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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

Commission file number: 001-14049

IMS Health Incorporated
(Exact name of registrant as specified in its charter)

(Former name, former address and former fiscal year, if changed since last report)

          Securities registered pursuant to Section 12(b) of the Act:

          Securities registered pursuant to Section 12(g) of the Act: None

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

          As of June 30, 2009, the aggregate market value of the registrant's Common Stock held by non-affiliates of the registrant was approximately $2,316 million based on the closing transaction price on the New York Stock Exchange Composite Tape.

          Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

          None.

TABLE OF CONTENTS

The Index to Exhibits is located on Pages 183 to 195.

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PART I

        Except where the context indicates otherwise, when we use the terms "IMS," "Company," "we," "us" and "our," we mean IMS Health Incorporated and all subsidiaries consolidated in the financial statements contained or incorporated by reference herein. Dollars in thousands, except per share data.

Item 1.    Business

        IMS is the leading global provider of market intelligence to the pharmaceutical and healthcare industries. We offer leading-edge market intelligence products and services that are integral to our clients' day-to-day operations, including product and portfolio management capabilities; commercial effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve productivity and the delivery of quality healthcare worldwide. Our information products are developed to meet client needs by using data secured from a worldwide network of suppliers in more than 100 countries. Our business lines are:

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Commercial Effectiveness to increase clients' productivity across end-to-end sales, marketing, promotional and performance management processes;



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Product and Portfolio Management to provide clients with insights into market measurement so they can optimize their product portfolio and strategies; and



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New Business Areas that support pharmaceutical client business initiatives in managed markets, consumer health, and pricing and market access, and that also serve payer and government audiences.

        Within these business lines, we provide consulting and services that use in-house capabilities and methodologies to assist clients in analyzing and evaluating market trends, strategies and tactics, and to help in the development and implementation of customized software applications and data warehouse tools.

        IMS was incorporated under the laws of the State of Delaware in 1998 and we operate in more than 100 countries.

        Segment financial information, including financial information about domestic and foreign generated revenue, is set forth in Note 18 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

        Additional information regarding changes to and the development of our business is contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures about Market Risk" and in the Notes to the Consolidated Financial Statements in Part II, Items 7, 7A and 8 of this Annual Report on Form 10-K.

IMS

        We provide critical business intelligence, including information, analytics and consulting services to the pharmaceutical and healthcare industries worldwide. Our market intelligence products and services serve our clients' needs which we group into three broad areas: commercial effectiveness, product and portfolio management, and new business areas. We provide information services covering more than 100 countries and maintain offices in 75 countries on six continents, with approximately 63% of our total 2009 revenue generated outside the U.S.

THE MERGER AGREEMENT

        On November 5, 2009, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Healthcare Technology Holdings, Inc., a Delaware corporation ("Parent"), and Healthcare Technology Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of Parent

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("Merger Sub"), providing for the merger of Merger Sub with and into IMS (the "Merger"), with IMS surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of TPG Capital, L.P. ("TPG") and Canada Pension Plan Investment Board ("CPPIB").

        On February 8, 2010, a special meeting of our stockholders was held (the "Special Meeting"). At the Special Meeting our stockholders approved the proposal presented at the Special Meeting to adopt the Merger Agreement.

        At the effective time of the Merger, each share of our Common Stock issued and outstanding (except for certain shares held by Parent, us and certain of our subsidiaries, and shares held by stockholders who have properly demanded appraisal rights) will convert into the right to receive the per share Merger consideration of $22.00 in cash, without interest, less any applicable withholding taxes.

        The respective obligations of IMS, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including without limitation the absence of any law enacted, issued, enforced or entered by any court or governmental entity of competent jurisdiction that restrains, enjoins or otherwise prohibits the consummation of the Merger or otherwise makes consummation of the Merger illegal, the accuracy of representations and warranties (subject to customary materiality qualifiers) made by the parties to the Merger Agreement, and compliance, in all material respects, with the parties' respective covenants and agreements contained in the Merger Agreement at or prior to the date of the closing of the Merger. The consummation of the Merger is subject to certain other conditions which, as of the date of this Annual Report on Form 10-K, have been satisfied. Completion of the Merger is expected to occur by the end of the first quarter of 2010.

        We anticipate that the total funds needed to complete the Merger will be approximately $5,900,000. We expect this amount to be funded through a combination of:

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equity financing of approximately $2,800,000 to be provided or secured by investment funds affiliated with TPG and a wholly owned subsidiary of CPPIB, or other parties to whom they assign a portion of their commitments;



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a $2,000,000 senior secured term loan facility;



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the issuance of $1,000,000 in principal amount of senior unsecured notes (supplemented, if some or all of those notes cannot be sold at closing, by a senior unsecured term loan facility); and



•

approximately $100,000 of cash on hand of IMS.

Parent has obtained equity and debt financing commitments. The funding under those commitments is subject to conditions, including conditions that do not relate directly to the Merger Agreement.

        Pursuant to a limited guarantee delivered by TPG Partners V, L.P., TPG Partners VI, L.P. and CPP Investment Board Private Holdings Inc. (collectively, the "Guarantors") in favor of IMS, dated November 5, 2009, the Guarantors have agreed to guarantee, severally but not jointly, the due and punctual performance and discharge of the obligations of Parent and Merger Sub under the Merger Agreement to pay a termination fee of $275,000 to us, as and when due, the direct expenses incurred by Parent or Merger Sub in connection with the arrangement of the financing of the Merger, and certain reimbursement obligations of Parent and Merger Sub with respect to IMS, which direct expenses and reimbursement obligations shall not in the aggregate exceed $6,000.

        The Merger Agreement contains certain termination rights for IMS and Parent. If the Merger Agreement is terminated, under certain specified circumstances in the Merger Agreement, we may be required to pay a termination fee equal to $115,000, in addition to reimbursing Parent for all out-of-pocket fees and expenses incurred by Parent or Merger Sub in connection with the Merger Agreement or the transactions contemplated therein up to $5,000. In the event we terminate the Merger Agreement due to certain actions or inactions by Parent, Parent must pay us a fee of $275,000,

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less the sum of amounts paid by Parent with respect to Parent's liability for certain reimbursement obligations and certain direct expenses incurred by Parent in connection with the financing up to $6,000 in the aggregate.

        For further information regarding the Merger Agreement, please refer to the Merger Agreement and the Definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission ("SEC") by IMS on December 29, 2009, which are incorporated by reference as exhibits to this Annual Report on Form 10-K.

        Factual disclosures about IMS contained in this Annual Report on Form 10-K or in our other public reports filed with the SEC may supplement, update or modify the factual disclosures about IMS contained in the Merger Agreement and the Definitive Proxy Statement on Schedule 14A filed with the SEC by IMS on December 29, 2009. The representations, warranties and covenants made in the Merger Agreement by IMS, Parent and Merger Sub were qualified and subject to important limitations agreed to by IMS, Parent and Merger Sub in connection with negotiating the terms of the Merger Agreement. In particular, the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the Merger Agreement may have the right not to close the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by each party to the other, which disclosures were not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Annual Report on Form 10-K, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this Annual Report on Form 10-K.

OUR PRODUCTS AND SERVICES

        COMMERCIAL EFFECTIVENESS OFFERINGS.    Our Commercial Effectiveness Offerings represented approximately 51% of our worldwide revenue in 2009. Using a total solutions approach, IMS Commercial Effectiveness drives smart business decisions, shapes sales management and marketing strategies, and supports sales processes. Offering actionable insight for markets worldwide, services within the Commercial Effectiveness business area provide in-depth intelligence that supports the planning, development and execution of critical business processes, including segmentation, sales force sizing and deployment, performance assessment and compensation, and territory management.

        Commercial Effectiveness Offerings provide our clients with valuable insight as to which physicians are seeing significant numbers of patients that are likely to benefit from a specific therapy. These innovative solutions facilitate the optimization of market share and revenue potential using sub-national prescription patterns, easy-to-use access tools, and an array of consulting services. These capabilities enable fast and effective communication of vital information that can accelerate meaningful innovation, public safety news alerts in the event of inappropriate prescribing and drug recalls, as well as the appropriate distribution of samples. IMS Commercial Effectiveness informs critical business decisions and optimizes overall performance. Our Commercial Effectiveness Offerings provide the in-depth information, market intelligence and analysis that enhance the efficient allocation of resources in a manner that reduces cost and saves valuable time.

        Our principal Commercial Effectiveness Offerings are as follows:

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Sales Territory Reporting.  Sales territory reporting is the principal sales management service that we offer to our pharmaceutical clients. Sales territory reports can be precisely tailored for each

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client and measure the sales of a client's own products and those of competitors within specified geographical configurations. These reports are designed to provide marketing and sales managers with a reliable measurement of each salesperson's activity and effectiveness in his or her sales territory. Our sales territory reporting services cover more than 50 countries and are used by our customers for applications such as sales-force compensation, resource allocation, territory alignment, market analyses and distribution management. We make reports available to clients in a variety of frequencies, such as on a weekly, monthly and quarterly basis.

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Prescription Tracking Reporting.  Our prescription tracking reporting services are designed to monitor prescription activity and to track the movement of pharmaceutical products out of retail channels. Prescription tracking services are used by pharmaceutical companies to facilitate product marketing at the prescriber level. In the U.S., our Xponent® service monitors prescription activity from retail pharmacies, long-term care and mail service pharmacies using a patented statistical methodology to project the prescription activity of nearly 1.4 million individual prescribers on a weekly and monthly basis. The European Xponent database is built from prescription data collected from retail pharmacies and coding centers, which are linked to the geographical area in which the prescription was written. Xponent is available in over 10 countries. We also offer Early View^TM, a sales optimization solution, providing weekly prescriber level activity, highlighting competitive prescribing trends for clients' key prescribers directly to clients' sales representatives electronically.



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Sales & Account Management Consulting and Services.  Our Sales & Account Management practice focuses on helping customers assess the effectiveness of their sales strategies and better design and deploy their sales forces. Using evidence-based research, our offerings in this practice help clients better segment their customer base, determine the optimal size and structure of their sales force based on that segmentation, and design call plans that optimally deploy the various sales resources across channels to better meet their customers' needs and increase their sales force effectiveness. Our Information Management practice helps clients organize, integrate, warehouse and analyze valuable data assets from multiple sources. We also provide Client Services within this business line. Along with product set-up, installation and implementation, Client Services provides customer training and a variety of ongoing, post-sales services.



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Promotional Audits and Promotion Management Consulting.  Our promotional audits contain national estimates of pharmaceutical promotional activities for individual branded products, including sales-force promotion and journal and mail advertising, based on information received from panels of physicians and from monitoring medical journals and direct mail. In the U.S., spending on direct-to-consumer advertising is also measured. IMS currently publishes promotional audit reports covering approximately 10 countries and over 90% of the promoted markets. This evidential information is used by our consulting teams to help clients evaluate and optimize the allocation and effectiveness of their promotional messages, mix and delivery around the globe.



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Launch and Brand Management Offerings.  We combine information, analytical tools and consulting and services to address client needs relevant to the management of each stage of the life cycle of their pharmaceutical brands. The areas covered include: brand planning, which helps clients with market assessment and forecasting, market segmentation and product positioning; promotion management, which helps clients measure, assess effectiveness and optimize promotion investment, channel mix and messaging; and, performance management, which helps clients measure diagnosis and optimization for new product launches and in-line brands.

        PRODUCT AND PORTFOLIO MANAGEMENT OFFERINGS.    Product and Portfolio Management Offerings represented approximately 31% of our worldwide revenue in 2009. IMS Product and Portfolio Management provides customers with the intelligence and tools to identify and optimize

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pharmaceutical product portfolios, including currently marketed products and the new product pipeline. Providing a comprehensive range of offerings, Product and Portfolio Management enables customers to evaluate, assess, understand, and implement strategies and tactics to improve bottom-line performance and set the course for the future. Integrating prescriptions, sales, disease/treatment, and industry intelligence, Product and Portfolio Management services provide a comprehensive picture of the worldwide market. From a national viewpoint down to regional and local level data, customers can complete a thorough market analysis, exploring all options to set the pace for brand leadership. Using in-depth business intelligence, analysis and forecasting, IMS offerings provide customers with the facts, interpretation and guidance to make the best portfolio optimization decisions.

