IMS Health Reports Strong Fourth-Quarter 2005, with Double-Digit Earnings-Per-Share Growth

IMS Health (NYSE: RX) today announced fourth-quarterdiluted earnings per share on an SEC-reported basis of $0.38, up 19percent, compared with $0.32 in the prior year. Fourth-quarteradjusted diluted earnings per share was $0.40, compared with $0.34 pershare in the same period of 2004, an increase of 18 percent.Fourth-quarter 2005 revenues were $477.7 million, up 8 percent (12percent constant dollar), compared with revenues of $443.7 million forthe fourth quarter of 2004. Net income on an SEC-reported basis was$89.4 million, up 22 percent compared with net income of $73.6 millionin the year-earlier quarter. On an adjusted basis, net income for thefourth quarter of 2005 was $94.1 million, up 19 percent, compared withnet income of $79.2 million in the prior year.

"We turned in another strong performance in the fourth quarter,with each of our regions again posting double-digit constant dollarrevenue gains," said David R. Carlucci, IMS chief executive officerand president. "Our 2005 performance was exceptional, at the high endof our full-year guidance, reflecting strong client relationshipsworldwide and excellent execution by our teams. Our operationalperformance is accelerating, and we expect to continue buildingmomentum throughout 2006."

Operating income in the fourth quarter was $118.4 million on anSEC-reported basis and $120.5 million on an adjusted basis, comparedwith operating income of $84.9 million on both an SEC-reported andadjusted basis in the year-earlier period. Operating income was up 40percent on an SEC-reported basis and rose 42 percent on an adjustedbasis (49 percent constant dollar). Excluding a restructuring chargeof $36.9 million in adjusted results in the year-earlier period,adjusted operating income decreased 1 percent on a reported basis andincreased 4 percent constant Dollar in the 2005 fourth quarter.

Adjusted results for the fourth quarter of 2005 exclude a chargeof $2.1 million associated with the terminated merger of IMS and VNUN.V., certain net pre-tax income items totaling $6.6 million(including a $15.0 million payment from VNU to reimbursemerger-related fees), and certain net tax provisions of $9.2 million.

Adjusted results for the 2004 fourth quarter exclude certain netpre-tax expense items totaling approximately $1.8 million, as well ascertain net tax provisions of approximately $3.7 million. See Tables 5and 7 for a reconciliation between SEC and adjusted results for thequarters ended December 31, 2005 and 2004, respectively.

Year-to-Date Results

For the year ended December 31, 2005, revenues were $1,754.8million, up 12 percent on both a reported and constant-dollar basisover prior year. Diluted earnings per share on an SEC-reported basisfor the full-year 2005 was $1.22, compared with $1.20 in 2004, up 2percent. Adjusted diluted earnings per share for the full year was$1.38, a 17 percent increase over the $1.18 reported in 2004. On anSEC-reported basis, net income for the 2005 full year was $284.1million, compared with $285.4 million for 2004. On an adjusted basis,net income for 2005 was $320.6 million, up 14 percent, compared withadjusted net income of $280.8 million for the same period last year.

Operating income for the 2005 full year was $420.8 million on anSEC-reported basis and $438.7 million on an adjusted basis, comparedwith $386.5 million on both an SEC-reported and adjusted basis in theyear-earlier period. Adjusted operating income in 2005 excludes acharge of $17.9 million for costs associated with the terminated IMSand VNU merger. Operating income in 2005 rose 9 percent on anSEC-reported basis. Adjusted operating income increased 14 percent onboth a reported and constant-dollar basis in 2005. Excluding therestructuring charge of $36.9 million in adjusted results in theyear-earlier period, adjusted operating income increased 4 percent onboth a reported and constant-dollar basis for the 2005 full year.

Adjusted results for 2005 full year exclude the merger-relatedcosts mentioned above and certain net pre-tax income items totalingapproximately $21.7 million (including a $15.0 million payment fromVNU to reimburse merger-related fees), as well as certain net taxprovisions of approximately $40.3 million, primarily related to the$40.6 million tax expense recorded in the 2005 full year on cashrepatriated under the American Jobs Creation Act of 2004 (AJCA).Adjusted results in 2004 exclude certain net pre-tax income items ofapproximately $7.7 million and certain net tax benefits ofapproximately $3.1 million. See Tables 6 and 8 for a reconciliationbetween SEC and adjusted results for the twelve months ended December31, 2005 and 2004, respectively.

