IMS Health Reports 13 Percent Revenue Growth in Third-Quarter 2005

IMS Health (NYSE: RX) today announced third-quarter 2005revenues of $432.8 million, up 13 percent (12 percent constantdollar), compared with revenues of $384.2 million for the thirdquarter of 2004. Third-quarter diluted earnings per share on anSEC-reported basis was $0.30, up 7 percent, compared with $0.28 in theprior year. Third-quarter adjusted diluted earnings per share was$0.34, compared with $0.30 per share in the same period of 2004, anincrease of 13 percent. Net income on an SEC-reported basis was $71.1million, up 8 percent compared with net income of $65.6 million in theyear-earlier quarter. On an adjusted basis, net income for the thirdquarter of 2005 was $80.6 million, up 14 percent, compared with netincome of $70.7 million in the prior year.

"We delivered another outstanding quarter," said David R.Carlucci, IMS chief executive officer and president. "In a dynamicmarketplace, IMS delivered one of our strongest third-quarter resultsin revenue and adjusted earnings growth in recent years, withexceptional double-digit revenue gains in the Americas, Europe andAsia Pacific, including Japan. Our execution across our business linesis excellent, and we remain focused on strengthening and broadeningclient relationships. We have been gaining momentum throughout theyear, and remain very confident that we will achieve our guidance for2005."

Operating income in the third quarter was $102.2 million on anSEC-reported basis and $110.7 million on an adjusted basis, comparedwith operating income of $102.9 million on both an SEC-reported andadjusted basis in the year-earlier period. Adjusted operating incomeexcludes a charge of $8.5 million for costs associated with theproposed merger of IMS and VNU N.V. Operating income was down 1percent on an SEC-reported basis and rose 8 percent on an adjustedbasis (7 percent constant dollar).

Adjusted results for the third quarter of 2005 exclude themerger-related costs mentioned above, certain net pre-tax income itemstotaling $0.7 million, and certain net tax provisions of $1.6 million.

Adjusted results for the 2004 third quarter exclude certain netpre-tax expense items totaling approximately $1.7 million, as well ascertain net tax provisions of approximately $3.3 million. See Tables 5and 7 for a reconciliation between SEC and adjusted results for thequarters ended September 30, 2005 and 2004, respectively.

Year-to-Date Results

For the first nine months of 2005, revenues were $1,277.1 million,up 13 percent (11 percent constant dollar) over the prior year period.Diluted earnings per share on an SEC-reported basis for the 2005 firstnine months was $0.84, compared with $0.89 in the year-earlier period,down 6 percent, primarily due to the tax recorded in the first ninemonths of 2005 on cash IMS is repatriating under the American JobsCreation Act of 2004 (AJCA). Adjusted diluted earnings per share forthe first nine months of this year was $0.98, a 17 percent increaseover the $0.84 reported in the prior-year period. On an SEC-reportedbasis, net income for the first nine months of this year was $194.7million, compared with $211.8 million for the year-ago period, an 8percent decrease. On an adjusted basis, net income for the 2005 firstnine months was $226.5 million, up 12 percent, compared with adjustednet income of $201.6 million for the comparable period last year.

Operating income for the first nine months of 2005 was $302.4million on an SEC-reported basis and $318.3 million on an adjustedbasis, compared with $301.6 million on both an SEC-reported andadjusted basis in the year-earlier period. Adjusted operating incomefor the 2005 first nine months excludes a charge of $15.9 million forcosts associated with the proposed IMS and VNU merger. Operatingincome growth in the 2005 first nine months was flat on anSEC-reported basis and up 6 percent on an adjusted basis (4 percentconstant dollar) from the same period last year.

Adjusted results for the first nine months of 2005 exclude themerger-related costs mentioned above and certain net pre-tax incomeitems totaling approximately $15.1 million, as well as certain net taxprovisions of approximately $31.1 million, primarily related to the$39.5 million tax expense recorded in the first nine months of 2005 oncash repatriated under the AJCA. Adjusted results for the first ninemonths of 2004 exclude certain net pre-tax income items ofapproximately $9.6 million and certain net tax benefits ofapproximately $0.7 million. See Tables 6 and 8 for a reconciliationbetween SEC and adjusted results for the nine months ended September30, 2005 and 2004, respectively.