        Our principal Product and Portfolio Management Offerings include the following:

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Pharmaceutical Audits.  These audits measure the sale of pharmaceutical products into pharmacies, supplemented in some countries by data collected from dispensing physicians, retail chains and discount stores. These audits contain data projected to national estimates, showing product sales by therapeutic class broken down by package size and dosage form. We publish pharmaceutical audits covering approximately 80 countries.



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Medical Audits.  These audits are based on information collected from panels of practicing office-based physicians and contain projected national estimates of the number of consultations for each diagnosed disease with details of the therapy prescribed. These audits also analyze the use physicians make of individual drugs by listing the diseases for which they are prescribed, the potential therapeutic action the physician is expecting, other drugs prescribed at the same time, and estimates of the total number of drugs used for each disease. We publish medical audits covering over 40 countries.



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Hospital Audits.  These audits contain data projected to national and regional estimates and show the sale of pharmaceutical products to hospitals by therapeutic class. Related reports provide audits of laboratory diagnostic supplies, hospital supplies and hospital records. We publish hospital audits covering approximately 50 countries.



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Prescription Audits.  These audits contain projected national estimates of the rate at which drugs move out of the pharmacy and into the hands of the consumer. They measure what is actually dispensed at the pharmacy. We publish prescription audits covering over 15 countries.



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MIDAS® Services.  MIDAS is an on-line multinational integrated data analysis tool that harnesses our worldwide databases and is used by the pharmaceutical industry to assess and analyze global pharmaceutical information and trends in multiple markets. Our MIDAS Quantum offering gives clients on-line access to pharmaceutical, medical, promotional and chemical data that we compile. Using MIDAS Quantum, our clients are able to view information from the national databases compiled by us and produce statistical reports in the format required by the client. MIDAS contains information covering more than 70 countries.



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LifeLink Services.  These services provide longitudinal analyses of anonymized prescription and/or medical records. Clients use them to understand detailed treatment patterns, disease progression, therapeutic switching and concomitant disease/treatments. We have LifeLink services in approximately 10 countries.



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Oncology Analyzer and Consulting.  Our Oncology Analyzer audit collects longitudinal patient information regarding the diagnosis and treatment in the critical area of Oncology across the major pharmaceutical markets. This information helps clients understand markets, treatment patterns and patient opportunities and is used by clients and by our consulting teams to help clients plan and execute successful market entry and life cycle management strategies for their Oncology franchises.

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Forecasting Portfolio.  Our forecasting portfolio includes both syndicated and customizable, single or multi-country forecasts of 'demand' and/or market performance for individual brands or therapy categories. These offerings bring together extensive analytical and methodological expertise from our consulting teams with the rich global information assets of IMS to provide clients with accurate and long-term views of their portfolios.



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Other Product and Portfolio Management Reports.  These include Market Research Publications including the Pharmaceutical World Review^TM; personal care reports, which estimate the sale of medical surgical device product purchases; and reports on bulk chemical shipments and molecules for research and development. We have developed, in certain countries, disease and treatment information at the patient level (in which information is not identifiable at the individual patient level) that gives participants in the healthcare industry new insights into the treatment of diseases. The availability, scope and frequency of the foregoing reports vary on a country-by-country basis.



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Consulting & Services.  Consultants in our Management Consulting group bring a unique mix to management of complex portfolios with deep expertise in key therapies and all aspects of pharmaceutical strategies. Product and Portfolio Strategy leverages the best cross functional understanding of scientific and commercial trends, deep competencies in decision theory and portfolio analysis, forecasting, competitive intelligence and industry thought leadership to help clients make strategic decisions. We help clients value difficult-to-value assets, gain clarity on a complex mix of decisions with a focused view of strategy, with emphasis on alternatives and risks in the face of uncertainty.

        NEW BUSINESS AREAS.    Offerings in New Business Areas represented approximately 18% of our worldwide revenue in 2009 and support pharmaceutical client business initiatives in managed markets, consumer health, and pricing and market access, and also serve payer and government audiences.

        The principal offerings under the New Business Areas business line include:

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Pricing and Market Access Consulting.  This portfolio of offerings has two main components, both of which provide clients with critical, relevant insights needed to maximize the lifetime value of their brands and leverage the deep and rich information assets of IMS and, in particular, our LifeLink information.



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Health Economics and Outcomes Research Offerings.  Our Health Economics and Outcomes Research Offerings help clients demonstrate the value of their medicines using our suite of evidence-based health economic evaluations and real world outcomes on a globally consistent basis. Clients can access our LifeLink information to support product evaluations and help them maximize market access.



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Pricing and Reimbursement Offerings.  Through our consulting teams, we help clients to achieve optimal reimbursed prices for new products, ensuring the shortest timeframe to market, which contribute to rapid and broad market penetration.



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Managed Markets.  Our Managed Markets Offerings provide an array of information and consulting insights to quantify the effects of managed markets on the pharmaceutical and healthcare industries. Managed Markets Offerings are used by clients to assist in evaluating the impact of managed markets on the pharmaceutical marketplace and in enhancing the performance of their products through better contracting strategies, formulary management and tracking, plan performance tracking and monitoring plan relationships with organizations, such as large medical groups, that may influence prescribing behavior. The types of reports include measurement of prescriptions at the plan level, formulary assessment and tracking, and tracking of prescription payment by type, such as cash, Medicaid or third-party payment. This service is

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available both in the U.S. and Canada. In addition, to address emerging Medicare needs in the U.S., we make the following services available to our clients: strategic consulting, tactical consulting, rebate validation and performance evaluation. IMS also provides services that assist pharmaceutical clients with drug rebate data validation and adjudication of Managed Care and Medicare Part D contracts.

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Consumer Health.  Our consumer health services provide detailed product movement, market share and pricing information for over-the-counter, personal care, patient care and nutritional products. Consumer Health Offerings assist over-the-counter and pharmaceutical manufacturers in understanding consumer purchasing dynamics and promotional impact, examining and assessing segmentation and sales force management, strategic business planning, market opportunity and performance management. We publish reports on the global consumer health market and provide related services. PharmaTrend is our tracking service for consumer purchases of healthcare products.



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Payer Solutions.  Our Payer Solutions offerings help clients deliver more cost-effective, efficient business processes by helping them understand the actual practice and consumption of healthcare services. Our solution suite provides targeted intelligence in the following areas: Network Intelligence, Pharmacy Management, Medical Management, Members Service and Informatics.



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Government Solutions.  We provide clients—including federal, state, and local government or regulatory agencies in the U.S.—with data, analytics, tools and services that facilitate healthcare operations and strategic decision making.

OUR DATA SUPPLIERS

        Over the past five decades, we generally have developed and maintained strong relationships with our data suppliers in each market in which we operate. We have historical connections with many of the relevant trade associations and professional associations, including for example, in the U.S., where we have been designated as a database licensee by the American Medical Association (referred to in this document as AMA) for use and sublicensing of the AMA's physician database. As the supply of pharmaceutical data is critical to our business, we devote significant human and financial resources to our data collection efforts.

OUR CUSTOMERS

        Sales to traditional pharmaceutical companies accounted for approximately 85% of our revenue in 2009. All major pharmaceutical and biotechnology companies are our customers, and many of these companies subscribe to reports and services in several countries. Our customer base is broad in scope and enables us to avoid dependence on any single customer. None of our customers accounted for more than 7% of our gross revenues in 2009, 2008 or 2007.

OUR COMPETITION

        While no competitor provides the geographical reach or breadth of our services, we generally compete in the countries in which we operate with other information services companies, as well as with the in-house capabilities of our customers. Generally, competition has arisen on a country-by-country basis. In Europe, certain of our services compete with those offered by competitors such as Taylor Nelson and Cegedim in various European countries, in addition to competition from smaller niche competitors in various local markets. In the U.S., certain of our sales management services, including our sales territory and prescription tracking reports, compete with the offerings of various companies, particularly Wolters Kluwer. Also, various companies compete with us in the U.S. with respect to our market research services, including SDI. Our consulting and services businesses compete with various consulting firms around the world. Service, quality, coverage and speed of delivery of information services and products are the principal differentiators in our markets.

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OUR INTELLECTUAL PROPERTY

        We create, own and maintain a wide array of intellectual property assets which, in the aggregate, are of material importance to our business. Our intellectual property assets include patents and patent applications related to our innovations, products and services; trademarks related to our brands, products and services; copyrights in software and databases; trade secrets relating to data processing, statistical methodologies, editing and bridging techniques, business rules and other aspects of the IMS business; and other intellectual property rights and licenses of various kinds. We are licensed to use certain technology and other intellectual property rights owned and controlled by others, and similarly, other companies are licensed to use certain technology and other intellectual property rights owned and controlled by us.

        We seek to protect our intellectual property assets through patent, copyright, trade secret, trademark and other laws of the U.S. and other jurisdictions, and through confidentiality procedures and contractual provisions. A patent generally has a term of twenty years from the time the full patent application is filed. As IMS builds a patent portfolio over time, the terms of individual patents will vary. While patents can help maintain the competitive differentiation of certain products and services and maximize the return on research and development investments, no single patent is in itself essential to the IMS business as a whole or any of our principal business segments. Further, in order to replace expiring patents and licenses or replace obsolete intellectual property, we obtain new intellectual property through a combination of our ongoing research and development activities, acquisitions of other companies and licensing of intellectual property from third parties. We enter into confidentiality and invention assignment agreements with employees and contractors, and non-disclosure agreements with third parties with whom we conduct business, in order to secure ownership rights to, limit access to, and restrict disclosure of our proprietary information.

        The technology and other intellectual property rights owned and licensed by us are of importance to our business, although our management believes that our business, as a whole, is not dependent upon any one intellectual property or group of such properties. We consider the IMS trademark and related names, marks and logos to be of material importance to our business, and we have registered these trademarks in the U.S. and other jurisdictions and aggressively seek to protect them.

        The names of our products and services referred to in this document are trademarks, service marks, registered trademarks or registered service marks owned by or licensed to us.

OUR EMPLOYEES

        We had approximately 7,250 employees worldwide as of December 31, 2009. Almost all of these employees are full-time. None of our U.S. employees are represented by a union. In Belgium, France, Germany, Italy, the Netherlands and Spain, we have Works Councils, which are a legal requirement in those countries. We also have a European Works Council, which is a requirement under European Union laws. Management considers its relations with our employees to be good and to have been maintained in a normal and customary manner.

Available Information

        We make available free of charge on or through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act"), as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Also posted on our website, and available in print upon the request of any shareholder to our Investor Relations Department, are our certificate of incorporation and by-laws, the charters for our Audit Committee, Human Resources Committee and Nominating and Governance Committee, our Corporate Governance Guidelines, our Policy on Business

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Conduct governing our directors, officers and employees, our Code of Ethics for Principal Executive Officer and Senior Financial Officers, our Guidelines for Determining Director Independence and our Policy and Procedures Governing Related-Person Transactions. Within the time period required by the SEC and the New York Stock Exchange ("NYSE"), we will post on our website any amendment to the Policy on Business Conduct or the Code of Ethics for Principal Executive Officer and Senior Financial Officers or any waiver of either such policy applicable to any of our senior financial officers, executive officers or directors. In addition, our website includes information concerning purchases and sales of our equity securities by our executive officers and directors, as well as disclosure relating to certain non-GAAP financial measures (as defined in the SEC's Regulation G) that we make public orally, telephonically, by webcast, by broadcast or similar means. Our Internet address is http://www.IMSHEALTH.com and the information described above can be found in the Company Information and the Investors sections of that website. Our Investor Relations Department can be contacted at IMS Health Incorporated, 901 Main Avenue, Norwalk, Connecticut 06851, Attn: Investor Relations: (203) 845-5200, e-mail: askir@imshealth.com.

Item 1A.    Risk Factors

        In addition to the other information included or incorporated by reference into this Annual Report on Form 10-K, including the matters addressed under the caption "Forward-Looking Statements," set forth below are some of the risks and uncertainties that, if they were to occur, could materially adversely affect our business or that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report and other public statements we make.

Our data suppliers might restrict our use of or refuse to license data, which could lead to our inability to provide certain products or services.

        Our products and services incorporate data that we collect from third parties. These suppliers of data may increase restrictions on our use of such data, fail to adhere to our quality control standards or refuse altogether to license the data to us. For example, in 2002 certain of our data suppliers in Japan began withholding certain data from us. This interruption in data supply led us to discontinue one of our Japanese products and adversely affected our operating results. If the suppliers of a significant amount of data that we use for one or more of our products or services were to impose additional contractual restrictions on our use of or access to data, fail to adhere to our quality control standards, or refuse to provide data, now or in the future, our ability to provide products and services to our clients could be materially adversely impacted, which could result in decreased revenue, net income and earnings per share.