Balance Sheet Highlights

IMS's cash, cash equivalents and short-term marketable securitiesas of December 31, 2005 was $362.9 million, compared with $460.0million on December 31, 2004. Total debt as of December 31, 2005 was$611.4 million, down from $626.7 million at the end of 2004. See Table9 for selected consolidated balance sheet items.

Shares Outstanding, Share Repurchase Program

The number of shares outstanding as of December 31, 2005 wasapproximately 228.0 million, compared with 229.1 million as ofDecember 31, 2004. Option exercises totaled approximately 8.7 millionshares in 2005. IMS reinstated its share buyback program following thetermination in November, 2005 of the proposed merger with VNU. In thefourth quarter, 4.0 million shares were repurchased at a total cost of$98.6 million.

Repatriation

On April 19, 2005, IMS announced that it was taking theopportunity provided by the AJCA to repatriate $647 million ofpreviously undistributed foreign earnings. IMS completed therepatriation as planned in the 2005 fourth quarter.

About IMS

Operating in more than 100 countries, IMS Health is the world'sleading provider of market intelligence to the pharmaceutical andhealthcare industries. With $1.8 billion in 2005 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. ET today to discussits fourth-quarter and full-year 2005 financial results. Toparticipate, please dial 1-800-895-7761 (U.S. and Canada) and1-212-896-6053 (outside the United States and Canada) approximately 15minutes before the scheduled start of the call. The conference callalso will be accessible live on the Investor Relations section of theIMS Website at www.imshealth.com. Prior to the conference call, a copyof this press release and any other financial or statisticalinformation presented during the call will be made available in the"Investors" area of IMS's Website.

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 21281822.

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, and (vi)deterioration in economic conditions, particularly in thepharmaceutical, healthcare or other industries in which IMS Health'scustomers operate. Additional information on factors that may affectthe business and financial results of the Company can be found infilings of the Company made from time to time with the Securities andExchange Commission.

Table 1
IMS Health
SEC Income Statement (a)
Three Months Ended December 31
(unaudited, in millions except per share)

2005 2004 % Fav
SEC SEC (Unfav)
---------------------
Revenue (b)
Sales Force Effectiveness $232.4 $215.4 8 %
Portfolio Optimization 129.2 123.5 5
Launch, Brand and Other 116.1 104.8 11
------ ------ -------
Total 477.7 443.7 8

Operating Expenses (c)
Operating Costs (203.5)(186.7) (9)
Selling and Administrative (125.8)(109.1) (15)
Depreciation and Amortization (28.0) (26.2) (7)
Severance, Impairment & other charges (d) 0.0 (36.9) NM
Merger Costs (g) (2.1) 0.0 NM
------ ------ -------
Total (359.3)(358.8) 0

Operating Income 118.4 84.9 40

Interest Income (Expense), net 0.4 (3.4) NM
Gains from investments, net (f) 2.1 1.2 77
Other Income (Expense), net (h) 15.9 (8.7) NM
Gain (Loss) on issuance of investees' stock,
net (e) 0.0 (0.1) NM
Gain on Sale of TriZetto (e) 0.0 38.8 NM
------ ------ -------
Pretax Income 136.8 112.6 21

Provision for Income Taxes (i) (47.3) (39.8) (19)
TriZetto Equity Income, net (e) 0.0 0.8 NM
------ ------ -------
Net Income $ 89.4 $ 73.6 22

Diluted EPS:
Total Diluted EPS $ 0.38 $ 0.32 19 %

Shares Outstanding:
Weighted Average Diluted 233.4 233.4 0 %
End-of-Period Actual 228.0 229.1 1

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


Table 2
IMS Health
SEC Income Statement (a)
Twelve Months Ended December 31
(unaudited, in millions except per share)

2005 2004 % Fav
SEC SEC (Unfav)
-------------------------
Revenue (b)
Sales Force Effectiveness $847.7 $778.9 9 %
Portfolio Optimization 501.2 459.1 9
Launch, Brand and Other 405.9 331.0 23
-------- -------- -------
Total 1,754.8 1,569.0 12