Balance Sheet Highlights

IMS's cash, cash equivalents, restricted cash and short-termmarketable securities as of September 30, 2005 was $351.6 million,compared with $460.0 million on December 31, 2004. Total debt as ofSeptember 30, 2005 was $570.5 million, down from $626.7 million at theend of 2004. See Table 9 for selected consolidated balance sheetitems.

Shares Outstanding, Share Repurchase Program

The number of shares outstanding as of September 30, 2005 wasapproximately 231.7 million, compared with 232.0 million the sameperiod a year ago. Prior to suspending its share buyback program as aresult of the proposed merger with VNU, the company repurchased 6.2million shares year to date at a total cost of $147.9 million.Approximately 8.5 million IMS options have been exercised year todate.

Repatriation

On April 19, 2005, IMS announced that it is taking the opportunityprovided by the AJCA to repatriate approximately $650 million ofpreviously undistributed foreign earnings. In the third quarter,approximately 90 percent of the company's repatriation plan wasexecuted, with the balance expected to be completed by the end of theyear.

About IMS

Operating in more than 100 countries, IMS Health is the world'sleading provider of information solutions to the pharmaceutical andhealthcare industries. With $1.6 billion in 2004 revenue and more than50 years of industry experience, IMS offers leading-edge businessintelligence products and services that are integral to clients'day-to-day operations, including portfolio optimization capabilities;launch and brand management solutions; sales force effectivenessinnovations; managed care and over-the-counter offerings; andconsulting and services solutions that improve ROI and the delivery ofquality healthcare worldwide. Additional information is available athttp://www.imshealth.com.

Conference Call and Webcast Details

IMS will host a conference call at 8:30 a.m. (EDT) today todiscuss its third-quarter 2005 financial results. To participate,please dial 1-800-745-2192 (U.S. and Canada) and 1-212-231-6015(outside the United States and Canada) approximately 15 minutes beforethe scheduled start of the call. The conference call also will beaccessible live on the Investor Relations section of the IMS Websiteat www.imshealth.com.

A replay of the conference call will be available online on theInvestor Relations section of the IMS Website and via telephone bydialing 1-800-633-8284 (U.S. and Canada) or 1-402-977-9140 (outsidethe U.S. and Canada), and entering access code 21263875.

Forward-Looking Statements

This press release includes statements that may constituteforward-looking statements made pursuant to the safe harbor provisionsof the Private Securities Litigation Reform Act of 1995. Although IMSHealth believes the expectations contained in such forward-lookingstatements are reasonable, it can give no assurance that suchexpectations will prove correct. This information may involve risksand uncertainties that could cause actual results of IMS Health todiffer materially from the forward-looking statements. Factors thatcould cause or contribute to such differences include, but are notlimited to (i) the risks associated with operating on a global basis,including fluctuations in the value of foreign currencies relative tothe U.S. dollar, and the ability to successfully hedge such risks,(ii) to the extent IMS Health seeks growth through acquisitions andjoint ventures, the ability to identify, consummate and integrateacquisitions and joint ventures on satisfactory terms, (iii) theability to develop new or advanced technologies and systems for itsbusinesses on time and on a cost-effective basis, (iv) regulatory,legislative and enforcement initiatives, particularly in the areas ofmedical privacy and tax, (v) to the extent unforeseen cash needsarise, the ability to obtain financing on favorable terms, (vi)deterioration in economic conditions, particularly in thepharmaceutical, healthcare or other industries in which IMS Health'scustomers operate, and (vii) the inability, for any reason, toconsummate the merger with VNU N.V., as expected. Additionalinformation on factors that may affect the business and financialresults of the Company can be found in filings of the Company madefrom 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)

2005 2004 % Fav
SEC SEC (Unfav)
---------------------
Revenue (b)
Sales Force Effectiveness $208.0 $193.9 7 %
Portfolio Optimization 124.1 109.7 13
Launch, Brand and Other 100.7 80.5 25
------ ------
Total 432.8 384.2 13

Operating Expenses (c)
Operating Costs (199.7)(165.6) (21)
Selling and Administrative (96.1) (92.4) (4)
Depreciation and Amortization (26.3) (23.4) (13)
Merger Costs (f) (8.5) 0.0 NM
------ ------
Total (330.6)(281.3) (18)

Operating Income 102.2 102.9 (1)

Interest expense, net (4.7) (2.9) (61)
Gains from investments, net (e) 0.3 2.2 (88)
Other income (expense), net (g) 7.7 (3.3) NM
------ ------ --
Pretax Income 105.4 98.9 7

Provision for Income Taxes (h) (34.3) (33.9) (1)
TriZetto Equity Income, net (d) 0.0 0.7 NM
------ ------
Net Income $71.1 $65.6 8

Diluted EPS:
Total Diluted EPS $0.30 $0.28 7 %

Shares Outstanding:
Weighted Average Diluted 234.6 237.1 1 %
End-of-Period Actual 231.7 232.0 0

The accompanying notes are an integral part of these financial tables.