Laws restricting the use of information may restrict our product and service offerings.

        We provide several product and service offerings to clients in the U.S. that involve the license, use and transfer of prescriber-identifiable information for commercial purposes. New Hampshire, Vermont and Maine have passed laws placing certain restrictions on the license, use or transfer of such information for commercial purposes. We challenged all three laws in Federal court, asking the courts to declare these laws unconstitutional.

•

With respect to the New Hampshire law, the Federal District Court in Concord, New Hampshire ruled on April 30, 2007 that the law violated the First Amendment and was therefore unconstitutional and enjoined its enforcement. However, that decision was overturned by the U.S. Court of Appeals for the First Circuit, which declared the law constitutional. The appeals court vacated the lower court's injunction and the New Hampshire statute became effective on February 9, 2009. On March 27, 2009, we filed a petition for certiorari to the U.S. Supreme Court asking that the Supreme Court review the appeals court's decision in this matter. On

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June 29, 2009, the Supreme Court announced that it would not hear the case. We have modified our offerings and believe we are operating in compliance with the New Hampshire law.

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With respect to the Maine law, the Federal District Court in Bangor, Maine issued a preliminary injunction on December 21, 2007, prohibiting enforcement of the Maine law. The Maine Attorney General has appealed the preliminary injunction ruling to the U.S. Court of Appeals for the First Circuit.



•

With respect to the Vermont law, the Federal District Court in Brattleboro, Vermont held a full trial ending on August 1, 2008. On April 23, 2009 the court issued its decision upholding the Vermont law. We appealed the district court's decision to the U.S. Court of Appeals for the Second Circuit. The data restrictions in the Vermont law became effective on July 1, 2009. We have modified our offerings and believe we are operating in compliance with the Vermont law.

        These three states collectively represent approximately one percent of prescription activity in the U.S., so the potential financial impact of these laws on our business, financial condition and results of operations is not expected to be material. However, there have been a significant number of state legislative initiatives over the past several years that seek to impose similar restrictions on the commercial use of prescriber-identifiable information. During 2009, these initiatives were introduced in 23 states; all were unsuccessful. As in past years, we expect that these initiatives will be introduced or reintroduced in various states during 2010. We are unable to predict whether, in which states and in what form these initiatives will be introduced or reintroduced or whether the Federal government will seek to enact similar or more restrictive legislation or regulation of such information. In addition, while we will continue to seek to adapt our products and service offerings (including consulting and services offerings) to comply with the requirements of these laws, there can be no assurance that our efforts to adapt our offerings will be successful and provide the same financial contribution to us. There can also be no assurance that these kinds of legislative initiatives will not adversely affect our ability to generate or assemble data or to develop or market current or future offerings, which could, over time, result in a material adverse impact on our revenues, net income and earnings per share.

Data protection and privacy laws may restrict our current and future activities.

        Data protection and privacy laws affect our collection, use, storage and transfer of personally identifiable information both abroad and in the U.S. Compliance with such laws may require investment or may dictate that we not offer certain types of products and services. Failure to comply with such laws may result in, among other things, civil and criminal liability, negative publicity, data being blocked from use and liability under contractual warranties.

        In addition, there is an increasing public concern regarding data protection and privacy issues and the number of jurisdictions with data protection and privacy laws has been increasing. For example, as discussed under "—Laws restricting the use of information may restrict our product and service offerings," laws have been passed in Maine, New Hampshire and Vermont restricting the use of prescriber identifiable data. In addition, there have also been other legislative and regulatory initiatives in the U.S. and abroad in the area of access to medical data. These initiatives tend to seek to place restrictions on the use and disclosure of patient-identifiable information without consent and, in some cases, seek to extend restrictions to non-patient-identifiable information, e.g., prescriber identifiable information, or to the process of anonymizing data. There can be no assurance that these initiatives or future initiatives will not adversely affect our ability to generate or assemble data or to develop or market current or future products or services and therefore our revenues and net income.

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Hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements may harm our business.

        Our success depends on the efficient and uninterrupted operation of our computer and communications systems. A failure of our network or data gathering procedures could impede the processing of data, delivery of databases and services, client orders and day-to-day management of our business and could result in the corruption or loss of data. While many of our operations have appropriate disaster recovery plans in place, we currently do not have full backup facilities everywhere in the world to provide redundant network capacity in the event of a system failure. Despite any precautions we may take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins, sabotage, breaches of security, epidemics and similar events at our various computer facilities could result in interruptions in the flow of data to our servers and from our servers to our clients. In addition, any failure by our computer environment to provide our required data communications capacity could result in interruptions in our service. In the event of a delay in the delivery of data, we could be required to transfer our data collection operations to an alternative provider of server hosting services. Such a transfer could result in significant delays in our ability to deliver our products and services to our clients. Additionally, significant delays in the planned delivery of system enhancements, improvements and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Finally, long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities, epidemics and acts of terrorism (particularly involving cities in which we have offices) could adversely affect our businesses. Although we carry property and business interruption insurance, our coverage may not be adequate to compensate us for all losses that may occur.

Consolidation in the industries in which our clients operate may reduce the volume of products and services purchased by consolidated clients following an acquisition or merger, leading to decreased earnings.

        Consolidation in the pharmaceutical industry could reduce the volume of our information products and services purchased by consolidated clients. When companies consolidate, overlapping products and services they previously purchased separately are usually now purchased only once by the combined entity, leading to contract compression and loss of revenue. While we have experienced success in mitigating the revenue impact of client consolidation, there can be no assurance as to the degree to which we will be able to continue to do so as consolidation continues.

Our business is subject to exchange rate fluctuations and our revenue, net income and financial position may suffer due to currency translations.

        We operate globally, deriving approximately 63% of our 2009 revenue from non-U.S. operations. As a result, fluctuations in the value of foreign currencies relative to the U.S. dollar increase the volatility of U.S. dollar denominated operating results. Emerging markets currencies tend to be considerably less stable than those in established markets, which may further contribute to volatility in our U.S. dollar-denominated operating results.

        As a result of devaluations and fluctuations in currency exchange rates or the imposition of limitations on conversion of foreign currencies into dollars, we are subject to currency translation exposure on the profits and financial position of our operations, in addition to economic exposure.

Our international operations present risks to our current businesses that could impede growth in the future.

        International operations are subject to various risks that could adversely affect our business, including:

•

costs of customizing services for foreign clients;

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•

reduced protection for intellectual property rights in some countries;



•

the burdens of complying with a wide variety of foreign laws;



•

exposure to local economic conditions; and



•

exposure to local political conditions, including the risks of an outbreak of war, the escalation of hostilities, acts of terrorism and nationalization, expropriation, price controls or other restrictive government actions.

We may be unsuccessful in identifying acquisition candidates or evaluating the material risks involved in any acquisition.

        An important aspect of our business strategy in the past has been growth through acquisitions or joint ventures and we may continue to acquire or make investments in complementary businesses, technologies, services or products. There can be no assurance that we will be able to continue to identify and consummate acquisitions or joint ventures on satisfactory terms. Moreover, every acquisition and joint venture entails some degree of uncertainty and risk. For example, we may be unsuccessful in identifying and evaluating business, legal or financial risks as part of the due diligence process associated with a transaction. In addition, some acquisitions will have contingent consideration components that may require us to pay additional amounts in the future in relation to future performance results of the acquired business. If we do not properly assess these risks, or if we fail to realize the benefits from one or more acquisitions, our business, results of operations and financial condition could be adversely affected.

We may be unsuccessful in integrating any acquired operations with our existing business.

        We may experience difficulties in integrating operations acquired from other companies. These difficulties include the diversion of management's attention from other business concerns and the potential loss of key employees of the acquired operations. Acquisitions also frequently involve significant costs, often related to integrating information technology, accounting and management services and rationalizing personnel levels. If we experience difficulties in integrating one or more acquisitions, our business, results of operations and financial condition could be adversely affected.

Changes in tax laws or their application may adversely affect our reported results.

        We operate in more than 100 countries worldwide and our earnings are subject to taxation in many differing jurisdictions and at differing rates. We seek to organize our affairs in a tax efficient manner, taking account of the jurisdictions in which we operate. Tax laws that apply to our business may be amended by the relevant authorities as a result of changes in fiscal circumstances or priorities. Such amendments, or their application to our business, may adversely affect our reported results.

We are involved in tax related matters that could have a material effect on us.

        We (and our predecessors) have entered, and we continue to enter, into global tax planning initiatives in the normal course of business. These activities are subject to review by applicable tax authorities and courts. As a result of the review process, uncertainties exist and it is possible that some of these matters could be resolved adversely to us, including those tax related matters described in Part I, Item 3 of this Annual Report on Form 10-K. Moreover, there can be no assurance that we will be able to maintain our effective tax rate.

We are, and may become, involved in litigation that could harm the value of our business.

        In the normal course of our business, we are involved in lawsuits, claims, audits and investigations, such as those described in Part I, Item 3 of this Annual Report on Form 10-K. The outcome of these

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matters could have a material adverse effect on our business, results of operation or financial condition. In addition, we may become subject to future lawsuits, claims, audits and investigations that could result in substantial costs and divert our attention and resources.

Significant technological changes could render our products and services obsolete. We may not be able to develop the technology necessary for our business, or to do so efficiently.

        We operate in businesses that require sophisticated data collection and processing systems and software and other technology. Some of the technologies supporting the industries we serve are changing rapidly and we must continue to develop cost-effective technologies for data collection and processing to accommodate such changes. We also must continue to deliver data to our clients in forms that are easy to use while simultaneously providing clear answers to complex questions. There can be no guarantee that we will be able to develop new technologies for data collection, processing and delivery or that we will be able to do so as quickly or cost-effectively as our competition. Significant technological change could render our products and services obsolete.

        Moreover, the introduction of new products and services embodying new technologies and the emergence of new industry standards could render existing products and services obsolete. Our continued success will depend on our ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of our products and services in response to changing client and industry demands. We may experience difficulties that could delay or prevent the successful design, development, testing, introduction or marketing of our products and services. New products and services, or enhancements to existing products and services, may not adequately meet the requirements of current and prospective clients or achieve any degree of significant market acceptance.

Government imposed price restrictions on pharmaceutical companies could reduce demand for our products and services.

        A number of countries in which we operate have enacted regulations limiting the prices pharmaceutical companies may charge for drugs. We believe that such cost containment measures will cause pharmaceutical companies to seek more effective means of marketing their products (which will benefit us in the medium and long-term). However, such governmental regulation may cause pharmaceutical companies to revise or reduce their marketing programs in the near term, which may in turn reduce the demand for certain of our products and services. This could result in decreased revenue, net income and earnings per share.

The success of our business will largely depend on the performance of the pharmaceutical and healthcare industries.

        The vast majority of our revenues are generated from sales to the pharmaceutical and healthcare industries. To the extent the businesses we serve, especially our clients in the pharmaceutical and healthcare industries, are subject to financial pressures of, for example, price controls, increased costs or reduced demand for their products, the demand for our products and services, or the price our clients are willing to pay for those products and services, may decline.

Our success will depend on our ability to protect our intellectual property rights.

        The success of our businesses will continue to depend, in part, on:

•

obtaining patent protection for our technology, products and services;



•

defending our patents, copyrights and other intellectual property;

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•

preserving our trade secrets and maintaining the security of our know-how; and



•

operating without infringing upon patents and proprietary rights held by third parties.

        We rely on a combination of contractual provisions, confidentiality procedures and patent, copyright, trademark, service mark and trade secret laws to protect the proprietary aspects of our products, services, databases and technologies. There can be no assurance that these protections will be adequate, or that we will adequately employ each and every one of these protections at all times, to provide sufficient protection in the future to prevent the use or misappropriation of our data, technology and other products and services. Further, our competitors may develop products, services, databases or technologies that are substantially equivalent or superior to our products, services, databases or technologies. Although we believe that our products, services, databases, technologies and related proprietary rights do not infringe upon the proprietary rights of third parties, there can be no assurance that third parties will not assert infringement claims against us in the future. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of our proprietary rights. For example, we have been involved in litigation with Insight Health GmbH & Co. KG in Germany in order to protect our proprietary mapping software. In addition, the growing need for global data, along with increased competition and technological advances, puts increasing pressure on us to share our intellectual property for client applications. Any future litigation, regardless of outcome, could result in substantial expense and diversion of resources with no assurance of success and could seriously harm our business, financial condition and operating results.

