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
February
3, 2016
Date
of Report (Date of earliest event reported)
IMS Health Holdings, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
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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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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:
⃞
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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⃞
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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⃞
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
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⃞
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Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition.
On February 3, 2016, IMS Health Holdings, Inc. (the “Company”) issued a
press release regarding financial results for the fourth quarter and
full year ended December 31, 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 February 3, 2016 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: February 3, 2016
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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 February 3, 2016 issued by IMS Health
Holdings, Inc.
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Exhibit 99.1
IMS
Health Reports Fourth-Quarter and Full-Year 2015 Results, Issues
Full-Year 2016 Guidance
-
Revenue
up 28.3 percent for the fourth quarter and 21.0 percent for the full
year at constant currency
-
Adjusted
EBITDA up 16.8 percent for the fourth quarter and 11.2 percent for the
full year at constant currency
-
Adjusted
Net Income up 11.8 percent in the fourth quarter and 24.6 percent for
the full year at constant currency
-
Adjusted
Diluted EPS of $0.37 in the fourth quarter and $1.52 for the full year
-
High
teens cash tax rate guidance extended by two years through mid-2023
DANBURY, Conn.--(BUSINESS WIRE)--February 3, 2016--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
and full year ended December 31, 2015.
Fourth-Quarter 2015 Operating Results
Revenue for the fourth quarter of $812 million was up 28.3 percent on a
constant currency basis and 19.7 percent on a reported basis compared
with the fourth quarter of 2014. Excluding the impact of the acquisition
of Cegedim’s CRM and Strategic Data businesses (“Cegedim Acquisition”),
revenue was up 6.8 percent on a constant currency basis and up 0.7
percent on a reported basis, with the difference entirely due to the
year-over-year strengthening of the U.S. dollar versus currencies in
which the company transacts business.
The company’s revenue growth in the fourth quarter included a 47.3
percent increase in technology services revenue on a constant currency
basis, up 37.9 percent on a reported basis, versus the same period last
year. Information offerings revenue was up 12.4 percent on a constant
currency basis and up 4.2 percent reported. Emerging markets revenue
increased 32.0 percent in the fourth quarter at constant currency and
14.8 percent reported. Developed markets revenue grew 27.7 percent at
constant currency and 20.6 percent reported.
Excluding the Cegedim Acquisition, technology services revenue increased
12.3 percent at constant currency and 7.2 percent reported. Information
offerings revenue grew 2.1 percent on a constant currency basis and
declined 4.8 percent on a reported basis.
Adjusted EBITDA of $232 million improved 16.8 percent at constant
currency and 8.4 percent reported compared with the fourth quarter of
2014.
“We delivered another year of steady performance in our core IMS
business, including our tenth consecutive quarter of double-digit
constant currency revenue growth in technology services, continued
resilience of our information business, and strong operating results,”
said Ari Bousbib, chairman and CEO, IMS Health. “We are pleased with the
progress of the Cegedim Acquisition integration and expect sustained
top- and bottom-line growth in 2016 and beyond.”
Fourth-quarter 2015 net income was $29 million, compared with $8 million
in last year’s fourth quarter. Adjusted Net Income for the fourth
quarter was $125 million, up 11.8 percent on a constant currency basis
and flat on a reported basis.
Diluted earnings per share was $0.09 in the fourth quarter, compared
with $0.03 per share in the fourth quarter of 2014.
Adjusted Diluted Earnings per Share increased 14.6 percent at constant
currency and 2.5 percent reported to $0.37 in the fourth quarter.
Full-Year 2015 Operating Results
Revenue for the year ended December 31, 2015 of $2,921 million increased
21 percent on a constant currency basis and 10.6 percent reported
compared with 2014. Excluding the impact of the Cegedim Acquisition,
revenue was up 5.8 percent on a constant currency basis and down 2.6
percent on a reported basis. Adjusted EBITDA of $886 million increased
11.2 percent at constant currency and 0.9 percent reported compared with
2014. Net income was $417 million, compared with a net loss of $189
million in the prior-year period, which included one-time IPO-related
charges. Adjusted Net Income was $515 million, up 24.6 percent at
constant currency and 13.5 percent reported from 2014. Diluted Earnings
per Share was $1.23 for 2015, compared with a loss of $0.59 per share in
2014. Adjusted Diluted Earnings per Share increased 21.3 percent on a
constant currency basis and 10.5 percent on a reported basis to $1.52,
compared with $1.37 in the prior-year period.