Operating Expenses (c)
Operating Costs (776.0) (668.1) (16)
Selling and Administrative (435.4) (384.0) (13)
Depreciation and Amortization (104.6) (93.5) (12)
Severance, Impairment & other charges(d) 0.0 (36.9) NM
Merger Costs (g) (17.9) 0.0 NM
-------- -------- -------
Total (1,334.0)(1,182.6) (13)

Operating Income 420.8 386.5 9

Interest Income (Expense), net (12.7) (11.7) (9)
Gains from investments, net (f) 4.7 11.9 (60)
Other Income (Expense), net (h) 41.4 (10.9) NM
Gain (Loss) on issuance of investees' stock,
net (e) 0.0 (0.2) NM
Gain from sale of TriZetto (e) 0.0 38.8 NM
-------- -------- -------
Pretax Income 454.3 414.4 10

Provision for Income Taxes (i) (170.2) (129.2) (32)
TriZetto Equity Income, net (e) 0.0 0.2 NM
-------- -------- -------
Net Income $ 284.1 $ 285.4 0

Diluted EPS:
Total Diluted EPS $ 1.22 $ 1.20 2 %

Shares Outstanding:
Weighted Average Diluted 232.5 237.7 2 %
End-of-Period Actual 228.0 229.1 1

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


Table 3
IMS Health
Adjusted Income Statement (a)
Three Months Ended December 31
(unaudited, in millions except per share)

Constant
$
2005 2004 % Fav Growth
Adjusted Adjusted (Unfav) (k)
---------------------------------
Revenue (b)
Sales Force Effectiveness $ 232.4 $ 215.4 8 % 12 %
Portfolio Optimization 129.2 123.5 5 9
Launch, Brand and Other 116.1 104.8 11 16
-------- -------- ------- ------
Total 477.7 443.7 8 12

Operating Expenses (c)
Operating Costs (203.5) (186.7) (9)
Selling and Administrative (125.8) (109.1) (15)
Depreciation and Amortization (28.0) (26.2) (7)
Severance, Impairment & other
charges (d) 0.0 (36.9) NM
-------- -------- -------
Total (357.3) (358.8) 0

Operating Income 120.5 84.9 42 49

Interest Income (Expense), net 0.4 (3.4) NM
Other Income (Expense), net 11.4 (5.8) NM
Gain on Sale of TriZetto (e) 0.0 38.8 NM
-------- -------- -------
Pretax Income 132.3 114.5 16

Provision for Income Taxes (38.1) (36.1) (6)
TriZetto Equity Income (Loss),
net (e) 0.0 0.8 NM
-------- -------- -------

Net Income $ 94.1 $ 79.2 19 %

Diluted EPS:
Total Diluted EPS $ 0.40 $ 0.34 18 %

Shares Outstanding:
Weighted Average Diluted 233.4 233.4 0 %
End-of-Period Actual 228.0 229.1 1

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


Table 4
IMS Health
Adjusted Income Statement (a)
Twelve Months Ended December 31
(unaudited, in millions except per share)

Constant
$
2005 2004 % Fav Growth
Adjusted Adjusted (Unfav) (k)
---------------------------------
Revenue (b)
Sales Force Effectiveness $ 847.7 $ 778.9 9 % 9 %
Portfolio Optimization 501.2 459.1 9 9
Launch, Brand and Other 405.9 331.0 23 23
-------- -------- ------- ------
Total 1,754.8 1,569.0 12 12

Operating Expenses (c)
Operating Costs (776.0) (668.1) (16)
Selling and Administrative (435.4) (384.0) (13)
Depreciation and Amortization (104.6) (93.5) (12)
Severance, Impairment & other
charges (d) 0.0 (36.9) NM
-------- -------- -------
Total (1,316.0)(1,182.6) (11)

Operating Income 438.7 386.5 14 14

Interest Income (Expense), net (12.7) (11.7) (9)
Gains (Losses) from investments, net
(f) 3.0 0.0 NM
Other Income (Expense), net 21.5 (6.9) NM
Gain on Sale of TriZetto (e) 0.0 38.8 NM
-------- -------- -------
Pretax Income 450.5 406.7 11

Provision for Income Taxes (129.9) (126.1) (3)
TriZetto Equity Income (Loss),
net (e) 0.0 0.2 NM
-------- -------- -------

Net Income $ 320.6 $ 280.8 14 %

Diluted EPS:
Total Diluted EPS $ 1.38 $ 1.18 17 %

Shares Outstanding:
Weighted Average Diluted 232.5 237.7 2 %
End-of-Period Actual 228.0 229.1 1

