third
quarter and capital expenditures and additions to deferred software were
$38 million. Unlevered Free Cash Flow for the third quarter was $141
million, or 65 percent of Adjusted EBITDA.
2015 Full-Year Guidance
IMS Health expects constant currency results for 2015 as follows:
Revenue growth of 19 to 20 percent, Adjusted EBITDA growth of
approximately 11 percent, Adjusted Net Income growth of 22 to 23 percent
and Adjusted Diluted Earnings per Share growth of 17 to 18 percent.
Assuming current foreign exchange rates hold constant through the end of
the year, IMS Health expects reported revenue growth of approximately 10
percent, Adjusted EBITDA growth of approximately 1 percent, Adjusted Net
Income growth of 10 to 11 percent and Adjusted Diluted Earnings per
Share growth of 5 to 6 percent.
Constant Currency
IMS Health reports results in U.S. dollars, but does business on a
global basis. Exchange rate fluctuations affect the U.S. dollar value of
foreign currency revenue and expenses and may have a significant effect
on reported results. The discussion of IMS Health’s financial results in
this release includes comparisons with the prior year in constant
currency terms, using consistent exchange rates. Management believes
this information facilitates comparison of underlying results over time.
Non-GAAP Measures
This release presents certain “non-GAAP Measures” and other statistical
measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted
Diluted Earnings per Share, Gross Leverage Ratio and Unlevered Free Cash
Flow, because management believes these measures provide additional
information regarding the company’s performance and its ability to
service debt. In addition, management believes that these measures are
useful to assess the company’s operating performance trends because they
exclude certain material non-cash items, unusual or non-recurring items
that are not expected to continue in the future, and certain other
items. The non-GAAP Measures are not presented in accordance with U.S.
GAAP, and IMS Health’s computation of these non-GAAP Measures may vary
from those used by other companies. These measures have limitations as
an analytical tool, and should not be considered in isolation or as a
substitute or alternative to net income or loss, operating income or
loss, cash flows from operating activities, total indebtedness or any
other measures of operating performance, liquidity or indebtedness
derived in accordance with GAAP. Reconciliations of these non-GAAP
Measures to the most directly comparable GAAP Measures and related notes
are presented at the end of this release.
The non-GAAP Measures used in our full-year guidance will differ from
U.S. GAAP net income, earnings per share and net cash used in operating
activities, respectively, in ways similar to those described in the
reconciliations at the end of this press release.
Conference Call and Webcast
IMS Health’s management team will host a conference call and webcast to
discuss the company’s third-quarter 2015 results at 9:00 a.m. Eastern
Time on Thursday, October 29, 2015. The audio and slide presentation for
the call can be accessed live by webcast on IMS Health’s Investor
Relations website at http://ir.imshealth.com. The discussion also
will be available by dialing +1-800-926-9175 in the U.S. and Canada, or
+1-212-231-2920 for international callers. A replay of the webcast will
be available on the company’s Investor Relations site at http://ir.imshealth.com
following the live call.
Forward-looking Statements
Reported numbers are preliminary and not final until the filing of IMS
Health’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2015 with the Securities and Exchange Commission and, therefore,
remain subject to adjustment. This press release includes
“forward-looking statements” including statements regarding future
financial and operating results, especially those set forth under the
heading “Full-Year Guidance.” The words “guidance,” “ongoing,”
“believes,” “expects,” “may,” “will” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Forward-looking statements are not guarantees that the future results,
plans, intentions or expectations expressed or implied will be achieved.
Matters subject to forward-looking statements involve known and unknown
risks and uncertainties, including regulatory, competitive and other
factors, which may cause actual financial or operating results or the
timing of events to be materially different than those expressed or
implied by forward-looking statements. Important factors that could
cause or contribute to such differences include, but are not limited to:
imposition of restrictions on our use of data by data suppliers or their
refusal to license data to us; failure to meet our productivity
objectives; failure to successfully invest in growth opportunities;
imposition of restrictions on our current and future activities under
data protection and privacy laws; breaches or misuse of our or our
outsourcing partners’ security or communications systems; hardware and
software failures, delays in the operation of our computer and
communications systems or the failure to implement system enhancements;
consolidation in the industries in which our clients operate; our
ability to protect our intellectual property rights and our
susceptibility to claims by others that we are infringing on their
intellectual property rights; 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; general economic conditions in the markets in which we operate,
including financial market conditions; our ability to successfully
integrate Cegedim’s Customer Relationship Management and Strategic Data
businesses, and the other factors set forth in the “Risk Factors”
section of our Annual Report on Form 10-K for the year ended December
31, 2014 on file with the SEC and any subsequent SEC filings. We
undertake no obligation to publicly update any forward-looking
statements whether as a result of new information, future developments
or otherwise.
