SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-14049
IMS HEALTH INCORPORATED SAVINGS PLAN
IMS HEALTH INCORPORATED
200 NYALA FARMS, WESTPORT, CT 06880
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Compensation and Benefits Committee of IMS Health Incorporated has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
IMS Health Incorporated
/S/ JAMES C. MALONE
-------------------------
James C. Malone
Chief Financial Officer
June 28, 2000
2
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
DECEMBER 31, 1999
INDEX TO FORM 11-K
PAGE (S)
Report of Independent Accountants .................................... 4
Financial Statements:
Statement of Net Assets Available for Benefits with Fund Information
as of December 31, 1999 and December 31, 1998 .................... 5
Statement of Changes in Net Assets Available for Benefits for the
year ended December 31, 1999 ...................................... 6
Notes to Financial Statements ......................................... 7 - 10
Supplemental Schedules:
Line 27a: Schedule of Assets Held for Investment Purposes ........... 11
Exhibit Index ......................................................... 12
Exhibit 23 -- Consent of Independent Accountants ...................... 13
3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator and Plan Participants of
IMS Health Incorporated Savings Plan:
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statement of changes in net
assets available for benefits with fund information present fairly, in all
material respects, the net assets available for benefits of the IMS Health
Incorporated Savings Plan as of December 31, 1999 and 1998, and the changes in
net assets available for benefits for the year ended December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules listed
in the index on page 3 are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/S/ PRICEWATERHOUSECOOPERS LLP
---------------------------------------
PRICEWATERHOUSECOOPERS LLP
New York, New York
June 28, 2000
4
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
(DOLLARS IN THOUSANDS)
DECEMBER 31, December 31,
1999 1998
------------ ------------
Investments at fair value ................... $115,550 $ 96,178
Due from broker for securities sold ......... 215 --
Loan and interest receivable ................ 136 4
Receivables:
Members contributions ..................... 502 630
Company contributions ..................... 106 136
-------- --------
Net assets available for benefits ........... $116,509 $ 96,948
======== ========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
Total
---------
ADDITIONS TO NET ASSETS
Attributed to:
Transfer in from Other Trustee ............................. $ 1,234
Investment Income:
Net appreciation/(depreciation) ............................ 11,009
Interest and dividend income ............................... 1,834
---------
Total Investment Income .................................. 12,843
---------
Contributions:
Members .................................................. 8,912
Company .................................................. 2,990
Rollover ................................................. 553
---------
Total Contributions .................................... 12,455
---------
Total additions ............................................ 26,532
---------
DEDUCTIONS FROM NET ASSETS
Attributed to:
Benefits paid to members ................................... (6,971)
---------
Total Deductions ......................................... (6,971)
Net Increase ............................................... 19,561
Net assets available for benefits:
Beginning of year ........................................ 96,948
---------
End of year .............................................. $ 116,509
=========
The accompanying notes are an integral part of these financial statements
6
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Dollar amounts in thousands
NOTE 1. DESCRIPTION OF THE PLAN
The following description of the IMS Health Incorporated Savings Plan (the
"Plan") provides only general information. Participating members ("Members")
should refer to the Plan document for a more complete description of the Plan's
provisions. Information with regard to eligibility, contributions,
distributions, vesting, Bankers Trust (the "Trustee"), withdrawals, restoration,
loans, fund redistribution, and definitions of all terms are contained in that
document.
GENERAL
The Plan is a defined contribution plan available to all U.S. employees of IMS
Health Incorporated ( the "Company") and certain of its subsidiaries which have
been designated to participate in the Plan. Full-time and regular part-time
employees are eligible to participate in the Plan in the first month following
their first day of employment. Temporary employees who work at least 1,000 hours
in their first year of employment, or any subsequent calendar year, are also
eligible to participate. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
INVESTMENTS
The following investments represent 5% or more of the net assets available for
benefits:
December 31
1999 1998
------- --------
BGI Equity Index Fund A $ 61,397 $ --
BGI Extended Equity Market Fund $ 7,075 $ 4,993
IMS Health Common Stock $ 9,333 $ 10,511
Wells Fargo Equity Index Fund $ -- $ 49,798
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$11,009 as follows:
Commingled trust funds $13,293
Common stock ($ 2,284)
NOTE 2. ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Plan were prepared under the accrual method of
accounting. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of investment income and expenses during the
reporting period. Significant estimates relate to investment valuation. Actual
results could differ from those estimates.
The Plan provides for various investment options in any combination of stocks,
bonds, fixed income securities, mutual funds, and other investment securities.
Certain investment securities are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect members' account balances and
the amounts reported in the statement of net assets available for benefits and
the statement of changes in net assets available for benefits. The plan has no
formal policy requiring collateral to support the financial instruments held by
Bankers Trust. The investments held by Bankers Trust are primarily invested in
commingled trust funds. Certain funds invest in corporate debt instruments. The
issuer's ability to meet these obligations may be affected by economic
developments in their respective industries.