Table 2
IMS Health
SEC Income Statement (a)
Nine Months Ended September 30
(unaudited, in millions except per share)

% Fav
2005 SEC 2004 SEC (Unfav)
-------------------------
Revenue (b)
Sales Force Effectiveness $615.4 $563.6 9 %
Portfolio Optimization 372.0 335.5 11
Launch, Brand and Other 289.7 226.2 28
-------- --------
Total 1,277.1 1,125.3 13

Operating Expenses (c)
Operating Costs (572.5) (481.5) (19)
Selling and Administrative (309.6) (274.9) (13)
Depreciation and Amortization (76.7) (67.4) (14)
Merger Costs (f) (15.9) 0.0 NM
-------- --------
Total (974.7) (823.7) (18)

Operating Income 302.4 301.6 0

Interest expense, net (13.1) (8.3) (58)
Gains from investments, net (e) 2.6 10.7 (76)
Losses on issuance of investees' stock, net 0.0 (0.1) NM
Other income (expense), net (g) 25.6 (2.2) NM
-------- -------- --
Pretax Income 317.5 301.8 5

Provision for Income Taxes (h) (122.8) (89.4) (37)
TriZetto Equity Loss, net (d) 0.0 (0.6) NM
-------- --------
Net Income $194.7 $211.8 (8)

Diluted EPS:
Total Diluted EPS $0.84 $0.89 (6)%

Shares Outstanding:
Weighted Average Diluted 232.1 239.2 3 %
End-of-Period Actual 231.7 232.0 0

The accompanying notes are an integral part of these financial tables.

Table 3
IMS Health
Adjusted Income Statement (a)
Three Months Ended September 30
(unaudited, in millions except per share)

2005 2004 % Fav Constant $
Adjusted Adjusted (Unfav) Growth (j)
------------------------------------
Revenue (b)
Sales Force Effectiveness $208.0 $193.9 7 % 6 %
Portfolio Optimization 124.1 109.7 13 13
Launch, Brand and Other 100.7 80.5 25 25
-------- --------
Total 432.8 384.2 13 12

Operating Expenses (c)
Operating Costs (199.7) (165.6) (21)
Selling and Administrative (96.1) (92.4) (4)
Depreciation and Amortization (26.3) (23.4) (13)
-------- --------
Total (322.1) (281.3) (15)

Operating Income 110.7 102.9 8 7

Interest expense, net (4.7) (2.9) (61)
Other income, net 7.2 0.6 NM
-------- -------- --
Pretax Income 113.3 100.6 13

Provision for Income Taxes (32.7) (30.6) (7)
TriZetto Equity Income, net (d) 0.0 0.7 NM
-------- -------- --

Net Income $80.6 $70.7 14 %

Diluted EPS:
Total Diluted EPS $0.34 $0.30 13 %

Shares Outstanding:
Weighted Average Diluted 234.6 237.1 1 %
End-of-Period Actual 231.7 232.0 0

The accompanying notes are an integral part of these financial tables.

Table 4
IMS Health
Adjusted Income Statement (a)
Nine Months Ended September 30
(unaudited, in millions except per share)

2005 2004 % Fav Constant $
Adjusted Adjusted (Unfav) Growth (j)
------------------------------------
Revenue (b)
Sales Force Effectiveness $615.4 $563.6 9 % 7 %
Portfolio Optimization 372.0 335.5 11 9
Launch, Brand and Other 289.7 226.2 28 26
-------- --------
Total 1,277.1 1,125.3 13 11

Operating Expenses (c)
Operating Costs (572.5) (481.5) (19)
Selling and Administrative (309.6) (274.9) (13)
Depreciation and Amortization (76.7) (67.4) (14)
-------- --------
Total (958.8) (823.7) (16)