If we are unable to attract, retain and motivate employees, we will not be able to compete effectively and will not be able to expand our business.

        Our success and ability to grow are dependent, in part, on our ability to hire, retain and motivate sufficient numbers of talented people, with the increasingly diverse skills needed to serve clients and expand our business, in many locations around the world. Competition for highly qualified technical and managerial, and particularly consulting personnel is intense. Recruiting, training and retention costs and benefits place significant demands on our resources. The inability to attract qualified employees in sufficient numbers to meet particular demands or the loss of a significant number of our employees could have a serious negative effect on us, including our ability to obtain and successfully complete important client engagements and thus maintain or increase our revenues.

Our businesses are subject to significant or potential competition that is likely to intensify in the future.

        Our future growth and success will be dependent on our ability to successfully compete with other companies that provide similar services in the same markets, some of which may have financial, marketing, technical and other advantages.

Disruptions in commerce could adversely affect our business.

        Commerce could be disrupted by various political, economic, world health or other conditions. Examples of such disruptions that could adversely affect our business include:

•

terrorist activity, the threat of such activity, and responses to and results of such activity and threats, including but not limited to effects, domestically and/or internationally, on us, our personnel and facilities, our customers and suppliers, financial markets and general economic conditions;



•

an outbreak of SARS, avian influenza (Bird Flu), the H1N1 virus or other epidemic, the fear of such an epidemic, and responses to and results of such an epidemic or fear thereof, including

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but not limited to effects, domestically and/or internationally, on us, our personnel and facilities, our customers and suppliers, financial markets and general economic conditions; and

•

credit market disruptions, the threat of such disruptions, and responses to and results of such disruptions and threats, including but not limited to effects, domestically and/or internationally, on us, our customers and suppliers, financial markets and general economic conditions.

        If such disruptions result in cancellations of or reductions in customer orders or contribute to a general decrease in economic activity, or directly impact our marketing, collection, production, delivery, financial and logistics functions, our results of operations and financial condition could be materially adversely affected.

The Merger is subject to satisfaction or waiver of certain customary conditions.

        Completion of the Merger is subject to the satisfaction or waiver of certain customary conditions, including without limitation the absence of any law enacted, issued, enforced or entered by any court or governmental entity of competent jurisdiction that restrains, enjoins or otherwise prohibits the consummation of the Merger or otherwise makes consummation of the Merger illegal, the accuracy of representations and warranties (subject to customary materiality qualifiers) made by the parties to the Merger Agreement, and compliance, in all material respects, with the parties' respective covenants and agreements contained in the Merger Agreement at or prior to the date of the closing of the Merger. Completion of the Merger is expected to occur by the end of the first quarter of 2010. However, no assurances can be given that the transaction contemplated by the Merger Agreement will be consummated or, if not consummated, that we will enter into a comparable or superior transaction with another party.

The Merger may not be completed if sufficient financing is not funded.

        Parent has obtained equity and debt financing commitments. The funding under those commitments is subject to conditions, including conditions that do not relate directly to the Merger Agreement. We believe the committed amounts will be sufficient to complete the transaction, but cannot provide any assurance to that effect. Those amounts might be insufficient if, among other things, a substantial change in the dollar-yen exchange rate substantially increases the cost of refinancing our yen denominated debt or we have substantially less cash on hand (net of any applicable repatriation taxes) or substantially less net proceeds from the equity and debt financings than we currently expect.

        Although the debt financing described herein is not subject to due diligence or a typical "market out" provision, which allows lenders not to fund their commitments if certain conditions in the financial markets prevail, there is still a risk that such financing may not be funded when required. As of the date of this Annual Report on Form 10-K, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing described herein is not available as anticipated. Even though obtaining the equity or debt financing is not a condition to the completion of the Merger, the failure of Parent and Merger Sub to obtain sufficient financing is likely to result in the failure of the Merger to be completed. In that case, Parent may be obligated to pay us a fee of $275,000. That obligation is severally guaranteed by the Guarantors.

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Our future business and financial position may be adversely affected if the Merger is not completed.

        If the Merger Agreement is terminated and the Merger is not consummated, we will have incurred substantial expenses without realizing the expected benefits of the Merger. In addition, we may also be subject to additional risks including, without limitation:

•

depending on the reasons for termination of the Merger Agreement, the requirement that we pay a termination fee equal to $115,000 in addition to the payment to Parent of all out-of-pocket fees and expenses incurred by Parent or Merger Sub in connection with the Merger Agreement or the transactions contemplated therein up to $5,000;



•

substantial costs related to the Merger, such as legal, accounting and financial advisory fees, must be paid regardless of whether the Merger is completed;



•

potential disruption to the current plan, operations, businesses and distraction of our workforce and management team; and



•

potential difficulties in employee retention as a result of termination of the proposed Merger.

Failure to complete the Merger could adversely affect our stock price.

        If the Merger is not completed for any reason, the price of our Common Stock may decline significantly to the extent that the market price of our Common Stock reflects positive market assumptions that the Merger will be completed.

        For further information regarding the Merger Agreement, please refer to the Merger Agreement and the Definitive Proxy Statement on Schedule 14A filed with the SEC by us on December 29, 2009, which are incorporated by reference as exhibits to this Annual Report on Form 10-K.

Item 1B.    Unresolved Staff Comments

        There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our 2009 fiscal year.

Item 2.    Properties

        Our executive offices are located at 901 Main Avenue, Norwalk, Connecticut in a leased property (approximately 41,000 square feet).

        Our property is geographically distributed to meet our sales and operating requirements worldwide. Our properties and equipment are generally considered to be both suitable and adequate to meet current operating requirements and virtually all space is being utilized.

        Our owned properties located within the U.S. include two facilities. These properties are located in Plymouth Meeting (approximately 212,000 square feet) and West Norriton, Pennsylvania (approximately 17,000 square feet).

        Our active owned properties located outside the U.S. include: one property in each of Buenos Aires, Argentina (approximately 12,000 square feet); Santiago, Chile (approximately 4,000 square feet); Caracas, Venezuela (two properties totaling approximately 12,000 square feet); and London (approximately 102,000 square feet).

        Our operations are also conducted from 18 leased offices located throughout the U.S. and 98 leased offices in non-U.S. locations.

        We own or lease a variety of computers and other equipment for our operational needs. We continue to upgrade and expand our computers and related equipment in order to increase efficiency, enhance reliability and provide the necessary base for business expansion.

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Item 3.    Legal Proceedings

        We are involved in legal and tax proceedings, claims and litigation arising in the ordinary course of business. We periodically assess our liabilities and contingencies in connection with these matters based upon the latest information available. For those matters where we currently believe it is probable that we will incur a loss and that the probable loss or range of loss can be reasonably estimated, we have recorded reserves in the Consolidated Financial Statements based on our best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, we are unable to make a reasonable estimate of a liability, if any. However, even in many instances where we have recorded a reserve, we are unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect our results of operations, financial position or cash flows. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

        We routinely enter into agreements with our suppliers to acquire data and with our customers to sell data, all in the normal course of business. In these agreements, we sometimes agree to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims related to the use of the data. These indemnities typically have terms of approximately two years. We have not accrued a liability with respect to these matters, as the exposure is considered remote.

        Based on our review of the latest information available, we believe our ultimate liability in connection with pending tax and legal proceedings, claims and litigation will not have a material effect on our results of operations, cash flows or financial position, with the possible exception of the matters described below.

D&B LEGACY AND RELATED TAX MATTERS

        SHARING DISPUTES.    In 1996, the company then known as The Dun & Bradstreet Corporation ("D&B") and now known as R.H. Donnelley Corporation ("Donnelley") separated into three public companies by spinning off ACNielsen Corporation ("ACNielsen") and the company then known as Cognizant Corporation ("Cognizant") (the "1996 Spin-Off"). Cognizant is now known as Nielsen Media Research, Inc., a subsidiary of The Nielsen Company, formerly known as VNU N.V. ("NMR"). The agreements effecting the 1996 Spin-Off allocated tax-related liability with respect to certain prior business transactions between D&B and Cognizant. The D&B portion of such liability is now shared among Donnelley and certain of its former affiliates (the "Donnelley Parties"), and the Cognizant portion of such liability is shared between NMR and us pursuant to the agreements effecting Cognizant's spin-off of us in 1998 (the "1998 Spin-Off").

        The underlying tax controversies with the Internal Revenue Service ("IRS") have substantially all been resolved and we paid to the IRS the amounts that we believed were due and owing. In the first quarter of 2006, Donnelley indicated that it disputed the amounts contributed by us toward the resolution of these matters based on the Donnelley Parties' interpretation of the allocation of liability under the 1996 Spin-Off agreements. In August 2006, the Donnelley Parties commenced arbitration regarding one of these disputes (referred to herein as the "Dutch Partnership Dispute"). The Dutch Partnership Dispute was resolved during the third quarter of 2008 when the parties consented to the entry of a consent award by the arbitration panel. Pursuant to the terms of the consent award, in the third quarter of 2008, we made a payment of $4,600 ($3,100 net of tax benefit) and an additional interest and cost payment of $2,600 ($1,700 net of tax benefit) to the Donnelley Parties. The remaining disputes were resolved during the second quarter of 2009 by agreement among the parties. Pursuant to the 2009 settlement agreement, we made a payment of $10,750 ($8,000 net of tax benefit) to the Donnelley Parties in full satisfaction of our liability with respect to the remaining disputes.

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        THE PARTNERSHIP (TAX YEAR 1997).    During the fourth quarter of 2008, we entered into a final agreement with the IRS in which the IRS disallowed certain items of partnership expense for tax year 1997 with respect to a partnership now substantially owned by us (the "Partnership"). During 1997, the Partnership was substantially owned by Cognizant, but liability for this matter was allocated to us pursuant to the agreements effecting the 1998 Spin-Off. Pursuant to the settlement, during the second quarter of 2009, we paid $20,400 (tax and interest, net of tax benefit) to the IRS in full satisfaction of our liability with respect to the Partnership for tax year 1997.

        In addition to these matters, we and our predecessors have entered, and we continue to enter, into global tax planning initiatives in the normal course of our businesses. These activities are subject to review by applicable tax authorities. As a result of the review process, uncertainties exist and it is possible that some of these matters could be resolved adversely to us.

LITIGATION RELATING TO THE MERGER

        As previously disclosed in more detail in the Definitive Proxy Statement on Schedule 14A filed with the SEC by us on December 29, 2009, in connection with the Merger, between November 6, 2009 and November 10, 2009 three putative stockholder class action lawsuits were filed in the Delaware Court of Chancery and two in the Superior Court of Connecticut, Judicial District of Stamford-Norwalk. These lawsuits generally alleged breaches of fiduciary duty by our directors in connection with the Merger.

        On December 2, 2009, the three putative shareholder class action lawsuits filed in Delaware were consolidated into a single action, captioned In re IMS Health Inc. Shareholder Litigation, C.A. No. 5057-CC (the "Delaware Action"). On January 14, 2010, the plaintiffs in the Delaware Action filed a Notice and Order of Voluntary Dismissal of all their claims, without prejudice, in which they represented that no compensation in any form has passed directly or indirectly from defendants to plaintiffs or plaintiffs' attorneys and that no promise to give any such compensation has been made. The Court of Chancery granted the dismissal on January 15, 2010.

        One of the two putative shareholder class action lawsuits filed in Connecticut, styled Trust for the Benefit of Sylvia B. Piven v. IMS Health Incorporated, et al., CV09-5013110-S, was filed on November 6, 2009, and the other, styled John Felhaber v. David R. Carlucci, et al., CV09-5013139-S, was filed on November 10, 2009. On December 8, 2009, plaintiff Felhaber filed an amended complaint asserting, among other things, that our directors had breached their duty of disclosure in the Preliminary Proxy Statement on Schedule 14A filed with the SEC by us on November 25, 2009. On December 18, 2009, our director defendants filed motions to dismiss for failure to properly effect service, and on December 21, 2009 we filed motions to strike the Piven complaint and the Felhaber amended complaint filed in the Superior Court of Connecticut. On January 5, 2010, plaintiff Felhaber filed an application for temporary injunction seeking, among other things, disclosure-based relief in advance of the February 8, 2010 Special Meeting of our stockholders, and on January 11, 2010, we and our directors filed an objection to the application. During a January 13, 2010 hearing before the Superior Court of Connecticut, our director defendants withdrew their motions to dismiss.