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 December 31, 2005
(unaudited, in millions except per share)

Adjusted
SEC Q4 Adjustments Q4
---------------------------
Revenue (b)
Sales Force Effectiveness $ 232.4 $ 0.0 $232.4
Portfolio Optimization 129.2 0.0 129.2
Launch, Brand and Other 116.1 0.0 116.1
-------- -------- -------
Total 477.7 0.0 477.7

Operating Expenses (c)
Operating Costs (203.5) 0.0 (203.5)
Selling and Administrative (125.8) 0.0 (125.8)
Depreciation and Amortization (28.0) 0.0 (28.0)
Merger Costs (g) (2.1) 2.1 0.0
-------- -------- -------
Total (359.3) 2.1 (357.3)

Operating Income 118.4 2.1 120.5

Interest Income (Expense), net 0.4 0.0 0.4
Gains (Losses) from investments, net (f) 2.1 (2.1) 0.0
Other Income (Expense), net (h) 15.9 (4.5) 11.4
-------- -------- -------
Pretax Income 136.8 (4.5) 132.3

Provision for Income Taxes (i) (47.3) 9.2 (38.1)
-------- -------- -------

Net Income $ 89.4 $ 4.7 $ 94.1

Diluted EPS:
Total Diluted EPS $ 0.38 $ 0.02 $ 0.40

Shares Outstanding:
Weighted Average Diluted 233.4 0.0 233.4
End-of-Period Actual 228.0 0.0 228.0

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



Table 6
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Twelve Months Ended December 31, 2005
(unaudited, in millions except per share)

Adjusted
SEC FY Adjustments FY
--------- ----------- ---------
Revenue (b)
Sales Force Effectiveness $ 847.7 $ 0.0 $ 847.7
Portfolio Optimization 501.2 0.0 501.2
Launch, Brand and Other 405.9 0.0 405.9
--------- ----------- ---------
Total 1,754.8 0.0 1,754.8

Operating Expenses (c)
Operating Costs (776.0) 0.0 (776.0)
Selling and Administrative (435.4) 0.0 (435.4)
Depreciation and Amortization (104.6) 0.0 (104.6)
Merger Costs (g) (17.9) 17.9 0.0
--------- ----------- ---------
Total (1,334.0) 17.9 (1,316.0)

Operating Income 420.8 17.9 438.7

Interest Income (Expense), net (12.7) 0.0 (12.7)
Gains (Losses) from investments,
net (f) 4.7 (1.7) 3.0
Other Income (Expense), net (h) 41.4 (20.0) 21.5
--------- ----------- ---------
Pretax Income 454.3 (3.7) 450.5

Provision for Income Taxes (i) (170.2) 40.3 (129.9)
--------- ----------- ---------

Net Income $ 284.1 $ 36.5 $ 320.6

Diluted EPS:
Total Diluted EPS $ 1.22 $ 0.16 $ 1.38

Shares Outstanding:
Weighted Average Diluted 232.5 0.0 232.5
End-of-Period Actual 228.0 0.0 228.0

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 December 31, 2004
(unaudited, in millions except per share)

Adjusted
SEC Q4 Adjustments Q4
-------------------------------
Revenue (b)
Sales Force Effectiveness $ 215.4 $ 0.0 $ 215.4
Portfolio Optimization 123.5 0.0 123.5
Launch, Brand and Other 104.8 0.0 104.8
--------- ----------- ---------
Total 443.7 0.0 443.7

Operating Expenses (c)
Operating Costs (186.7) 0.0 (186.7)
Selling and Administrative (109.1) 0.0 (109.1)
Depreciation and Amortization (26.2) 0.0 (26.2)
Severance, Impairment & other
charges (d) (36.9) 0.0 (36.9)
--------- ----------- ---------
Total (358.8) 0.0 (358.8)

Operating Income 84.9 0.0 84.9

Interest Income (Expense), net (3.4) 0.0 (3.4)
Gains from investments, net (f) 1.2 (1.2) 0.0
Other Income (Expense), net (h) (8.7) 2.9 (5.8)
Gain (Loss) on issuance of investees'
stock, net (e) (0.1) 0.1 0.0
Gain on sale of TriZetto (e) 38.8 0.0 38.8
--------- ----------- ---------
Pretax Income 112.6 1.8 114.5