Operating Income 318.3 301.6 6 4

Interest expense, net (13.1) (8.3) (58)
Gain from investments (e) 3.0 0.0 NM
Other income (expense), net 10.0 (1.1) NM
-------- --------
Pretax Income 318.2 292.2 9

Provision for Income Taxes (91.7) (90.0) (2)
TriZetto Equity Loss, net (d) 0.0 (0.6) NM
-------- --------

Net Income $226.5 $201.6 12 %

Diluted EPS:
Total Diluted EPS $0.98 $0.84 17 %

Shares Outstanding:
Weighted Average Diluted 232.1 239.2 3 %
End-of-Period Actual 231.7 232.0 0

The accompanying notes are an integral part of these financial tables.

Table 5
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Three Months Ended September 30, 2005
(unaudited, in millions except per share)

Adjusted
SEC Q3 Adjustments Q3
---------------------------
Revenue (b)
Sales Force Effectiveness $208.0 $0.0 $208.0
Portfolio Optimization 124.1 0.0 124.1
Launch, Brand and Other 100.7 0.0 100.7
------ ----------- --------
Total 432.8 0.0 432.8

Operating Expenses (c)
Operating Costs (199.7) 0.0 (199.7)
Selling and Administrative (96.1) 0.0 (96.1)
Depreciation and Amortization (26.3) 0.0 (26.3)
Merger Costs (f) (8.5) 8.5 0.0
------ ----------- --------
Total (330.6) 8.5 (322.1)

Operating Income 102.2 8.5 110.7

Interest expense, net (4.7) 0.0 (4.7)
Gains from investments, net (e) 0.3 (0.3) 0.0
Other income, net (g) 7.7 (0.4) 7.2
------ ----------- --------
Pretax Income 105.4 7.8 113.3

Provision for Income Taxes (h) (34.3) 1.6 (32.7)
------ ----------- --------

Net Income $71.1 $9.4 $80.6

Diluted EPS:
Total Diluted EPS $0.30 $0.04 $0.34

Shares Outstanding:
Weighted Average Diluted 234.6 0.0 234.6
End-of-Period Actual 231.7 0.0 231.7

The accompanying notes are an integral part of these financial tables.

Table 6
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Nine Months Ended September 30, 2005
(unaudited, in millions except per share)

Adjusted
SEC Q3 Adjustments Q3
----------------------------
Revenue (b)
Sales Force Effectiveness $615.4 $0.0 $615.4
Portfolio Optimization 372.0 0.0 372.0
Launch, Brand and Other 289.7 0.0 289.7
------- ----------- --------
Total 1,277.1 0.0 1,277.1

Operating Expenses (c)
Operating Costs (572.5) 0.0 (572.5)
Selling and Administrative (309.6) 0.0 (309.6)
Depreciation and Amortization (76.7) 0.0 (76.7)
Merger Costs (f) (15.9) 15.9 0.0
------- ----------- --------
Total (974.7) 15.9 (958.8)

Operating Income 302.4 15.9 318.3

Interest expense, net (13.1) 0.0 (13.1)
Gains from investments, net (e) 2.6 0.4 3.0
Other income, net (g) 25.6 (15.5) 10.0
------- ----------- --------
Pretax Income 317.5 0.8 318.2

Provision for Income Taxes (h) (122.8) 31.1 (91.7)
------- ----------- --------

Net Income $194.7 $31.8 $226.5

Diluted EPS:
Total Diluted EPS $0.84 $0.14 $0.98

Shares Outstanding:
Weighted Average Diluted 232.1 0.0 232.1
End-of-Period Actual 231.7 0.0 231.7

The accompanying notes are an integral part of these financial tables.