        On January 27, 2010, we entered into a memorandum of understanding with the plaintiffs regarding the settlement of the two putative stockholder class action lawsuits filed in the Superior Court of Connecticut, Judicial District of Stamford-Norwalk. We believe that no further supplemental disclosure is required under applicable laws; however, to avoid the risk of the putative stockholder class actions delaying or adversely affecting the Merger and to minimize the expense of defending such actions, we have agreed, pursuant to the terms of the proposed settlement, to make certain supplemental disclosures related to the proposed Merger. Subject to completion of certain confirmatory discovery by counsel to the plaintiffs, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary

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conditions, including court approval following notice to our stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Superior Court will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the court, it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the proposed Merger, the Merger Agreement, and any disclosure made in connection therewith (but excluding claims for appraisal under Section 262 of the Delaware General Corporation Law), pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement. In addition, in connection with the settlement, the parties contemplate that plaintiffs' counsel will file a petition in the Superior Court for an award of attorneys' fees and expenses to be paid by us or our successor, which the defendants may oppose. We or our successor shall pay or cause to be paid those attorneys' fees and expenses awarded by the Court. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Superior Court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated.

IMS HEALTH GOVERNMENT SOLUTIONS VOLUNTARY DISCLOSURE PROGRAM PARTICIPATION

        Our wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services and products under contracts with the U.S. government. U.S. government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the U.S. government have the ability to investigate whether contractors' operations are being conducted in accordance with such requirements. U.S. government investigations, whether relating to these contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and may result in no adverse action against us.

        IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS in May 2005). Upon discovery of the potential noncompliance, we began remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and were accepted into the Department of Defense Voluntary Disclosure Program. We filed our Voluntary Disclosure Program Report ("Disclosure Report") on August 29, 2008. Based on our findings as disclosed in the Disclosure Report, we recorded a reserve of approximately $3,748 for this matter in the third quarter of 2008. We are currently unable to determine the outcome of this matter pending the resolution of the Voluntary Disclosure Program process and our ultimate liability arising from this matter could exceed our current reserve.

Item 4.    Submission of Matters to a Vote of Security Holders

        There were no matters submitted to a vote of security holders during the fourth quarter of our fiscal year ended December 31, 2009.

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PART II

Item 5.    Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

        The principal market on which our Common Stock is traded is the NYSE. Information relating to the high and low sales prices per share of our Common Stock for each full quarterly period during 2009 and 2008 is set forth under the heading "IMS Health Common Stock Information" in Part II, Item 7 of this Annual Report on Form 10-K. As of February 12, 2010, there were 3,424 holders of record of our Common Stock.

        Information relating to our payment of dividends during 2009 and 2008 is set forth under the heading "Dividends" in Part II, Item 7 of this Annual Report on Form 10-K.

        The following table provides information about our purchases during the quarter ended December 31, 2009 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act.

        Information relating to compensation plans under which our equity securities are authorized for issuance is set forth in Part III, Item 12 of this Annual Report on Form 10-K.

        The following graph is a comparison of the five-year cumulative return of our common stock, the Standard & Poor's 500 Index (the "S&P 500 Index"), and the Standard & Poor's Pharmaceuticals Index (the "S&P Pharmaceuticals Index"), a peer group index. The graph assumes that $100 was invested on December 31, 2004 in our common stock, the S&P Index and the S&P 500 Pharmaceutical Index and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the performance of our common stock will continue in line with the same or similar trends depicted in the graph below.

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PERFORMANCE GRAPH

        The cumulative total shareholder return graph and accompanying information set forth above is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section. The cumulative total shareholder return graph and accompanying information set forth above shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 6.    Selected Financial Data

        The Selected Financial Data table is set forth in Part II, Item 8 of this Annual Report on Form 10-K.

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Dollars and shares in thousands, except per share data.

        This discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related notes.

Executive Summary

OUR BUSINESS

        IMS Health Incorporated ("IMS," "we," "us" or "our") is the leading global provider of market intelligence to the pharmaceutical and healthcare industries. We offer leading-edge market intelligence products and services that are integral to our clients' day-to-day operations, including product and portfolio management capabilities; commercial effectiveness innovations; managed care and consumer health offerings; and consulting and services solutions that improve productivity and the delivery of quality healthcare worldwide. Our information products are developed to meet client needs by using data secured from a worldwide network of suppliers in more than 100 countries. Our business lines are:

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Commercial Effectiveness to increase clients' productivity across end-to-end sales, marketing, promotional and performance management processes;



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Product and Portfolio Management to provide clients with insights into market measurement so they can optimize their product portfolio and strategies; and



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New Business Areas that support pharmaceutical client business initiatives in managed markets, consumer health, and pricing and market access, and that also serve payer and government audiences.

        Within these business lines, we provide consulting and services that use in-house capabilities and methodologies to assist clients in analyzing and evaluating market trends, strategies and tactics, and to help in the development and implementation of customized software applications and data warehouse tools.

        We operate in more than 100 countries.

        We manage on a global business model with global leaders for the majority of our critical business processes and accordingly have one reportable segment.

        We believe that important measures of our financial condition and results of operations include operating revenue, constant dollar revenue growth, operating income, constant dollar operating income growth, operating margin and cash flows.

THE MERGER AGREEMENT

        On November 5, 2009, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Healthcare Technology Holdings, Inc., a Delaware corporation ("Parent"), and Healthcare Technology Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger Sub"), providing for the merger of Merger Sub with and into IMS (the "Merger"), with IMS surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of TPG Capital, L.P. ("TPG") and Canada Pension Plan Investment Board ("CPPIB").

        On February 8, 2010, a special meeting of our stockholders was held (the "Special Meeting"). At the Special Meeting our stockholders approved the proposal presented at the Special Meeting to adopt the Merger Agreement.

        At the effective time of the Merger, each share of our Common Stock issued and outstanding (except for certain shares held by Parent, us and certain of our subsidiaries, and shares held by stockholders who have properly demanded appraisal rights) will convert into the right to receive the per share Merger consideration of $22.00 in cash, without interest, less any applicable withholding taxes.

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        The respective obligations of IMS, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including without limitation the absence of any law enacted, issued, enforced or entered by any court or governmental entity of competent jurisdiction that restrains, enjoins or otherwise prohibits the consummation of the Merger or otherwise makes consummation of the Merger illegal, the accuracy of representations and warranties (subject to customary materiality qualifiers) made by the parties to the Merger Agreement, and compliance, in all material respects, with the parties' respective covenants and agreements contained in the Merger Agreement at or prior to the date of the closing of the Merger. The consummation of the Merger is subject to certain other conditions which, as of the date of this Annual Report on Form 10-K, have been satisfied. Completion of the Merger is expected to occur by the end of the first quarter of 2010.

        We anticipate that the total funds needed to complete the Merger will be approximately $5,900,000. We expect this amount to be funded through a combination of:

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equity financing of approximately $2,800,000 to be provided or secured by investment funds affiliated with TPG and a wholly owned subsidiary of CPPIB, or other parties to whom they assign a portion of their commitments;



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a $2,000,000 senior secured term loan facility;



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the issuance of $1,000,000 in principal amount of senior unsecured notes (supplemented, if some or all of those notes cannot be sold at closing, by a senior unsecured term loan facility); and



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approximately $100,000 of cash on hand of IMS.

Parent has obtained equity and debt financing commitments. The funding under those commitments is subject to conditions, including conditions that do not relate directly to the Merger Agreement.

        Pursuant to a limited guarantee delivered by TPG Partners V, L.P., TPG Partners VI, L.P. and CPP Investment Board Private Holdings Inc. (collectively, the "Guarantors") in favor of IMS, dated November 5, 2009, the Guarantors have agreed to guarantee, severally but not jointly, the due and punctual performance and discharge of the obligations of Parent and Merger Sub under the Merger Agreement to pay a termination fee of $275,000 to us, as and when due, the direct expenses incurred by Parent or Merger Sub in connection with the arrangement of the financing of the Merger, and certain reimbursement obligations of Parent and Merger Sub with respect to IMS, which direct expenses and reimbursement obligations shall not in the aggregate exceed $6,000.

        The Merger Agreement contains certain termination rights for IMS and Parent. If the Merger Agreement is terminated, under certain specified circumstances in the Merger Agreement, we may be required to pay a termination fee equal to $115,000, in addition to reimbursing Parent for all out-of-pocket fees and expenses incurred by Parent or Merger Sub in connection with the Merger Agreement or the transactions contemplated therein up to $5,000. In the event we terminate the Merger Agreement due to certain actions or inactions by Parent, Parent must pay us a fee of $275,000, less the sum of amounts paid by Parent with respect to Parent's liability for certain reimbursement obligations and certain direct expenses incurred by Parent in connection with the financing up to $6,000 in the aggregate.

        For further information regarding the Merger Agreement, please refer to the Merger Agreement and the Definitive Proxy Statement on Schedule 14A filed with the SEC by IMS on December 29, 2009, which are incorporated by reference as exhibits to this Annual Report on Form 10-K.

PERFORMANCE OVERVIEW

        Operating revenue declined 6.0% to $2,189,745 in 2009 compared to $2,329,528 in 2008. The decrease in our operating revenue resulted from revenue declines in all three of our business lines. Our operating income decreased 45.6% to $270,888 in 2009 compared to $498,305 in 2008. The decrease in

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operating income was a result of decreased operating revenue, an increase of $134,877 in severance, impairment and other charges and a related $4,190 non-cash charge for accelerated depreciation and $11,000 of merger costs, partially offset by decreases in our operating costs, as discussed below. Our net income attributable to IMS was $258,455 in 2009, a decrease of $52,795 as compared to $311,250 in 2008, due to the decrease in operating income, partially offset by a decrease in the Non-Operating Loss, net items discussed below and certain tax items as discussed in Note 12 of the Consolidated Financial Statements. Our diluted earnings per share of Common Stock decreased to $1.42 for 2009 as compared to $1.70 for 2008.

Results of Operations

        RECLASSIFICATIONS.    Certain prior-year amounts have been reclassified to conform to the 2009 presentation.

        REFERENCES TO CONSTANT DOLLAR RESULTS AND RESULTS EXCLUDING THE EFFECT OF FOREIGN CURRENCY TRANSLATIONS.    We report results in U.S. dollars, but we do business on a global basis. Exchange rate fluctuations affect the rate at which we translate foreign revenues and expenses into U.S. dollars and may have significant effects on our results. In order to illustrate these effects, the discussion of our business in this report sometimes describes the magnitude of changes in constant dollar terms or results excluding the effect of foreign currency translations. We believe this information facilitates a comparative view of our business. See "How Exchange Rates Affect Our Results" and the discussion of "Market Risk" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section below for a more complete discussion regarding the impact of foreign currency translation on our business.

        REFERENCES TO SELLING AND ADMINISTRATIVE EXPENSES, OPERATING INCOME AND OPERATING MARGIN EXCLUDING SEVERANCE, IMPAIRMENT AND OTHER CHARGES, NON-CASH CHARGES FOR ACCELERATED DEPRECIATION AND AMORTIZATION, MERGER COSTS AND THE GOVERNMENT SOLUTIONS CHARGE.    We discuss below what our selling and administrative expenses, operating income and operating margin for the years ended December 31, 2009, 2008 and 2007 would have been had we not recorded severance, impairment and other charges, non-cash charges for accelerated depreciation and amortization, merger costs and the Government Solutions charge. Because we did not record similar charges in the prior periods, we believe providing these non-GAAP measures is useful to investors as it facilitates comparisons across the periods presented and more clearly indicates trends. Management uses these non-GAAP measures in its global decision-making,

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including developing budgets and managing expenditures. See "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7.

OPERATING INCOME

        Our operating income for 2009 declined $227,417 to $270,888 from $498,305 in 2008. This was due to the decrease in our operating revenue, an increase of $134,877 in severance, impairment and other charges and a related $4,190 non-cash charge for accelerated depreciation and amortization (see Note 6 to our Consolidated Financial Statements), an increase in our selling and administrative expenses and $11,000 of merger costs related to the proposed acquisition of IMS by Healthcare Technology Holdings, Inc., an entity created by certain affiliates of TPG Capital, L.P. and the Canada Pension Plan Investment Board (see Note 16 to our Consolidated Financial Statements), partially offset by decreases in our operating costs driven by decreased cost of data and tight controls on hiring. Our operating income decreased $249,301 or 54.4% in constant dollar terms. Absent the impact of severance, impairment and other charges in 2009 and 2008 and the related non-cash charge for accelerated depreciation and amortization in 2009, the merger costs in 2009 and the 2008 Government Solutions charge of $3,748 (see Note 15 to our Consolidated Financial Statements), non-GAAP operating income would have decreased 15.9% at reported rates and 22.6% in constant dollar terms from 2008 (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7).