About IMS Health
IMS Health is a leading global information and technology services
company providing clients in the healthcare industry with end-to-end
solutions to measure and improve their performance. Our 7,500 services
experts connect configurable SaaS applications to 10+ petabytes of
complex healthcare data in the IMS One™ cloud platform,
delivering unique insights into diseases, treatments, costs and
outcomes. The company’s 15,000 employees blend global consistency and
local market knowledge across 100 countries to help clients run their
operations more efficiently. Customers include pharmaceutical, consumer
health and medical device manufacturers and distributors, providers,
payers, government agencies, policymakers, researchers and the financial
community.
As a global leader in protecting individual patient privacy, IMS Health
uses anonymous healthcare data to deliver critical, real-world disease
and treatment insights. These insights help biotech and pharmaceutical
companies, medical researchers, government agencies, payers and other
healthcare stakeholders to identify unmet treatment needs and understand
the effectiveness and value of pharmaceutical products in improving
overall health outcomes. Additional information is available at www.imshealth.com.
IMSFIN
Table 1
IMS Health Holdings, Inc.
Income Statement
(Preliminary and unaudited)
|
|
|
|
|
|
|
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Three Months Ended
|
|
|
Nine Months Ended
|
|
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September 30,
|
|
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September 30,
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|
(in millions, except per share data)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
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|
Revenue
|
|
$
|
735
|
|
|
$
|
656
|
|
|
$
|
2,109
|
|
|
$
|
1,963
|
|
Information
|
|
|
373
|
|
|
|
382
|
|
|
|
1,101
|
|
|
|
1,149
|
|
Technology services
|
|
|
362
|
|
|
|
274
|
|
|
|
1,008
|
|
|
|
814
|
|
Operating costs of information, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
167
|
|
|
|
164
|
|
|
|
493
|
|
|
|
502
|
|
Direct and incremental costs of technology services,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exclusive of depreciation and amortization
|
|
|
195
|
|
|
|
147
|
|
|
|
528
|
|
|
|
423
|
|
Selling and administrative expenses, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
181
|
|
|
|
139
|
|
|
|
498
|
|
|
|
557
|
|
Depreciation and amortization
|
|
|
87
|
|
|
|
109
|
|
|
|
264
|
|
|
|
331
|
|
Severance, impairment and other charges
|
|
|
16
|
|
|
|
4
|
|
|
|
50
|
|
|
|
29
|
|
Operating Income
|
|
|
89
|
|
|
|
93
|
|
|
|
276
|
|
|
|
121
|
|
Interest income
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
Interest expense
|
|
|
(44
|
)
|
|
|
(43
|
)
|
|
|
(124
|
)
|
|
|
(181
|
)
|
Other income (loss), net
|
|
|
6
|
|
|
|
7
|
|
|
|
16
|
|
|
|
(281
|
)
|
Non-Operating Loss, Net
|
|
|
(38
|
)
|
|
|
(35
|
)
|
|
|
(107
|
)
|
|
|
(459
|
)
|
Income (loss) before income taxes
|
|
|
51
|
|
|
|
58
|
|
|
|
169
|
|
|
|
(338
|
)
|
(Provision for) benefit from income taxes
|
|
|
(8
|
)
|
|
|
(11
|
)
|
|
|
219
|
|
|
|
141
|
|
Net Income (Loss)
|
|
$
|
43
|
|
|
$
|
47
|
|
|
$
|
388
|
|
|
$
|
(197
|
)
|
Earnings (Loss) per Share Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.13
|
|
|
$
|
0.14
|
|
|
$
|
1.17
|
|
|
$
|
(0.63
|
)
|
Diluted
|
|
$
|
0.13
|
|
|
$
|
0.14
|
|
|
$
|
1.14
|
|
|
$
|
(0.63
|
)
|
Weighted-Average Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
328.5
|
|
|
|
332.1
|
|
|
|
331.9
|
|
|
|
314.1
|
|
Diluted
|
|
|
336.1
|
|
|
|
342.3
|
|
|
|
340.4
|
|
|
|
314.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2
IMS Health Holdings, Inc.