Financial Position
As of December 31, 2015, cash and cash equivalents were $396 million and
the principal amount of debt was $4,266 million, resulting in net debt
of $3,870 million.
Cash Flow
Net cash provided by operating activities was $164 million in the fourth
quarter, and $490 million for full-year 2015. Capital expenditures and
additions to deferred software were $67 million in the quarter and $183
million for full-year 2015, up $16 million versus the prior year.
Unlevered Free Cash Flow for the fourth quarter was $211 million, or 91
percent of Adjusted EBITDA. Full-year 2015 Unlevered Free Cash Flow was
$628 million, or 71 percent of Adjusted EBITDA.
Share Repurchase
IMS Health repurchased $17 million of its stock during the fourth
quarter of 2015, which brings the year-to-date total to $317 million.
The company has a total of $233 million remaining for repurchase under
the existing share repurchase authorization.
Cash Tax Guidance
IMS Health extends its high teens cash tax rate guidance by two
additional years. The company now expects its cash tax rate to remain in
the high teens through mid-2023.
2016 Full-Year Guidance
IMS Health expects constant currency results for full-year 2016 as
follows: Revenue growth of 10 to 12 percent, Adjusted EBITDA growth of
7.5 to 9.5 percent, Adjusted Net Income growth of 6.5 to 8.5 percent and
Adjusted Diluted Earnings per Share growth of 8.5 to 10.5 percent.
Assuming foreign exchange rates hold at current levels through the end
of 2016, IMS Health expects reported revenue growth of 7.5 to 9.5
percent, Adjusted EBITDA growth of 6 to 8 percent, Adjusted Net Income
growth of 0.5 to 2.5 percent and Adjusted Diluted Earnings per Share
growth of 2.5 to 4.5 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 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 fourth-quarter and full-year 2015 results at 9:00
a.m. Eastern Time on Wednesday, February 3, 2016. 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 +1-800-926-7891 in the
U.S. and Canada, or +1-212-231-2903 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 Annual Report on Form 10-K for the year ended December 31, 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 included in Part I, Item 1A of our most recent annual report on
Form 10-K 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
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Table 1
IMS Health Holdings, Inc.
Income Statement
(Preliminary and unaudited)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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(in millions, except per share data)
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2015
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2014
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2015
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2014
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Revenue
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|
$
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812
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|
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$
|
678
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|
|
$
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2,921
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$
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2,641
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Information
|
|
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382
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|
|
|
366
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|
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|
1,483
|
|
|
|
1,515
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|
Technology services
|
|
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430
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|
|
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312
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|
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1,438
|
|
|
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1,126
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|
Operating costs of information, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
173
|
|
|
|
163
|
|
|
|
666
|
|
|
|
665
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|
Direct and incremental costs of technology services,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exclusive of depreciation and amortization
|
|
|
222
|
|
|
|
150
|
|
|
|
750
|
|
|
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573
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|
Selling and administrative expenses, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
214
|
|
|
|
164
|
|
|
|
712
|
|
|
|
721
|
|
Depreciation and amortization
|
|
|
77
|
|
|
|
110
|
|
|
|
341
|
|
|
|
441
|
|
Severance, impairment and other charges
|
|
|
38
|
|
|
|
4
|
|
|
|
88
|
|
|
|
33
|
|
Operating Income
|
|
|
88
|
|
|
|
87
|
|
|
|
364
|
|
|
|
208
|
|
Interest income
|
|
|
2
|
|
|
|
1
|
|
|
|
3
|
|
|
|
4
|
|
Interest expense
|
|
|
(45
|
)
|
|
|
(40
|
)
|
|
|
(169
|
)
|
|
|
(221
|
)
|
Other income (loss), net
|
|
|
3
|
|
|
|
5
|
|
|
|
19
|
|
|
|
(276
|
)
|
Non-Operating Loss, Net
|
|
|
(40
|
)
|
|
|
(34
|
)
|
|
|
(147
|
)
|
|
|
(493
|
)
|
Income (loss) before income taxes
|
|
|
48
|
|
|
|
53
|
|
|
|
217
|
|
|
|
(285
|
)
|
(Provision for) benefit from income taxes
|
|
|
(19
|
)
|
|
|
(45
|
)
|
|
|
200
|
|
|
|
96
|
|
Net Income (Loss)
|
|
$
|
29
|
|
|
$
|
8
|
|
|
$
|
417
|
|
|
$
|
(189
|
)
|
Earnings (Loss) per Share Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Basic
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|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
1.26
|
|
|
$
|
(0.59
|
)
|
Diluted
|
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
1.23
|
|
|
$
|
(0.59
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)
|
Weighted-Average Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
328.7
|
|
|
|
333.8
|
|
|
|
331.0
|
|
|
|
319.0
|
|
Diluted
|
|
|
336.1
|
|
|
|
344.4
|
|
|
|
339.3
|
|
|
|
319.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2
IMS Health Holdings, Inc.