        Our operating income for 2008 grew 26.7% to $498,305 from $393,279 in 2007. This was due to the increase in our operating revenue and decreases in severance, impairment and other charges, offset by increases in operating costs and selling and administrative expenses driven by increased cost of data, investments in consulting and services ("C&S") capabilities and expense associated with a charge related to our Government Solutions business (see Note 15 to our Consolidated Financial Statements). Our 2008 operating income increased 18.3% in constant dollar terms from 2007. Absent the impact of 2008 impairment charges associated with the write-off of certain capitalized software assets resulting from the discontinuation of certain products (See Note 6 to our Consolidated Financial Statements), the Government Solutions charge and 2007 severance, impairment and other charges, non-GAAP operating income would have increased by 6.1% at reported exchange rates and remained flat in constant dollar terms (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7).

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OPERATING REVENUE

        Our operating revenue for 2009 declined 6.0% to $2,189,745 from $2,329,528 in 2008 and grew 6.2% in 2008 to $2,329,528 from $2,192,571 in 2007. On a constant dollar basis our operating revenue declined 4.1% in 2009 and grew 3.1% in 2008. On a constant dollar basis, acquisitions completed in 2008 contributed approximately 0.5 percentage points of revenue growth during 2009, partially offsetting our operating revenue decline. On a constant dollar basis, acquisitions completed in 2008 and 2007 contributed approximately 2.0 percentage points of our operating revenue growth during 2008. The decrease in our operating revenue for 2009 resulted from revenue declines in all three of our business lines, together with the effect of approximately $49,000 of currency translation for 2009 as compared to 2008. The increase in our operating revenue for 2008 resulted from growth in revenue due to higher purchases of products and C&S offerings from existing customers in all three of our business lines, together with the effect of approximately $70,000 of currency translation for 2008 as compared to 2007.

SUMMARY OF OPERATING REVENUE

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Commercial Effectiveness:  EMEA contributed more than one-half and the Americas contributed more than one-third to the constant dollar revenue decline in 2009. The Americas and Asia Pacific each contributed approximately one-half to the constant dollar revenue growth in 2008.



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Product & Portfolio Management:  EMEA contributed more than one-half and the Americas contributed more than one-third to the constant dollar revenue decline in 2009. Asia Pacific was the primary contributor to the constant dollar revenue growth in 2008 offset by the revenue decline in EMEA.



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New Business Areas:  EMEA and the Americas each contributed approximately one-half toward the constant dollar revenue decline in 2009. The Americas and EMEA each contributed approximately one-half to the constant dollar revenue growth in 2008.

        C&S revenue, as included in the business lines above, was $483,001 in 2009, down 10.9% from $542,041 in 2008 (down 8.7% on a constant dollar basis). C&S revenue was $542,041 in 2008, up 10.1% from $492,327 in 2007 (up 7.7% on a constant dollar basis).

OPERATING COSTS OF INFORMATION AND ANALYTICS

        Operating costs of information and analytics ("I&A") include costs of data, data processing and collection and costs attributable to personnel involved in production, data management and delivery of our I&A offerings.

        Our operating costs of I&A declined 5.4% to $715,766 in 2009 from $756,987 in 2008. In 2008, our operating costs of I&A grew 6.1% to $756,987 from $713,168 in 2007.

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Foreign Currency Translation:  The effect of foreign currency translation decreased our operating costs of I&A by approximately $25,000 in 2009 as compared to 2008 and increased our operating costs of I&A by approximately $22,000 for 2008 as compared to 2007.

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        Excluding the effect of foreign currency translation, our operating costs of I&A declined 2.2% in 2009 as compared to 2008 and grew 3.2% in 2008 compared to 2007.

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Data:  Data costs decreased by approximately $16,000 in 2009 as compared to 2008 and increased by approximately $26,000 in 2008 as compared to 2007.



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Production, Client Services and Other:  Production, client services and other costs remained relatively constant in 2009 compared to 2008 and decreased by approximately $3,000 in 2008 compared to 2007.

DIRECT AND INCREMENTAL COSTS OF CONSULTING AND SERVICES

        Direct and incremental costs of C&S include the costs of consulting staff directly involved with delivering revenue-generating engagements, related accommodations and the costs of primary market research data purchased specifically for certain individual C&S engagements. Direct and incremental costs of C&S do not include an allocation of direct costs of data that are included within I&A.

        Our direct and incremental costs of C&S declined 9.0% to $250,411 in 2009 from $275,246 in 2008. Our direct and incremental costs of C&S grew 12.7% to $275,246 in 2008 from $244,289 in 2007.

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Foreign Currency Translation:  The effect of foreign currency translation decreased our direct and incremental costs of C&S by approximately $13,000 in 2009 as compared to 2008 and increased our direct and incremental costs of C&S by approximately $6,000 in 2008 as compared to 2007.

        Excluding the effect of foreign currency translation, our direct and incremental costs of C&S declined 4.5% in 2009 compared to 2008 and grew 10.3% in 2008 as compared to 2007.

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C&S costs decreased by approximately $12,000 in 2009 as compared to 2008 due to decreased labor cost. C&S costs increased by approximately $24,000 in 2008 as compared to 2007 due to increased labor, accommodations and primary market research data expense, all directly related to C&S revenue growth.

EXTERNAL-USE SOFTWARE AMORTIZATION

        Our external-use software amortization charges represent the amortization associated with capitalized software to be sold, leased, or otherwise marketed. Our external-use software amortization charges declined 18.8% to $40,361 in 2009 from $49,728 in 2008 due to decreased software amortization associated with assets that were fully amortized or written-down to their net realizable values. Our external-use software amortization charges grew 2.3% to $49,728 in 2008 from $48,609 in 2007 due to increased software amortization associated with new products.

SELLING AND ADMINISTRATIVE EXPENSES

        Our selling and administrative expenses consist primarily of the expenses attributable to sales, marketing and administration, including human resources, legal, management and finance. Our selling and administrative expenses grew 1.7% in 2009, to $661,510 from $650,218 in 2008. Absent the 2008 Government Solutions charge (see Note 15 to our Consolidated Financial Statements), our non-GAAP selling and administrative expenses would have grown 2.3% in 2009 compared to 2008 (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7). Our selling and administrative expenses grew 3.7% in 2008, to $650,218 from $626,888 in 2007. Absent the 2008 Government Solutions charge, our non-GAAP selling and administrative expenses would have

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grown 3.1% in 2008 compared to 2007 (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7).

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Foreign Currency Translation:  The effect of foreign currency translation decreased our selling and administrative expenses by approximately $32,000 for 2009 as compared to 2008 and increased our selling and administrative expenses by approximately $9,000 in 2008 as compared to 2007.

        Excluding the effect of foreign currency translation and the Government Solutions charge, our selling and administrative expenses grew 7.5% in 2009 compared to 2008. Excluding the effect of foreign currency translation and the Government Solutions charge, our selling and administrative expenses grew 1.6% in 2008 compared to 2007.

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Sales and Marketing:  Sales and marketing expense decreased by approximately $8,000 in 2009 as compared to 2008 and decreased by approximately $5,000 in 2008 as compared to 2007.



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Consulting and Services:  C&S expenses increased by approximately $15,000 in 2009 as compared to 2008. Absent the Government Solutions charge, C&S expenses would have increased by approximately $19,000 in 2009 as compared to 2008. C&S expenses increased by approximately $2,000 in 2008 as compared to 2007. Absent the Government Solutions charge, C&S expenses would have decreased by approximately $2,000 in 2008 as compared to 2007.



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Administrative and Other:  Administrative and other expenses increased by approximately $37,000 in 2009 as compared to 2008 and increased by approximately $18,000 in 2008 as compared to 2007.

DEPRECIATION AND OTHER AMORTIZATION

        Our depreciation and other amortization charges increased 6.6% to $95,524 in 2009 from $89,636 in 2008 primarily due to $4,190 of accelerated depreciation and amortization recorded in 2009 related to exited facilities as part of the streamlining program noted below. Our depreciation and other amortization charges increased 15.4% to $89,636 in 2008 from $77,648 in 2007 due to increased depreciation related to new facilities and technology to upgrade our financial systems and increased amortization related to internal-use software.

SEVERANCE, IMPAIRMENT AND OTHER CHARGES

        During the third and fourth quarters of 2009, we recorded $105,573 in charges as a component of operating income for employee termination benefits and facility exit costs related to the streamlining program announced by us in July 2009 in response to accelerating healthcare marketplace dynamics compounded by a sustained economic downturn. Additionally, during the second and fourth quarters of 2009, we recorded $38,712 in charges as a component of operating income, of which $28,480 related to non-cash impairment charges for the write-down of certain assets in all regions to their net realizable values, $8,218 related to supplier contract-related charges for which we will not realize any future economic benefit, $2,904 related to capital contributed by selling shareholders of a previously acquired business and $890 of reversals related to our 2007 restructuring plan. During the fourth quarter of 2008, we recorded a $9,408 non-cash charge in severance, impairment and other charges related to the write-off of certain capitalized software assets resulting from the discontinuation of certain of our products in our EMEA region and Japan at the end of 2008. During the fourth quarter of 2007, we recorded $88,690 in charges as a component of operating income related to a plan to streamline the business. The charge consisted of termination benefits, asset impairment charges and related contract payments to be incurred with no future economic benefit based on our decision to abandon certain products in our EMEA region. See Note 6 to our Consolidated Financial Statements.

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MERGER COSTS

        In the fourth quarter of 2009, we recorded $11,000 of expense primarily for professional services consisting of investment banker, legal and accounting fees related to the proposed acquisition of IMS. See Note 16 to our Consolidated Financial Statements.

TRENDS IN OUR OPERATING MARGINS

        Our operating margin for 2009 was 12.4%, as compared to 21.4% in 2008. Margins were negatively impacted by revenue declines, the severance, impairment and other charges and related accelerated depreciation and amortization and merger costs, partially offset by decreased costs of data and decreased sales and marketing costs. Excluding the severance, impairment and other charges and related accelerated depreciation and amortization, the 2009 merger costs and the 2008 charge related to our Government Solution business, our non-GAAP operating margin decreased from 22.0% in 2008 to 19.7% in 2009 (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7).

        Our operating margin for 2008 was 21.4%, as compared to 17.9% in 2007. In 2008 and 2007 we incurred severance, impairment and other charges of $9,408 and $88,690, respectively, as discussed above. In addition, in 2008 we incurred a $3,748 charge related to our Government Solution business. Excluding these charges, our non-GAAP operating margin remained constant at 22.0% in 2008 compared to 2007 (see "Reconciliation of U.S. GAAP Measures to Non-GAAP Measures" at the end of this Item 7). In addition, our 2008 margins were negatively impacted by increased cost of data and our continuing investments in new products and C&S capabilities.

        We have several offerings in the U.S. that utilize prescriber-identifiable information. Over the past several years, there have been a number of state legislative initiatives seeking to impose restrictions on the commercial use of such information. To date, three states, New Hampshire, Vermont and Maine, have passed laws placing certain restrictions on the license, use or transfer of prescriber-identifiable information for commercial purposes. Collectively, these three states represent approximately one percent of prescription activity in the U.S. and therefore the impact of these laws on our business, financial condition and results of operations is not expected to be material. For additional information regarding the status of the laws passed in the three states noted above and related legislative developments in other jurisdictions, see Part II. Item 1A. Risk Factors.

NON-OPERATING LOSS, NET

        Our non-operating loss, net decreased to $34,274 in 2009 from $75,513 in 2008. Our non-operating loss, net increased to $75,513 in 2008 from $35,888 in 2007. The annual changes were due to the following factors:

        Interest Expense, net:    Net interest expense was $33,009 in 2009, compared with $34,451 in 2008 due to lower debt levels and lower borrowing costs. Net interest expense was $34,451 in 2008, compared with $29,746 in 2007 due to higher debt levels.