Condensed Balance Sheet
(Preliminary and unaudited)
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|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
(in millions)
|
|
2015
|
|
|
2014
|
Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
394
|
|
|
$
|
390
|
Restricted cash
|
|
|
22
|
|
|
|
24
|
Accounts receivable, net
|
|
|
449
|
|
|
|
330
|
Property, plant and equipment, net
|
|
|
169
|
|
|
|
153
|
Computer software, net
|
|
|
292
|
|
|
|
258
|
Goodwill & other identifiable intangibles, net
|
|
|
5,828
|
|
|
|
5,559
|
Other current & long-term assets
|
|
|
502
|
|
|
|
436
|
Total Assets
|
|
$
|
7,656
|
|
|
$
|
7,150
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity:
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Accounts payable, accrued & other current liabilities, &
|
|
|
|
|
|
|
|
deferred revenues
|
|
$
|
924
|
|
|
$
|
735
|
Postretirement and postemployment benefits
|
|
|
111
|
|
|
|
95
|
Long-term deferred tax and other liabilities
|
|
|
757
|
|
|
|
985
|
Debt
|
|
|
4,275
|
|
|
|
3,793
|
Total Liabilities
|
|
|
6,067
|
|
|
|
5,608
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
|
|
1,589
|
|
|
|
1,542
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
|
7,656
|
|
|
$
|
7,150
|
|
|
|
|
|
|
|
|
Table 3
IMS Health Holdings, Inc.
Condensed Statement of Cash Flows
(Preliminary and unaudited)
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
(in millions)
|
|
2015
|
|
|
2014
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
388
|
|
|
$
|
(197
|
)
|
Adjustments to Reconcile Net Income (Loss) to Net Cash
|
|
|
|
|
|
|
|
|
Provided by (Used in) Operating Activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
264
|
|
|
|
331
|
|
Deferred income taxes
|
|
|
(286
|
)
|
|
|
(197
|
)
|
Non-cash stock-based compensation charges
|
|
|
19
|
|
|
|
52
|
|
Loss on Venezuela remeasurement
|
|
|
7
|
|
|
|
49
|
|
Other
|
|
|
(25
|
)
|
|
|
101
|
|
Change in assets and liabilities, excluding effects from
|
|
|
|
|
|
|
|
|
acquisitions and dispositions:
|
|
|
|
|
|
|
|
|
Changes in current assets and liabilities
|
|
|
(35
|
)
|
|
|
(137
|
)
|
Changes in long-term assets and liabilities
|
|
|
(6
|
)
|
|
|
(39
|
)
|
Net Cash Provided by (Used in) Operating Activities
|
|
|
326
|
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(29
|
)
|
|
|
(59
|
)
|
Additions to computer software
|
|
|
(87
|
)
|
|
|
(70
|
)
|
Payments for acquisitions of businesses, net of cash acquired
|
|
|
(466
|
)
|
|
|
(58
|
)
|
Other
|
|
|
—
|
|
|
|
(20
|
)
|
Net Cash Used in Investing Activities
|
|
|
(582
|
)
|
|
|
(207
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from initial public offering, net of costs
|
|
|
—
|
|
|
|
987
|
|
Other financing activities
|
|
|
283
|
|
|
|
(1,052
|
)
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
283
|
|
|
|
(65
|
)
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
(23
|
)
|
|
|
(62
|
)
|
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
4
|
|
|
|
(371
|
)
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
390
|
|
|
|
725
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
394
|
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
Table 4
IMS Health Holdings, Inc.
Net Income (Loss) to Adjusted EBITDA Reconciliation
(Preliminary and unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
(in millions)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income (Loss)
|
|
$
|
43
|
|
|
$
|
47
|
|
|
$
|
388
|
|
|
$
|
(197
|
)
|
Provision for (benefit from) income taxes
|
|
|
8
|
|
|
|
11
|
|
|
|
(219
|
)
|
|
|
(141
|
)
|
Other (income) loss, net
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
(16
|
)
|
|
|
281
|
|
Interest expense
|
|
|
44
|
|
|
|
43
|
|
|
|
124
|
|
|
|
181
|
|
Interest income
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
Depreciation and amortization
|
|
|
87
|
|
|
|
109
|
|
|
|
264
|
|
|
|
331
|
|
Deferred revenue purchase accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments
|
|
|
3
|
|
|
|
1
|
|
|
|
6
|
|
|
|
3
|
|
Stock-based compensation related charges(1)
|
|
|
7
|
|
|
|
6
|
|
|
|
21
|
|
|
|
52
|
|
Restructuring and related charges(2)
|
|
|
18
|
|
|
|
5
|
|
|
|
53
|
|
|
|
34
|
|
Acquisition-related charges(3)
|
|
|
14
|
|
|
|
7
|
|
|
|
33
|
|
|
|
19
|
|
Sponsor monitoring termination / fees(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom stock compensation(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Adjusted EBITDA
|
|
$
|
218
|
|
|
$
|
221
|
|
|
$
|
654
|
|
|
$
|
664
|
|
Depreciation and amortization
|
|
|
(34
|
)
|
|
|
(32
|
)
|
|
|
(103
|
)
|
|
|
(94
|
)
|
Interest expense, net
|
|
|
(44
|
)
|
|
|
(42
|
)
|
|
|
(123
|
)
|
|
|
(178
|
)
|
Royalty hedge gains
|
|
|
7
|
|
|
|
1
|
|
|
|
20
|
|
|
|
1
|
|
Cash tax payments, net of refunds
|
|
|
(18
|
)
|
|
|
(23
|
)
|
|
|
(58
|
)