Condensed Balance Sheet
(Preliminary and unaudited)
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|
|
|
|
|
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December 31,
|
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December 31,
|
(in millions)
|
|
2015
|
|
|
2014
|
Assets:
|
|
|
|
|
|
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|
Cash and cash equivalents
|
|
$
|
396
|
|
|
$
|
390
|
Restricted cash
|
|
|
10
|
|
|
|
24
|
Accounts receivable, net
|
|
|
508
|
|
|
|
330
|
Property, plant and equipment, net
|
|
|
167
|
|
|
|
153
|
Computer software, net
|
|
|
309
|
|
|
|
258
|
Goodwill & other identifiable intangibles, net
|
|
|
5,781
|
|
|
|
5,559
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Other current & long-term assets
|
|
|
288
|
|
|
|
382
|
Total Assets
|
|
$
|
7,459
|
|
|
$
|
7,096
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity:
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Accounts payable, accrued & other current liabilities, and
|
|
|
|
|
|
|
|
deferred revenues
|
|
$
|
974
|
|
|
$
|
735
|
Postretirement and postemployment benefits
|
|
|
109
|
|
|
|
95
|
Long-term deferred tax and other liabilities
|
|
|
609
|
|
|
|
985
|
Debt
|
|
|
4,195
|
|
|
|
3,739
|
Total Liabilities
|
|
|
5,887
|
|
|
|
5,554
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
|
|
1,572
|
|
|
|
1,542
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity
|
|
$
|
7,459
|
|
|
$
|
7,096
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
IMS Health Holdings, Inc.
Condensed Statement of Cash Flows
(Preliminary and unaudited)
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
(in millions)
|
|
2015
|
|
|
2014
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
417
|
|
|
$
|
(189
|
)
|
Adjustments to Reconcile Net Income (Loss) to Net Cash
|
|
|
|
|
|
|
|
|
Provided by Operating Activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
341
|
|
|
|
441
|
|
Deferred income taxes
|
|
|
(294
|
)
|
|
|
(189
|
)
|
Non-cash stock-based compensation charges
|
|
|
25
|
|
|
|
58
|
|
Loss on Venezuela remeasurement
|
|
|
7
|
|
|
|
49
|
|
Other
|
|
|
(10
|
)
|
|
|
108
|
|
Change in assets and liabilities, excluding effects from
|
|
|
|
|
|
|
|
|
acquisitions and dispositions:
|
|
|
|
|
|
|
|
|
Changes in current assets and liabilities
|
|
|
9
|
|
|
|
(130
|
)
|
Changes in long-term assets and liabilities
|
|
|
(5
|
)
|
|
|
(38
|
)
|
Net Cash Provided by Operating Activities
|
|
|
490
|
|
|
|
110
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(52
|
)
|
|
|
(72
|
)
|
Additions to computer software
|
|
|
(131
|
)
|
|
|
(95
|
)
|
Payments for acquisitions of businesses, net of cash acquired
|
|
|
(541
|
)
|
|
|
(58
|
)
|
Other
|
|
|
8
|
|
|
|
(16
|
)
|
Net Cash Used in Investing Activities
|
|
|
(716
|
)
|
|
|
(241
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from initial public offering, net of costs
|
|
|
—
|
|
|
|
987
|
|
Other financing activities
|
|
|
262
|
|
|
|
(1,110
|
)
|
Net Cash Provided by (Used in) Financing Activities
|
|
|
262
|
|
|
|
(123
|
)
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
(30
|
)
|
|
|
(81
|
)
|
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
6
|
|
|
|
(335
|
)
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
390
|
|
|
|
725
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
396
|
|
|
$
|
390
|
|
|
|
|
|
|
|
Table 4
IMS Health Holdings, Inc.