Table 7
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Three Months Ended September 30, 2004
(unaudited, in millions except per share)

Adjusted
SEC Q3 Adjustments Q3
---------------------------
Revenue (b)
Sales Force Effectiveness $193.9 $0.0 $193.9
Portfolio Optimization 109.7 0.0 109.7
Launch, Brand and Other 80.5 0.0 80.5
------ ----------- --------
Total 384.2 0.0 384.2

Operating Expenses (c)
Operating Costs (165.6) 0.0 (165.6)
Selling and Administrative (92.4) 0.0 (92.4)
Depreciation and Amortization (23.4) 0.0 (23.4)
------ ----------- --------
Total (281.3) 0.0 (281.3)

Operating Income 102.9 0.0 102.9

Interest expense, net (2.9) 0.0 (2.9)
Gains from investments, net (e) 2.2 (2.2) 0.0
Other income (expense), net (g) (3.3) 4.0 0.6
------ ----------- --------
Pretax Income 98.9 1.7 100.6

Provision for Income Taxes (h) (33.9) 3.3 (30.6)
TriZetto Equity Loss, net (d) 0.7 0.0 0.7
------ ----------- --------
Net Income $65.6 $5.0 $70.7

Diluted EPS:
Total Diluted EPS $0.28 $0.02 $0.30

Shares Outstanding:
Weighted Average Diluted 237.1 0.0 237.1
End-of-Period Actual 232.0 0.0 232.0

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, 2004
(unaudited, in millions except per share)

Adjusted
SEC Q3 Adjustments Q3
----------------------------
Revenue (b)
Sales Force Effectiveness $563.6 $0.0 $563.6
Portfolio Optimization 335.5 0.0 335.5
Launch, Brand and Other 226.2 0.0 226.2
------- ----------- --------
Total 1,125.3 0.0 1,125.3

Operating Expenses (c)
Operating Costs (481.5) 0.0 (481.5)
Selling and Administrative (274.9) 0.0 (274.9)
Depreciation and Amortization (67.4) 0.0 (67.4)
------- ----------- --------
Total (823.7) 0.0 (823.7)

Operating Income 301.6 0.0 301.6

Interest expense, net (8.3) 0.0 (8.3)
Gains from investments, net (e) 10.7 (10.7) 0.0
Losses on issuance of investees' stock,
net (0.1) 0.1 0.0
Other expense, net (g) (2.2) 1.1 (1.1)
------- ----------- --------
Pretax Income 301.8 (9.6) 292.2

Provision for Income Taxes (h) (89.4) (0.7) (90.0)
TriZetto Equity Loss, net (d) (0.6) 0.0 (0.6)
------- ----------- --------
Net Income $211.8 $(10.2) $201.6

Diluted EPS:
Total Diluted EPS $0.89 $(0.05) $0.84

Shares Outstanding:
Weighted Average Diluted 239.2 0.0 239.2
End-of-Period Actual 232.0 0.0 232.0

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, 2005 Dec. 31, 2004
-------------- -------------

Cash and cash equivalents $246.2 $444.9

Restricted cash 105.4 0.0

Short-term marketable securities 0.0 15.1

Accounts receivable, net (i) 287.9 264.8

Total debt 570.5 626.7

The accompanying notes are an integral part of these financial tables.

IMS Health

NOTES TO FINANCIAL TABLES

(a) "SEC Income Statement" (Tables 1 and 2) differs from the"Adjusted Income Statement" (Tables 3 and 4) by amounts that aredetailed on Tables 5, 6, 7 and 8. Adjusted results are those used bymanagement for the purposes of global business decision-making,including developing budgets and managing expenditures. Adjustedresults exclude certain U.S. GAAP measures to the extent thatmanagement believes exclusion will facilitate comparisons acrossperiods and more clearly indicate trends. Although IMS disclosesadjusted results in order to give a full picture to investors of itsbusiness as seen by management, these adjusted results are notprepared specifically for investors and are not a replacement for themore comprehensive information for investors included in IMS's U.S.GAAP results. The method IMS uses to prepare adjusted results differsin significant respects from U.S. GAAP and is likely to differ fromthe methods used by other companies. Investors interested inmanagement's adjusted results are urged to review the detailedreconciliations of the adjusted measures to comparable U.S. GAAPresults.

(b) Revenue in 2004 has been reclassified to conform to the 2005presentation, including a reclassification of Consulting and Servicesrevenue into the other three business lines. Consulting and Servicesrevenue was $67.3 million in third quarter 2005, up 64% (63% constantdollar) from $41.0 million in third-quarter 2004. Consulting andServices revenue was $184.4 million for the first nine months of 2005,up 53% (50% constant dollar) from $120.7 million in the first ninemonths of 2004.

(c) Operating expenses in 2004 reflect a reclassification betweenoperating costs and selling and administrative expenses to make themcomparable with the 2005 presentation.

(d) In the fourth quarter of 2004, IMS Health sold its entireinterest in TriZetto back to the company.

