UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 31, 2007
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IMS HEALTH INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
001-14049 06-1506026
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(Commission File Number) (IRS Employer Identification No.)
901 Main Avenue, Norwalk, Connecticut 06851
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(Address of Principal Executive Offices) (Zip Code)
(203) 845-5200
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities
In response to healthcare marketplace dynamics, in December 2007, the
Company completed a review of its business and on December 31, 2007 committed to
a Streamlining Program designed to eliminate approximately 1,050 positions in
production and development, sales, marketing, consulting and services and
administration (the "Plan"). The Plan also includes the impairment of two assets
as a result of the business review.
This Plan will result in the Company recording a severance, impairment and
other charge during the fourth quarter of 2007 relating to termination benefits
for employees located in all regions in which the Company operates as well as
asset impairment charges in our Europe, Middle East and Africa region.
The Plan includes the following actions:
a) Right-size the Company's business support functions across business
lines, as well as in marketing, finance and administration. IMS
plans to reduce organizational layers, particularly at the regional
headquarters level. In addition, the company will discontinue its
mass market initiative in the United Kingdom, resulting in an asset
impairment charge.
b) Accelerate the Company's quality and efficiency plans in its
customer delivery & development organization. This includes
consolidating select production operations, moving to common
production platforms in several geographies, and improving
productivity of the Company's statistics and data management
operations worldwide.
c) Re-align the Company's go-to-market resources to better address
customer priorities and improve execution. As a result, the Company
will strengthen its account management and business development
capabilities, streamline consulting practice areas, as well as
accelerate the implementation of business process outsourcing
services for clients.
The Company currently estimates that the total pre-tax charge under the
Plan will be in the range of $86 to $90 million, consisting of $70 to $74
million for employee termination benefits and $16 to $18 million for asset
impairments.
The cash portion of the charge will be in the range of $72 to $77 million
and will be funded over approximately a two-year period from cash generated from
operations. The estimated termination benefits under the Plan were calculated
pursuant to the terms of established employee protection plans, individual
employee contracts or in accordance with local statutory minimum requirements,
as applicable.
The Company expects that all actions under the plan will be completed by
the end of 2008.
In October 2007, the Company updated its earnings guidance related to the
Company's business for full-year 2007. The estimated $86 to $90 million pre-tax
severance, impairment and other charge under the Plan was not considered in that
guidance.
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The Company will provide additional details on January 31, 2008 during
IMS's regular conference call with the investment community to review its
fourth-quarter and full-year 2007 results. At that time, executive management
also will provide financial guidance for 2008.
On January 4, 2008, the Company issued a press release announcing the
Plan. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
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99.1 Press Release issued by IMS Health Incorporated, dated
January 4, 2008.
This current report on Form 8-K may contain forward-looking statements.
Actual events or results may differ materially from those statements. For
information about factors that could cause such differences, please refer to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 2007,
including the information set forth under the caption "Forward-Looking
Statements."
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMS Health Incorporated
(Registrant)
By: /s/ Robert H. Steinfeld
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Name: Robert H. Steinfeld
Title: Senior Vice President,
General Counsel and
Corporate Secretary
Date: January 4, 2008
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EXHIBIT INDEX
99.1 Press release issued by IMS Health Incorporated, dated January 4, 2008.