Net Income (Loss) to Adjusted EBITDA Reconciliation
(Preliminary and unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
(in millions)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income (Loss)
|
|
$
|
29
|
|
|
$
|
8
|
|
|
$
|
417
|
|
|
$
|
(189
|
)
|
Provision for (benefit from) income taxes
|
|
|
19
|
|
|
|
45
|
|
|
|
(200
|
)
|
|
|
(96
|
)
|
Other (income) loss, net
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
276
|
|
Interest expense
|
|
|
45
|
|
|
|
40
|
|
|
|
169
|
|
|
|
221
|
|
Interest income
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(4
|
)
|
Depreciation and amortization
|
|
|
77
|
|
|
|
110
|
|
|
|
341
|
|
|
|
441
|
|
Deferred revenue purchase accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments
|
|
|
4
|
|
|
|
1
|
|
|
|
10
|
|
|
|
4
|
|
Stock-based compensation related charges(1)
|
|
|
7
|
|
|
|
6
|
|
|
|
28
|
|
|
|
58
|
|
Restructuring and related charges(2)
|
|
|
38
|
|
|
|
5
|
|
|
|
91
|
|
|
|
39
|
|
Acquisition-related charges(3)
|
|
|
18
|
|
|
|
5
|
|
|
|
51
|
|
|
|
24
|
|
Sponsor monitoring fees(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom SARs compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Adjusted EBITDA
|
|
$
|
232
|
|
|
$
|
214
|
|
|
$
|
886
|
|
|
$
|
878
|
|
Depreciation and amortization
|
|
|
(33
|
)
|
|
|
(36
|
)
|
|
|
(136
|
)
|
|
|
(130
|
)
|
Interest expense, net
|
|
|
(43
|
)
|
|
|
(39
|
)
|
|
|
(166
|
)
|
|
|
(217
|
)
|
Royalty hedge gains
|
|
|
3
|
|
|
|
5
|
|
|
|
23
|
|
|
|
6
|
|
Cash tax payments, net of refunds
|
|
|
(34
|
)
|
|
|
(19
|
)
|
|
|
(92
|
)
|
|
|
(83
|
)
|
Adjusted Net Income
|
|
$
|
125
|
|
|
$
|
125
|
|
|
$
|
515
|
|
|
$
|
454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
|
December 31,
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating costs of information
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
6
|
Direct and incremental costs of technology services
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
5
|
Selling and administrative expenses
|
|
|
7
|
|
|
|
6
|
|
|
|
24
|
|
|
|
47
|
(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 $3 million for the three and twelve months ended
December 31, 2015 and $2 million and $6 million for the three and
twelve months ended December 31, 2014, respectively, are primarily
included in Operating costs of information. Twelve months ended
December 31, 2014 excludes 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 primarily in Selling and administrative expenses.
|
(4)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the twelve months ended December 31, 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 December 31,
|
|
|
Twelve Months Ended December 31,
|
(in millions, except per share data)
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Net Income (Loss)
|
|
$
|
29
|
|
|
$
|
8
|
|
|
$
|
417
|
|
|
$
|
(189
|
)
|
Provision for (benefit from) income taxes
|
|
|
19
|
|
|
|
45
|
|
|
|
(200
|
)
|
|
|
(96
|
)
|
Amortization associated with purchase accounting
|
|
|
44
|
|
|
|
74
|
|
|
|
205
|
|
|
|
304
|
|
Deferred revenue purchasing accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments
|
|
|
4
|
|
|
|
1
|
|
|
|
10
|
|
|
|
4
|
|
Stock-based compensation related charges(1)
|
|
|
7
|
|
|
|
6
|
|
|
|
28
|
|
|
|
58
|
|
Restructuring and related charges(2)
|
|
|
38
|
|
|
|
5
|
|
|
|
91
|
|
|
|
46
|
|
Acquisition-related charges(3)
|
|
|
18
|
|
|
|
5
|
|
|
|
51
|
|
|
|
24
|
|
Sponsor monitoring fees(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom SARs compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Other (income) loss, net
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
276
|
|
Adjusted Pre Tax Income
|
|
$
|
156
|
|
|
$
|
139
|
|
|
$
|
584
|
|
|
$
|
531
|
|
Royalty Hedge Gains
|
|
|
3
|
|
|
|
5
|
|
|
|
23
|
|
|
|
6
|
|
Cash tax payments, net of refunds
|
|
|
(34
|
)
|
|
|
(19
|
)
|
|
|
(92
|
)
|
|
|
(83
|
)
|
Adjusted Net Income
|
|
$
|
125
|
|
|
$
|
125
|
|
|
$
|
515
|
|
|
$
|
454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Share Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
|
$
|
0.37
|
|
|
$
|
1.56
|
|
|
$
|
1.42
|
|
Diluted
|
|
$
|
0.37
|
|
|
$
|
0.36
|
|
|
$
|
1.52
|
|
|
$
|
1.37
|
|
Weighted-Average Common Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
328.7
|
|
|
|
333.8
|
|
|
|
331.0
|
|
|
|
319.0
|
|
Diluted
|
|
|
336.1
|
|
|
|
344.4
|
|
|
|
339.3
|
|
|
|
330.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
Twelve Months Ended
|
|
|
December 31,
|
|
|
December 31,
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating costs of information
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
6
|
Direct and incremental costs of technology services
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
5
|
Selling and administrative expenses
|
|
|
7
|
|
|
|
6
|
|
|
|
24
|
|
|
|
47
|
(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 $3 million for the three and twelve months ended
December 31, 2015 and $2 million and $6 million for the three and
twelve months ended December 31, 2014, respectively, are primarily
included in Operating costs of information. Twelve months ended
December 31, 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 primarily in Selling and administrative expenses.