Provision for Income Taxes (i) (39.8) 3.7 (36.1)
TriZetto Equity Income, net (e) 0.8 0.0 0.8
--------- ----------- ---------

Net Income $ 73.6 $ 5.6 $ 79.2

Diluted EPS:
Total Diluted EPS $ 0.32 $ 0.02 $ 0.34

Shares Outstanding:
Weighted Average Diluted 233.4 0.0 233.4
End-of-Period Actual 229.1 0.0 229.1

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


Table 8
IMS Health
Reconciliation from SEC to Adjusted Income Statement (a)
Twelve Months Ended December 31, 2004
(unaudited, in millions except per share)

Adjusted
SEC FY Adjustments FY
--------- ----------- ---------
Revenue (b)
Sales Force Effectiveness $ 778.9 $ 0.0 $ 778.9
Portfolio Optimization 459.1 0.0 459.1
Launch, Brand and Other 331.0 0.0 331.0
--------- ----------- ---------
Total 1,569.0 0.0 1,569.0

Operating Expenses (c)
Operating Costs (668.1) 0.0 (668.1)
Selling and Administrative (384.0) 0.0 (384.0)
Depreciation and Amortization (93.5) 0.0 (93.5)
Severance, Impairment & other
charges (d) (36.9) 0.0 (36.9)
--------- ----------- ---------
Total (1,182.6) 0.0 (1,182.6)

Operating Income 386.5 0.0 386.5

Interest Income (Expense), net (11.7) 0.0 (11.7)
Gains from investments, net (f) 11.9 (11.9) 0.0
Other Income (Expense), net (h) (10.9) 4.0 (6.9)
Gain (Loss) on issuance of investees'
stock, net (e) (0.2) 0.2 0.0
Gain on sale of TriZetto (e) 38.8 0.0 38.8
--------- ----------- ---------
Pretax Income 414.4 (7.7) 406.7

Provision for Income Taxes (i) (129.2) 3.1 (126.1)
TriZetto Equity Income, net (e) 0.2 0.0 0.2
--------- ----------- ---------

Net Income $ 285.4 $ (4.6) $ 280.8

Diluted EPS:
Total Diluted EPS $ 1.20 $ (0.02) $ 1.18

Shares Outstanding:
Weighted Average Diluted 237.7 0.0 237.7
End-of-Period Actual 229.1 0.0 229.1

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


Table 9
IMS Health
Selected Consolidated Balance Sheet Items
(unaudited, in millions)


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

Cash and cash equivalents $ 362.9 $ 444.9

Short-term marketable securities 0.0 15.1

Accounts receivable, net (j) 297.3 264.8

Total debt 611.4 626.7

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 are detailed on
Tables 5, 6, 7 and 8. Adjusted results are those used by
management for the purposes of global business decision-making,
including developing budgets and managing expenditures. Adjusted
results exclude certain U.S. GAAP measures to the extent that
management believes exclusion will facilitate comparisons across
periods and more clearly indicate trends. Although IMS discloses
adjusted results in order to give a full picture to investors of
its business as seen by management, these adjusted results are not
prepared specifically for investors and are not a replacement for
the more comprehensive information for investors included in IMS's
U.S. GAAP results. The method IMS uses to prepare adjusted results
differs in significant respects from U.S. GAAP and is likely to
differ from the methods used by other companies. Investors
interested in management's adjusted results are urged to review
the detailed reconciliations of the adjusted measures to
comparable U.S. GAAP results.

(b) Revenue in 2004 has been reclassified to conform to the 2005
presentation, including a reclassification of Consulting and
Services revenue into the other three business lines. Consulting
and Services revenue was $90.8 million in fourth quarter 2005, up
43% (51% constant dollar) from $63.3 million in fourth-quarter
2004. Consulting and Services revenue was $275.1 million for the
full year 2005, up 50% (51% constant dollar) from $183.9 million
for the year in 2004.

(c) Operating expenses in 2004 reflect a reclassification between
operating costs and selling and administrative expenses to make
them comparable with the 2005 presentation.

(d) IMS incurred $36.9 million of expense in the fourth quarter of
2004 for severance costs related to the termination of
approximately 490 employees.

(e) In the fourth quarter of 2004, IMS Health sold its entire interest
in TriZetto back to TriZetto for a pre-tax gain of $38.8 million.