(e) Gains from investments, net were $0.3 million in the thirdquarter of 2005, relating primarily to a dividend recorded in theEnterprise portfolio, offset by related management fees and certainportfolio write downs. This is compared with a net gain of $2.2million in the third quarter of 2004 from the sale of certainEnterprise investments, partially offset by fees for the Enterpriseinvestments. For the first nine months of 2005, Gains frominvestments, net were $2.6 million relating primarily to a $3.0million gain from the sale of a 20% interest we held in a Germancompany (GPI), partially offset by management fees for the Enterpriseinvestments. This is compared with a net gain of $10.7 million in thefirst nine months of 2004 from the sale of certain Enterpriseinvestments and the items discussed above. These gains and losses fromEnterprise investments are excluded from adjusted results because theyrelate to non-strategic investments and are not related to IMS's corebusiness operations.

(f) Merger costs related to professional fees incurred during thesecond and third quarters of 2005 in connection with IMS's proposedmerger with VNU N.V., as announced on July 11, 2005. These costs, andthe associated tax benefits, are excluded from adjusted resultsbecause they were incurred specifically in relation to the proposedmerger of IMS with VNU N.V. and are not related to IMS's core businessoperations.

(g) Other income (expense), net includes $0.0 million and $1.2million of expenses for legal fees in the third quarter of 2005 and2004, respectively, related to the IRI litigation. For the first ninemonths, IRI litigation legal fees were $1.2 million and $2.8 millionin 2005 and 2004, respectively. These expenses are excluded fromadjusted results because they relate to a D&B legacy matter and arenot related to IMS's core business operations. Other income (expense),net also includes a $6.2 million foreign currency hedge gain relatedto the repatriation executed in the third quarter of 2005 under theAmerican Jobs Creation Act of 2004 (AJCA) (see note (h)). This gain isexcluded from adjusted results because the AJCA is a one-time event.In addition, Other income (expense), net excludes a quarterly phasingadjustment of foreign currency hedge gains (losses), net of $5.8million and $(10.5) million in the third quarter and first nine monthsof 2005, respectively, compared with $2.8 million and $(1.7) millionin the third quarter and first nine months of 2004, respectively. Thisphasing adjustment is made to adjusted results in order to moreclosely match the timing of foreign exchange hedge gains (losses) withthe operating income being hedged. For the full year, there is nodifference between the hedge losses in adjusted and SEC results.

(h) The tax provision for the third quarter and first nine monthsof 2005 includes a tax benefit of $2.8 million and $0.8 million,respectively, related to the Enterprise investments described in note(e) and the items described in notes (f) and (g). The tax provisionfor the third quarter and first nine months of 2004 includes a taxbenefit of $0.6 million and tax provision of $3.3 million,respectively, related to the items described in notes (e) and (g).These tax provisions are excluded from adjusted results because therelated charges and gains are excluded from adjusted results. The taxprovision in the first nine months of 2005 also included a $29.3million tax benefit related to a favorable audit resolution in Japanof the tax years through 2003. Adjusted results include a phasingadjustment to recognize this benefit ratably throughout the year; thephasing adjustment for the third quarter and first nine months of 2005was $(7.7) million and $7.6 million, respectively. This phasingadjustment allows the full-year effective tax rate to be applied ineach quarter to adjusted pretax results. Also in the first nine monthsof 2005, $39.5 million of tax expense was recorded related to thedecision to repatriate approximately $650 million of foreign earningsback to the U.S. during 2005 under the AJCA, including a tax benefitof $3.3 million recorded in the third quarter as a result of foreigntax deductions related to financing the repatriation dividend. As theAJCA is a one-time event, this tax expense has been excluded fromadjusted results. In addition, the first-quarter 2004 tax provisionalso includes a $15.6 million tax benefit related to a favorable auditresolution in the U.S. of the 1998 and 1999 tax years. The phasingadjustment for the third quarter of 2004 was $(3.9) million and $4.0million for the first nine months of 2004.

(i) December 31, 2004 Accounts receivable, net has beenreclassified to conform to current period presentation.

(j) Constant-dollar growth rates eliminate the impact ofyear-over-year foreign currency fluctuations.

Amounts presented in the financial tables may not add due torounding.

These financial tables should be read in conjunction with IMSHealth's filings previously made or to be made with the Securities andExchange Commission.