|
(4)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the twelve months ended December 31, 2014 are
included in Operating costs of information and Selling and
administrative expenses, respectively.
|
|
|
|
|
|
|
|
Table 6
IMS Health Holdings, Inc.
Net Cash Provided by Operating Activities
to Unlevered Free Cash Flow
(Preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
|
(in millions)
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Net Cash Provided by Operating Activities
|
|
$
|
164
|
|
|
$
|
147
|
|
|
$
|
490
|
|
|
$
|
110
|
|
Capital expenditures
|
|
|
(23
|
)
|
|
|
(13
|
)
|
|
|
(52
|
)
|
|
|
(72
|
)
|
Additions to computer software
|
|
|
(44
|
)
|
|
|
(25
|
)
|
|
|
(131
|
)
|
|
|
(95
|
)
|
Free Cash Flow
|
|
$
|
97
|
|
|
$
|
109
|
|
|
$
|
307
|
|
|
$
|
(57
|
)
|
Cash interest payments
|
|
|
52
|
|
|
|
47
|
|
|
|
158
|
|
|
|
243
|
|
Cash tax payments, net of refunds
|
|
|
34
|
|
|
|
19
|
|
|
|
92
|
|
|
|
83
|
|
Acquisition-related charges(1)
|
|
|
18
|
|
|
|
5
|
|
|
|
51
|
|
|
|
24
|
|
Sponsor monitoring fees(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
74
|
|
Non-executive phantom SARs compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense (2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30
|
|
Secondary offering expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
Debt extinguishment make-whole payments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
151
|
|
Severance, transaction & other payments
|
|
|
14
|
|
|
|
6
|
|
|
|
43
|
|
|
|
26
|
|
FX hedge (receipts) payments
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
|
(24
|
)
|
|
|
2
|
|
Unlevered Free Cash Flow
|
|
$
|
211
|
|
|
$
|
182
|
|
|
$
|
628
|
|
|
$
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Acquisition-related charges and Sponsor monitoring fees are
included primarily in Selling and administrative expenses.
|
(2)
|
|
Non-executive phantom SARs compensation expense of $10 million and
$20 million for the twelve months ended December 31, 2014 are
included in Operating costs of information and Selling and
administrative expenses, respectively.
|
|
|
|
|
|
|
Table 7
IMS Health Holdings, Inc.
Non-GAAP Adjustments
By Income Statement Line Items
(Preliminary and Unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
(in millions)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Non-GAAP adjustments included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs of information, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
21
|
Direct and incremental costs of technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
services, exclusive of depreciation and amortization
|
|
|
2
|
|
|
|
1
|
|
|
|
4
|
|
|
|
5
|
Selling and administrative expenses, exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation and amortization
|
|
|
23
|
|
|
|
10
|
|
|
|
76
|
|
|
|
165
|
CONTACT:
IMS Health Holdings, Inc.
Investor Relations
Tom
Kinsley, +1-203-448-4691
tkinsley@imshealth.com
or
Media
Relations
Tor Constantino, +1-484-567-6732
tconstantino@us.imshealth.com
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