        Gains from Investments, net:    Gains from investments, net, totaled $41 in 2009, compared to $379 in 2008 and $2,317 in 2007. The net gains in 2009 and 2008 were the result of the sale of marketable securities. The net gain in 2007 was the result of the final distribution from our Enterprise portfolio, offset by related management fees, and the sale of marketable securities and venture capital investments.

        Other Expense, net:    Other expense, net, decreased by $40,135 in 2009 to $1,306 from $41,441 in 2008. This decrease was a result of net foreign exchange losses of $3,400, partially offset by $2,342 of gains on the sale of assets in 2009 as compared to net foreign exchange losses of $29,260, partially

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offset by $4,041 of gains on the sale of assets in 2008. In addition, this decrease was the result of a foreign exchange loss of $16,071 in 2008 related to the liquidation of non-functional currency Venezuela Bolívars held at our Swiss operating subsidiary (see Note 9 to our Consolidated Financial Statements). Other expense, net, increased by $32,982 in 2008 to $41,441 from $8,459 in 2007. This increase was the result of net foreign exchange losses of $29,260 in 2008 compared with net foreign exchange losses of $9,565 in 2007 and the foreign exchange loss of $16,071 related to the liquidation of non-functional currency Venezuela Bolívars held at our Swiss operating subsidiary, partially offset by gains on the sale of assets (see Note 4 to our Consolidated Financial Statements) in 2008.

TAXES

        Our effective tax rate was (10.2%) in 2009, compared with 25.1% in 2008 and 33.0% in 2007. Our effective tax rate for 2009 was favorably impacted by $12,200 as a result of reorganizations of certain non-U.S. subsidiaries, $69,300 due to foreign exchange losses recognized for tax purposes, $21,900 as a result of the expiration of certain statutes of limitation and $16,300 from the settlement of a certain state tax matter. For the twelve months ended December 31, 2009, we recorded $18,500 of tax expense related to unrecognized tax benefits that if recognized, would favorably affect the effective tax rate. Included in this amount is $3,800 of interest and penalties. As of December 31, 2009, we had $10,700 recorded for interest and penalties.

        The effective tax rate for 2008 was favorably impacted by $20,700 as a result of a non-U.S. reorganization involving several IMS subsidiaries, $11,000 due to audit settlements with taxing authorities, $9,700 as a result of the termination of a non-U.S. agreement, $9,700 in connection with the resolution of certain legacy tax matters (see Note 15 to our Consolidated Financial Statements) and $4,400 due to the expiration of certain statutes of limitation. For the twelve months ended December 31, 2008, we recorded $18,800 of tax expense related to unrecognized tax benefits that if recognized, would favorably affect the effective tax rate. Included in this amount is $9,200 of interest and penalties. As of December 31, 2008, we had $19,600 recorded for interest and penalties.

        The effective tax rate for 2007 was impacted by a tax reduction of $16,500 arising from a favorable non-U.S. audit settlement for tax years 1998 through 2002, a tax charge of $7,500 to revalue net deferred tax assets arising from the reduction of the German federal tax rate from 25% to 15% and a tax reduction of $12,440 arising from a reorganization of certain non-U.S. subsidiaries.

        On January 1, 2007, we adopted authoritative guidance related to accounting for uncertainty in income taxes. As a result of this adoption, we recognized an increase in liabilities for uncertain tax positions of $51,800 and a corresponding reduction to the January 1, 2007 retained earnings balance. As of the adoption date, we had $117,200 of gross unrecognized tax benefits and interest and penalties of $13,500. For the twelve months ended December 31, 2007, we recorded $21,100 of tax expense related to uncertain tax positions that if recognized, would favorably affect the effective tax rate. Included in this amount is $12,600 of interest and penalties. We recognize interest expense and penalties related to unrecognized tax benefits in income tax expense.

        We file numerous consolidated and separate income tax returns in the U.S. (federal and state) and non-U.S. jurisdictions. We are no longer subject to U.S. federal income tax examination by tax authorities for years before 2006. We are no longer subject to state and local income tax examination by tax authorities for years before 1997. Further, with few exceptions, we are no longer subject to examination by tax authorities in our material non-U.S. jurisdictions prior to 2004. It is reasonably possible that within the next twelve months we could realize $32,400 of unrecognized tax benefits as a result of the expiration of certain statutes of limitation.

        For all periods presented, our effective tax rate was reduced as a result of global tax planning initiatives. While we intend to continue to seek global tax planning initiatives, there can be no assurance that we will be able to successfully identify and implement such initiatives to reduce or maintain our overall tax rate.

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OPERATING RESULTS BY GEOGRAPHIC REGION

        The following represents selected geographic information for the regions in which we operate as of and for the years ended December 31, 2009, 2008 and 2007.

AMERICAS REGION

        Operating revenue in the Americas region declined 5.0% in 2009 compared to 2008 and grew 4.3% in 2008 versus 2007. Excluding the effect of foreign currency translations, operating revenue declined 4.0% in 2009 compared to 2008 and grew 4.1% in 2008 compared to 2007. The revenue decline in 2009 was driven more than one-third by each of Commercial Effectiveness and New Business Areas. The revenue growth in 2008 was driven more than three-quarters by New Business Areas.

        Operating income in the Americas region declined 11.0% in 2009 compared to 2008 and 3.8% in 2008 compared to 2007. The operating income decline in 2009 compared to 2008 reflects revenue

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decline in the region partially offset by decreases in operating expenses of $17,000. Excluding the effect of foreign currency translations and the Government Solutions charge in 2008 (see Note 15 to our Consolidated Financial Statements), operating income declined by 11.4% in 2009 as compared to 2008.

EMEA REGION

        Operating revenue in the EMEA region declined 10.5% in 2009 compared to 2008 and grew 6.4% in 2008 versus 2007. Excluding the effect of foreign currency translations, operating revenue declined 5.7% in 2009 compared to 2008 and grew 1.5% in 2008 compared to 2007. The revenue decline in 2009 was driven more than one-third by each of Commercial Effectiveness and New Business Areas and approximately one-quarter by Product & Portfolio Management. The growth in 2008 was driven by New Business Areas.

        Operating income in the EMEA region declined 9.2% in 2009 compared to 2008 and grew 6.6% in 2008 compared to 2007. The operating income decline reflects revenue declines in the region offset by decreases in operating expenses of $92,000. Excluding the effect of foreign currency translations, operating income declined by 29.4% in 2009 as compared to 2008.

ASIA PACIFIC REGION

        Operating revenue in the Asia Pacific region grew by 4.5% in 2009 compared to 2008 and 12.5% in 2008 compared to 2007. Excluding the effect of foreign currency translations, operating revenue grew 0.3% in 2009 compared to 2008 and 5.0% in 2008 compared to 2007. The constant dollar revenue growth in 2009 was driven by Commercial Effectiveness, partially offset by revenue decline in Product & Portfolio Management and New Business Areas. The revenue growth in 2008 was driven approximately one-half by each the Commercial Effectiveness and Product & Portfolio Management business lines.

        Operating income in the Asia Pacific region decreased by 0.8% in 2009 compared to 2008 and increased 9.3% in 2008 compared to 2007. The decline in operating income reflects revenue growth in the region offset by increases in operating expenses of $16,000. Excluding the effect of foreign currency translations, operating income declined by 6.5% in 2009 compared to 2008.

How Exchange Rates Affect Our Results

        We operate globally, deriving a significant portion of our operating income from non-U.S. operations. As a result, fluctuations in the value of foreign currencies relative to the U.S. dollar may increase the volatility of U.S. dollar operating results. We enter into foreign currency forward contracts to partially offset the effect of currency fluctuations. In 2009, foreign currency translation increased U.S. dollar revenue decline by approximately 1.9 percentage points, while the impact on operating income decline was an approximate decrease of 8.8 percentage points. In 2008, foreign currency translation increased U.S. dollar revenue growth by approximately 3.1 percentage points, while the impact on operating income growth was an approximate increase of 8.4 percentage points.

        Non-U.S. monetary assets are maintained in currencies other than the U.S. dollar, principally the Euro, the Japanese Yen and the Swiss Franc. Where monetary assets are held in the functional currency of the local entity, changes in the value of these currencies relative to the U.S. dollar are charged or credited to Cumulative translation adjustment in the Consolidated Statements of Shareholders' Equity (Deficit). The effect of exchange rate changes during 2009 increased the U.S. dollar amount of Cash and cash equivalents by $16,788. The effect of exchange rate changes during 2008 decreased the U.S. dollar amount of Cash and cash equivalents by $14,529. The effect of exchange rate changes during 2007 increased the U.S. dollar amount of Cash and cash equivalents by $17,442.

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Liquidity and Capital Resources

        Cash and cash equivalents increased $164,661 to $380,343 at December 31, 2009 compared to $215,682 at December 31, 2008. The increase reflects cash provided by operating activities of $542,588 and an increase of $16,788 due to the effect of exchange rate changes, partially offset by cash used in investing and financing activities of $119,757 and $274,958, respectively.

        We currently expect that we will use our Cash and cash equivalents primarily to fund:

•

development of software to be used in our new products and capital expenditures to expand and upgrade our information technology capabilities and to build or acquire facilities to house our business (we currently expect to spend approximately $95,000 to $115,000 over the next twelve months for software development and capital expenditures);



•

payments of approximately $107,000 related to our restructuring plans and our second quarter 2009 supplier contract-related charge, of which approximately $79,000 is expected to be paid over the next twelve months (see Note 6 to our Consolidated Financial Statements);



•

dividends to our shareholders (we expect that dividends will be $0.12 per share or approximately $22,000 over the next twelve months);



•

pension and other postretirement benefit plan contributions (we currently expect contributions to U.S. and non-U.S. pension and other postretirement benefit plans to total approximately $13,700 in 2010) (see Note 10 to our Consolidated Financial Statements for information regarding our pension and postretirement benefit plan expense);



•

acquisitions (see Note 4 to our Consolidated Financial Statements); and



•

share repurchases (see Note 14 to our Consolidated Financial Statements).

        Net cash provided by operating activities amounted to $542,588 for the year ended December 31, 2009, which represented an increase of $121,934 compared to cash provided by operating activities during the comparable period in 2008. The increase relates to higher accrued severance, impairment and other charges (see Note 6 to our Consolidated Financial Statements), higher deferred revenue balances, lower funding of accrued expenses and other current liabilities, lower accounts receivable balances and lower funding of prepaid expenses and other current assets, partially offset by lower accrued taxes, lower net income and higher funding of accounts payable during the year ended December 31, 2009. The decrease in accounts receivable was driven by a decrease in DSO (days sales outstanding), which was six days lower in 2009 as compared to 2008. The decrease in DSO was the result of stronger collections, improved receivables management and lower revenue.

        Net cash used in investing activities amounted to $119,757 for the year ended December 31, 2009, a decrease in cash used of $58,357 over the comparable period in 2008. The decrease relates to lower payments for acquisitions and lower capital expenditures, partially offset by higher additions to computer software and an increase in restricted cash (see Note 2 to our Consolidated Financial Statements) during the year ended December 31, 2009 as compared to the comparable period in 2008.

        Net cash used in financing activities amounted to $274,958 for the year ended December 31, 2009, an increase of $44,380 compared to cash used in financing activities during the comparable period in 2008. This increase was due to lower net borrowings of debt, the purchase of third-party ownership interests in IMS Health Licensing Associates, L.L.C. (see Note 7 to our Consolidated Financial Statements), a decrease in cash overdrafts and lower proceeds from the exercise of stock options, partially offset by the absence of purchases of treasury stock during the year ended December 31, 2009 as compared to the prior year comparable period.

        Our financing activities include cash dividends we paid of $0.03 per share quarterly, which amounted to $21,762 and $22,183 during the year ended December 31, 2009 and 2008, respectively.

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The payments and level of cash dividends made by us are subject to the discretion of our Board of Directors. Any future dividends will be based on, and affected by, a number of factors, including our operating results and financial requirements.

Capital and Credit Markets

        As the capital and credit markets have contracted, we have performed additional assessments to determine the impact, if any, on our financial statements of recent market developments, including the restructuring or merging of certain financial institutions. Our additional assessments included a review of access to liquidity in the capital and credit markets and financial institution counterparty creditworthiness. Based on our assessment, we currently believe we have sufficient liquidity and access to credit despite the current condition of the capital and credit markets.

Liquidity in the Capital and Credit Markets

        We fund our liquidity needs for capital investment, working capital, and other financial commitments through cash flow from continuing operations and our diversified credit facility ($571,089 in aggregate commitment available as of December 31, 2009). While not significant to us to date, contraction in capital and credit markets may result in increased borrowing costs in the future.