|
|
|
(64
|
)
|
Adjusted Net Income
|
|
$
|
129
|
|
|
$
|
125
|
|
|
$
|
390
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Stock-based compensation related charges are included in Operating
costs of information, Direct and incremental costs of technology
services and Selling and administrative expenses as follows:
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
September 30,
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating costs of information
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
6
|
Direct and incremental costs of technology services
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
5
|
Selling and administrative expenses
|
|
|
5
|
|
|
|
4
|
|
|
|
17
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Restructuring and related charges includes severance and impairment
charges and the cost of employee and third-party charges related to
dual running costs for knowledge transfer activities. Dual running
costs for knowledge transfer activities of $1 million and $2 million
for the three and nine months ended September 30, 2015 and $2
million and $4 million for the three and nine months ended September
30, 2014, respectively, are primarily included in Operating costs of
information.
|
|
|
|
(3)
|
|
Acquisition-related charges and Sponsor monitoring fees are included
in Selling and administrative expenses.
|
|
|
|
(4)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the nine months ended September 30, 2014 are
included in Operating costs of information and Selling and
administrative expenses, respectively.
|
Table 5
IMS Health Holdings, Inc.
Net Income (Loss) to Adjusted Net Income Reconciliation
(Preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
(in millions, except per share data)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net Income (Loss)
|
|
$
|
43
|
|
|
$
|
47
|
|
|
$
|
388
|
|
|
$
|
(197
|
)
|
Provision for (benefit from) income taxes
|
|
|
8
|
|
|
|
11
|
|
|
|
(219
|
)
|
|
|
(141
|
)
|
Amortization associated with purchase accounting
|
|
|
53
|
|
|
|
77
|
|
|
|
161
|
|
|
|
230
|
|
Deferred revenue purchasing accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments
|
|
|
3
|
|
|
|
1
|
|
|
|
6
|
|
|
|
3
|
|
Stock-based compensation related charges(1)
|
|
|
7
|
|
|
|
6
|
|
|
|
21
|
|
|
|
52
|
|
Restructuring and related charges(2)
|
|
|
18
|
|
|
|
5
|
|
|
|
53
|
|
|
|
41
|
|
Acquisition-related charges(3)
|
|
|
14
|
|
|
|
7
|
|
|
|
33
|
|
|
|
19
|
|
Sponsor monitoring termination / fees(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom stock compensation(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Other (income) loss, net
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
(16
|
)
|
|
|
281
|
|
Adjusted Pre Tax Income
|
|
$
|
140
|
|
|
$
|
147
|
|
|
$
|
428
|
|
|
$
|
392
|
|
Royalty hedge gains
|
|
|
7
|
|
|
|
1
|
|
|
|
20
|
|
|
|
1
|
|
Cash tax payments, net of refunds
|
|
|
(18
|
)
|
|
|
(23
|
)
|
|
|
(58
|
)
|
|
|
(64
|
)
|
Adjusted Net Income
|
|
$
|
129
|
|
|
$
|
125
|
|
|
$
|
390
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Share Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.39
|
|
|
$
|
0.38
|
|
|
$
|
1.18
|
|
|
$
|
1.05
|
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
1.15
|
|
|
$
|
1.02
|
|
Weighted-Average Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
328.5
|
|
|
|
332.1
|
|
|
|
331.9
|
|
|
|
314.1
|
|
Diluted
|
|
|
336.1
|
|
|
|
342.3
|
|
|
|
340.4
|
|
|
|
323.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Stock-based compensation related charges are included in Operating
costs of information, Direct and incremental costs of technology
services and Selling and administrative expenses as follows:
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
September 30,
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating costs of information
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
6
|
Direct and incremental costs of technology services
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
5
|
Selling and administrative expenses
|
|
|
5
|
|
|
|
4
|
|
|
|
17
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Restructuring and related charges includes severance and impairment
charges and the cost of employee and third-party charges related to
dual running costs for knowledge transfer activities. Dual running
costs for knowledge transfer activities of $1 million and $2 million
for the three and nine months ended September 30, 2015 and $2
million and $4 million for the three and nine months ended September
30, 2014, respectively, are primarily included in Operating costs of
information. Nine months ended September 30, 2014 includes
accelerated depreciation and amortization of $7 million related to a
real estate transaction in the three months ended June 30, 2014.