(f) Gains from investments, net, were $2.1 million in the fourth
quarter of 2005, relating primarily to a gain recorded in the
Enterprise portfolio on the sale of certain Enterprise
investments, partially offset by related management fees and
certain portfolio write downs. This is compared with a net gain of
$1.2 million in the fourth quarter of 2004, due to a $1.7 million
gain on the sale of certain Enterprise investments, partially
offset by fees of $0.4 million for the Enterprise investments. For
the full year 2005, Gains from investments, net, were $4.7 million
relating primarily to a $3.0 million gain from the sale of a 20%
interest we held in a German company (GPI) and $1.7 million of
Enterprise gains, net of management fees for the Enterprise
investments. This is compared with a net gain of $11.9 million in
full year 2004 from the sale of certain Enterprise investments.
These gains and losses from Enterprise investments are excluded
from adjusted results because they relate to non-strategic
investments and are not related to IMS's core business operations.

(g) Merger costs related primarily to professional fees incurred
during the second, third and fourth quarters of 2005 in connection
with IMS's proposed merger with VNU, N.V., as announced on July
11, 2005. These costs, and the associated tax benefits, are
excluded from adjusted results because they were incurred
specifically in relation to the proposed merger of IMS with VNU,
N.V. and are not related to IMS's core business operations. The
proposed merger was terminated in November, 2005.

(h) Other Income (expense), net included $0.0 million and $1.2 million
of expenses for legal fees in the fourth quarter of 2005 and 2004,
respectively, related to IRI litigation. For the full year, IRI
litigation legal fees were $1.2 million and $4.0 million in 2005
and 2004, respectively. These expenses are excluded from adjusted
results because they relate to a D&B legacy matter and are not
related to IMS's core business operations. Other income (expense),
net also included a $15.0 million payment from VNU received in the
fourth quarter of 2005 on the termination of the proposed merger
to reimburse merger-related fees. This payment and the associated
tax provision are excluded from adjusted results (see note (g)).
Other income (expense), net also included a $6.2 million foreign
currency gain related to the repatriation executed in the third
quarter of 2005 under the American Jobs Creation Act of 2004
(AJCA) (see note (i)). This gain is excluded from adjusted results
because AJCA is a one-time event. In addition, other income
(expense), net excluded a quarterly phasing adjustment of foreign
currency hedge gains of $10.5 million in the fourth quarter of
2005, compared with $1.7 million phasing adjustment in the fourth
quarter of 2004. This phasing adjustment is made to adjusted
results in order to more closely match the timing of foreign
exchange hedge gains (losses) with the operating income being
hedged. For the full year, there is no difference between the
hedge gains (losses) in adjusted and SEC results.

(i) The tax provision for the fourth quarter and full year of 2005
included a tax provision of $0.5 million and a tax benefit of $0.3
million, respectively, related to the Enterprise investments
described in note (f) and the items described in notes (g) and
(h). The tax provision for the fourth quarter and full year 2004
included a tax benefit of $0.2 million and tax provision of $3.1
million, respectively, related to the items described in notes (f)
and (h). These tax provisions are excluded from adjusted results
because the related charges and gains are excluded from adjusted
results. The tax provision in full year 2005 also included a $29.3
million tax benefit related to a favorable audit resolution in
Japan of the tax years through 2003. Adjusted results included a
phasing adjustment to recognize this benefit ratably throughout
the year; the phasing adjustment for the fourth quarter of 2005
was $7.6 million. This phasing adjustment allows the full year
effective tax rate to be applied in each quarter to adjusted
pretax results. Also for the full year 2005, $40.6 million of tax
expense was recorded related to the decision to repatriate $647
million of foreign earnings back to the U.S. during 2005 under the
AJCA, of which $1.1 million expense was recorded in the fourth
quarter. As the AJCA is a one-time event, this tax expense has
been excluded from adjusted results. In addition, the first
quarter 2004 tax provision also included a $15.6 million tax
benefit related to a favorable audit resolution in the U.S. of the
1998 and 1999 tax years. The phasing adjustment for the fourth
quarter of 2004 was $4.0 million.

(j) December 31, 2004 Accounts receivable, net has been reclassified
to conform to current period presentation.

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


Amounts presented in the financial tables may not add due to
rounding.

These financial tables should be read in conjunction with IMS
Health's filings previously made or to be made with the
Securities and Exchange Commission.