Credit Concentrations

        We continually monitor our positions with, and the credit quality of, the financial institutions which are counterparties to our financial instruments and do not anticipate non-performance by the counterparties. We would not have realized a material loss during the year ended December 31, 2009 in the event of non-performance by any one counterparty. In general, we enter into transactions only with financial institution counterparties that have a credit rating of A or better. In addition, we limit the amount of credit exposure with any one institution. Particularly in light of the current credit environment, management will continue to monitor the status of these counterparties and will take action, as appropriate, to further manage its counterparty credit risk.

        We maintain accounts receivable balances ($322,569 and $382,776, net of allowances, at December 31, 2009 and December 31, 2008, respectively), principally from customers in the pharmaceutical industry. Our trade receivables do not represent significant concentrations of credit risk at December 31, 2009 due to the credit worthiness of our customers and their dispersion across many geographic areas.

Tax and Other Contingencies

        We are exposed to certain known tax and other contingencies that are material to our investors. The facts and circumstances surrounding these contingencies and a discussion of their effect on us are included in Notes 12 and 15 to our Consolidated Financial Statements.

        These contingencies may have a material effect on our liquidity, capital resources or results of operations. In addition, even where our reserves are adequate, the incurrence of any of these liabilities may have a material effect on our liquidity and the amount of cash available to us for other purposes.

        Management believes that we have made appropriate arrangements in respect of the future effect on us of these known tax and other contingencies. Management also believes that the amount of cash available to us from our operations, together with cash from financing, will be sufficient for us to pay any known tax and other contingencies as they become due without materially affecting our ability to conduct our operations and invest in the growth of our business.

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Stock Repurchase Programs

        Our share repurchase program has been developed to buy opportunistically, when we believe that our share price provides us with an attractive use of our cash flow and debt capacity.

        On December 18, 2007, the Board of Directors authorized a stock repurchase program to buy up to 20,000 shares. As of December 31, 2009, 9,505 shares remained available for repurchase under the December 2007 program.

        During 2009, we did not repurchase any shares of outstanding Common Stock under this program.

        During 2008, we repurchased 10,495 shares of outstanding Common Stock under this program at a total cost of $238,046.

        These shares repurchases positively impacted our diluted earnings per share by $0.06 for the year ended December 31, 2008.

        Shares acquired through our repurchase programs described above are open-market purchases or privately negotiated transactions in compliance with SEC Rule 10b-18.

        Under our Restated Certificate of Incorporation, as amended, we have the authority to issue 820,000 shares with a par value of $.01 per share of which 800,000 represent shares of Common Stock, 10,000 represent shares of preferred stock and 10,000 represent shares of Series Common Stock. The preferred stock and Series Common Stock can be issued with varying terms, as determined by the Board of Directors.

Debt

        In recent years, we have increased debt levels to balance appropriately the objective of generating an attractive cost of capital with providing us with a reasonable amount of financial flexibility. At December 31, 2009, our debt totaled $1,244,653, and management does not believe that this level of debt poses a material risk to us due to the following factors:

•

in each of the last three years, we have generated strong net cash provided by operating activities in excess of $400,000;



•

at December 31, 2009, we had $380,343 in worldwide cash and cash equivalents;



•

at December 31, 2009, we had $571,089 of unused debt capacity under our existing bank credit facilities; and



•

we believe that we have the ability to obtain additional debt capacity outside of our existing debt arrangements.

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        The following table summarizes our long-term debt at December 31, 2009 and December 31, 2008:

        In February 2008, we closed a private placement transaction pursuant to which we issued $105,000 of seven-year debt at a fixed rate of 5.58%, and $135,000 of ten-year debt at a fixed rate of 5.99% to several highly rated insurance companies. We used the proceeds for share repurchases (see Note 14 to our Consolidated Financial Statements) and to refinance existing debt.

        In July 2006, we entered into a $1,000,000 revolving credit facility with a syndicate of 12 banks ("Revolving Credit Facility") replacing our existing $700,000 facility. The terms of the Revolving Credit Facility extended the maturity of the facility in its entirety to a term of five years, maturing July 2011, reduced the borrowing margins, and increased subsidiary borrowing limits. Total borrowings under the Revolving Credit Facility were $428,911 and $582,895 at December 31, 2009 and December 31, 2008, respectively, all of which were classified as long-term. We define long-term lines as those where the lines are non-cancellable for more than 365 days from the balance sheet date by the financial institutions except for specified, objectively measurable violations of the provisions of the agreement. In general, rates for borrowing under the Revolving Credit Facility are LIBOR plus 55 basis points and can vary based on our Debt to EBITDA ratio. The weighted average interest rates for our lines were 0.85% and 1.36% at December 31, 2009 and December 31, 2008, respectively. In addition, we are required to pay a commitment fee on any unused portion of the facilities of 0.01%. At December 31, 2009, we had approximately $571,089 available under our existing bank credit facilities.

        In June 2006, we closed a $50,000 three-year term loan with a bank. The term loan allows us to borrow at a floating rate with a lower borrowing margin than our revolving credit facility. The term loan also provides us with two one-year options to extend the term at our discretion. In August 2008, we exercised the first one-year option to extend the term through June 2010, and in June 2009 we exercised the second one-year option to extend the term through June 2011. We used the proceeds to refinance existing debt borrowed under the revolving credit facility.

        In April 2006, we closed a private placement transaction pursuant to which we issued $150,000 of ten-year notes to two highly rated insurance companies at a fixed rate of 5.55%. We used the proceeds to refinance existing debt of $150,000 drawn under a short-term credit agreement with a bank in January 2006.

        In January 2006, we closed a private placement transaction pursuant to which our Japanese subsidiary issued 34,395,000 Japanese Yen seven-year debt (equal to $300,000 at date of issuance) to

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several highly rated insurance companies at a fixed rate of 1.70%. We used the proceeds to refinance existing debt in Japan.

        Our financing arrangements provide for certain covenants and events of default customary for similar instruments, including in the case of our main bank arrangements, the private placement transactions, and the term loan, covenants to maintain specific ratios of consolidated total indebtedness to EBITDA and of EBITDA to certain fixed charges. At December 31, 2009, we were in compliance with these financial debt covenants.

Severance, Impairment and Other Charges

        In response to accelerating healthcare marketplace dynamics compounded by a sustained economic downturn, during the third quarter of 2009, we committed to a streamlining program (the "Plan") designed to eliminate approximately 850 positions in all areas of our business and in all regions in which we operate; however, the majority of actions are planned for our EMEA region. As a result of our Plan to reduce and consolidate the number of operating units, the Plan further includes charges for certain real estate lease impairments along with related accelerated depreciation.

        The actions under the Plan were intended to: 1) streamline our EMEA region organization, including right-sizing the headquarters function, reducing and consolidating the number of operating units across the region, and improving the productivity of production and development activities; 2) leverage the foundational investments in process improvements we have made to reduce costs and improve productivity in our Sales, Finance, Human Resources and Customer Delivery and Development organizations; 3) reduce capacity and align the size of the Sales and Management Consulting teams in areas of reduced client demand; and 4) continue to build and invest in high-value, strategic growth areas, which include extending our capabilities in specialty and patient-centered insights, in serving payers and governments, and in emerging markets for pharmaceuticals.

        During the third quarter of 2009 we recorded $104,301 in Severance, impairment and other charges for employee termination benefits and facility exit costs and $2,024 in accelerated Depreciation and other amortization related to the facility exits. During the fourth quarter of 2009, we recorded an additional $1,272 in Severance, impairment and other charges for facility exit costs and $2,166 in accelerated Depreciation and other amortization related to the facility exits.

        The severance benefits were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. Employee termination actions under the Plan are expected to be completed by the end of the third quarter of 2010.

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(1)

Rental expense under real estate operating leases for the years 2009, 2008 and 2007 was $35,195, $35,028 and $35,646, respectively.

(2)

Expense under data and telecommunications contracts for the years 2009, 2008 and 2007 was $211,530, $182,819 and $165,230, respectively.

(3)

Rental expense under computer and other equipment leases for the years 2009, 2008 and 2007 was $21,077, $20,723 and $24,299, respectively. These leases are frequently renegotiated or otherwise changed as advancements in computer technology produce opportunities to lower costs and improve performance.

(4)

Our contributions to pension and other postretirement benefit plans for the years 2009, 2008 and 2007 were $10,231, $12,120 and $9,473, respectively. The estimated contribution amount shown for 2010 includes both required and discretionary contributions to funded plans as well as benefit payments from unfunded plans. The majority of the expected contribution shown for 2010 is required.

(5)

Amounts represent the principal balance plus estimated interest expense based on current interest rates under our long-term debt (see Note 9 to our Consolidated Financial Statements).

(6)

Includes estimated future funding requirements related to pension and postretirement benefits (see Note 10 to our Consolidated Financial Statements) and the long-term portions of the 2009 and 2007 severance, impairment and other charges (see Note 6 to our Consolidated Financial Statements). As the timing of future cash outflows is uncertain, the following long-term liabilities (and related balances) are excluded from the above table: deferred taxes ($70,549) and uncertain tax benefits reserve ($69,041).

(a)

"Non-GAAP" measures differ from "U.S. GAAP" measures for each year presented by amounts that are detailed above. Non-GAAP measures are used by management for the purposes of global business decision-making, including developing budgets and managing expenditures. Non-GAAP measures exclude certain U.S. GAAP measures to the extent that management believes exclusion will facilitate comparisons across periods and more clearly indicate trends. Although we disclose Non-GAAP measures in order to give investors a view of our business as seen by management, these Non-GAAP measures are not prepared specifically for investors, are not prepared under a comprehensive set of accounting rules, and are not a replacement for the more comprehensive information for investors included in our U.S. GAAP financial statements. Our Non-GAAP measures differ in significant respects from U.S. GAAP and are likely to differ from the Non-GAAP measures used by other companies.

(b)

Represents $11,000 of expense for professional services consisting of investment banker, legal and accounting fees related to the proposed acquisition of IMS by Healthcare Technology Holdings, Inc., an entity created by certain affiliates of TPG Capital, L.P. and the Canada Pension Plan Investment Board (see Note 16 to our Consolidated Financial Statements).

(c)

Represents $105,573 of severance, impairment and other charges recorded in the second half of 2009 for employee termination benefits and facility exit costs as a result of the streamlining program we announced in July 2009 in response to accelerating healthcare marketplace dynamics compounded by a sustained economic downturn. Additionally, we recorded $4,190 of accelerated depreciation and amortization charges related to exited facilities which are included in Depreciation and other amortization. See Note 6 to our Consolidated Financial Statements. Severance, impairment and other charges were also recorded in 2000, 2001, 2003, 2004 and 2007 and there can be no assurances that such charges will not be recorded in the future.

(d)

Represents $38,712 of impairment and other charges recorded in the second and fourth quarters of 2009 for the write-down of certain capitalized software and prepaid assets to their net realizable values, supplier contract-related charges to be incurred with no future economic benefit, capital

contributed by selling shareholders of a previously acquired business, partially offset by reversals related to our 2007 restructuring plan (see Note 6 to our Consolidated Financial Statements).

(e)

Represents expense incurred of $3,748 recorded in 2008 related to our Government Solutions subsidiary (see Note 15 to our Consolidated Financial Statements). This subsidiary had discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS in May 2005). Upon discovery of the potential noncompliance, we began remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and were accepted into the Department of Defense Voluntary Disclosure Program. We filed our Voluntary Disclosure Program Report ("Disclosure Report") on August 29, 2008. Based on our findings as disclosed in the Disclosure Report, we recorded a reserve of approximately $3,748 for this matter in the third quarter of 2008. We are currently unable to determine the outcome of this matter pending the resolution of the Voluntary Disclosure Program process and our ultimate liability arising from this matter could exceed our current reserve. For geographical reporting purposes, this subsidiary is included in our Americas region.

(f)

Represents $9,408 of impairment charges in 2008 for the write-off of certain capitalized software assets in our EMEA and Asia Pacific regions resulting from the discontinuation of certain IMS products at the end of 2008 (see Note 6 to our Consolidated Financial Statements).

(g)

Represents $88,690 of severance, impairment and other charges in 2007, including severance for approximately 1,070 employees and write-downs of two impaired assets and related contract payments to be incurred with no future economic benefit based on our decision to abandon certain products in our EMEA region (see Note 6 to our Consolidated Financial Statements).