|
|
|
|
(3)
|
|
Acquisition-related charges and Sponsor monitoring fees are included
in Selling and administrative expenses.
|
|
|
|
(4)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the nine months ended September 30, 2014 are
included in Operating costs of information and Selling and
administrative expenses, respectively.
|
Table 6
IMS Health Holdings, Inc.
Net Cash Provided by (Used in) Operating Activities
to Unlevered Free Cash Flow
(Preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net Cash Provided by (Used in) Operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activities
|
|
$
|
111
|
|
|
$
|
191
|
|
|
$
|
326
|
|
|
$
|
(37
|
)
|
Capital expenditures
|
|
|
(4
|
)
|
|
|
(14
|
)
|
|
|
(29
|
)
|
|
|
(59
|
)
|
Additions to computer software
|
|
|
(34
|
)
|
|
|
(26
|
)
|
|
|
(87
|
)
|
|
|
(70
|
)
|
Free Cash Flow
|
|
$
|
73
|
|
|
$
|
151
|
|
|
$
|
210
|
|
|
$
|
(166
|
)
|
Cash interest payments
|
|
|
31
|
|
|
|
26
|
|
|
|
106
|
|
|
|
196
|
|
Cash tax payments, net of refunds
|
|
|
18
|
|
|
|
23
|
|
|
|
58
|
|
|
|
64
|
|
Acquisition-related charges(1)
|
|
|
14
|
|
|
|
7
|
|
|
|
33
|
|
|
|
19
|
|
Sponsor monitoring termination / fees(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom stock compensation(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Debt extinguishment make-whole payments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
151
|
|
Severance, transaction & other payments
|
|
|
12
|
|
|
|
8
|
|
|
|
29
|
|
|
|
19
|
|
FX hedge (receipts) payments
|
|
|
(7
|
)
|
|
|
1
|
|
|
|
(20
|
)
|
|
|
7
|
|
Unlevered Free Cash Flow
|
|
$
|
141
|
|
|
$
|
216
|
|
|
$
|
417
|
|
|
$
|
394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Acquisition-related charges and Sponsor monitoring fees are included
in Selling and administrative expenses.
|
|
|
|
(2)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the nine months ended September 30, 2014 are
included in Operating costs of information and Selling and
administrative expenses, respectively.
|
Table 7
IMS Health Holdings, Inc.
Calculation of Gross Leverage Ratio
as of September 30, 2015
(Preliminary and unaudited)
|
|
|
|
(in millions)
|
|
|
Gross Debt as of September 30, 2015
|
|
$
|
4,296
|
|
Adjusted EBITDA for the year ended December 31, 2014
|
|
|
878
|
|
Less: Adjusted EBITDA for the nine months ended September 30, 2014
|
|
|
(664
|
)
|
Add: Adjusted EBITDA for the nine months ended September 30, 2015
|
|
|
654
|
|
Adjusted EBITDA for the twelve months ended September 30, 2015
|
|
$
|
868
|
|
Gross Leverage Ratio (Gross Debt/LTM Adjusted EBITDA)
|
|
|
5.0x
|
|
|
|
|
|
|
Table 8
IMS Health Holdings, Inc.
Non-GAAP Adjustments
By Income Statement Line Items
(Preliminary and Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
(in millions)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Non-GAAP adjustments included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs of information, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
|
3
|
|
$
|
19
|
Direct and incremental costs of technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
services, exclusive of depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization
|
|
|
1
|
|
|
|
—
|
|
|
|
|
2
|
|
|
5
|
Selling and administrative expenses, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
20
|
|
|
|
12
|
|
|
|
|
53
|
|
|
156
|
CONTACT:
IMS Health Holdings, Inc.
Tom Kinsley, +1-203-448-4691
Investor
Relations
tkinsley@imshealth.com
Tor Constantino,
+1-484-567-6732
Media Relations
tconstantino@us.imshealth.com
IMS HEALTH HOLDINGS, INC. (NYSE:IMS)
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IMS HEALTH HOLDINGS, INC. (NYSE:IMS)
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From Jul 2023 to Jul 2024