7
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Dollar amounts in thousands, except member data
INVESTMENTS
The Plan's guaranteed investment contracts are stated at contract values, which
represent the aggregate amount of deposits thereto, plus interest at the
contract rate, less withdrawals. Commingled funds are valued at the net asset
values reported by the funds. Company stock is valued at its quoted market
price. Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
The Plan presents in the statement of changes in net asses available for
benefits, the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
CONTRIBUTIONS
A member may elect to contribute 1% to 16% of compensation. A member may
designate savings as before-tax Savings or after-tax Savings. A member who is a
highly compensated employee may be limited to less than 16% due to the existence
of certain tests required under the Internal Revenue Code (the "Code"). For
1999, the Code limit on before-tax contributions was $10,000 in the aggregate.
The Company matches an amount equal to 50% of a member's savings, up to the
first 6%. Member savings in excess of 6% are supplemental savings that are not
matched by Company contributions. Matching Company contributions are invested in
the same investment funds as the member's own contributions. The member's
contributions and the Company's matching contributions are forwarded monthly to
the Trustee.
MEMBER ACCOUNTS
Each member's account is credited with the member's actual contribution and
allocations of the Company's contributions and Plan earnings.
VESTING
Members are 100% vested in the Company's matching contributions after the third
year of employment with credit given for employment with the Company's
predecessors. Notwithstanding the foregoing statement, a member becomes fully
vested in their Company contribution account upon retirement, disability, death,
or reaching age 65.
MEMBERS LOANS
Members may borrow from their fund accounts a minimum of $500 up to a maximum
equal to the lesser of 50 percent of their vested account balance or $50,000
minus the highest outstanding loan balance they had in the preceding 12 months.
The maximum loan term is 57 months or up to 117 months for the purchase of a
primary residence. The loans are secured by the balance in the members account
and bear interest at the prime rate at the date of the loan as published in The
Wall Street Journal plus 2%. Principal and interest are paid on a monthly basis
ratably through payroll deductions. The default of a loan note is deemed a
taxable distribution of the unpaid balance. The loan balance was $2,600 and
$2,470 as of December 31, 1999 and 1998 respectively.
PAYMENTS OF BENEFITS
Benefits are recorded when paid. On termination of service due to death,
disability, retirement or other reasons, a member may elect to receive a lump
sum amount equal to the value of the member's vested interest in his or her
account, or subject to certain conditions, annual installments over a period not
greater than twenty years. Members may also elect to defer distributions subject
to certain conditions.
8
<PAGE>
FORFEITURES
A member who is not 100% vested in his or her Company contributions and is
terminated for reasons other than retirement, death or disability shall forfeit
his or her non-vested Company contributions. Forfeited amounts shall be applied
to reduce subsequent Company contributions. In the event the employee is
subsequently re-employed by the Company prior to incurring 5 consecutive one
year breaks in service, such forfeited amount of his or her Company
contributions shall be restored to his or her account. Amounts forfeited for the
year January 1, 1999 to December 31, 1999 were not significant and have been
used to reduce Company contributions for the plan year ended December 31, 1999.
ADMINISTRATIVE EXPENSES
Transaction and investment manager fees for each fund are charged against the
Plan's assets and related rates of return. Trustee fees and other expenses of
administering the Plan are borne by the Company.
TRANSFER IN FROM OTHER TRUSTEE
During 1999, the Emron, Inc. 401(k) Savings & Investment Plan was merged with
IMS Health Incorporated Savings Plan. This plan merger did not occur until 1999
due to certain financial penalties which would have been incurred by Emron
participants if the funds had been transferred prior to that date.
NOTE 3. FEDERAL INCOME TAX
The plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended. A request for formal determination that the Plan is
qualified and the trust established under the Plan is tax-exempt will be made to
the Internal Revenue Service in the near future. In the opinion of management, a
favorable ruling is expected in due course. The Plan administrator and the
Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the Internal Revenue
Code ("the Code").
NOTE 4. PLAN TERMINATION
While the Company has not expressed any intent to discontinue its contributions
or terminate the Plan, it is free to do so at any time subject to the provisions
of ERISA and the Code which state that, in such event, all members of the Plan
shall be fully vested in the amounts in their accounts.
9
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Dollar amounts in thousands
NOTE 5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Net assets available for benefits per the financial statements $116,509 $96,948
Amounts requested by members for withdrawals and distributions at
December 31, but paid in subsequent years (848) (393)
------- -------
Net assets available for benefits per the Form 5500 $115,661 $96,555
======== =======
</TABLE>
The following is a reconciliation of withdrawals and distributions paid to
members per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
<S> <C>
Withdrawals and distributions paid to members per the financial statements $6,971
Add:
Amounts requested by members for withdrawals and distributions at December 31,
1999 but paid in 2000 848
Less:
Amounts requested by members for withdrawals and distributions at December 31,
1998 but paid in 1999 (393)
------
Withdrawal and distributions paid to members per the Form 5500 $7,426
======
</TABLE>
Withdrawals and distributions to participants recorded on the Form 5500 for
benefit claims include amounts that have been processed and approved for payment
prior to December 31 but not paid as of that date.
NOTE 6. SUBSEQUENT EVENT
The Company recently announced a plan to spin off "New Strategic Technologies"
(the "Distribution"). New Strategic Technologies includes, (i) the
pharmaceutical industry automated sales and marketing support business of IMS
Health Strategic Technologies, Inc. and certain other foreign subsidiaries of
IMS HEATH, (ii) substantially all of IMS Health's interactive and direct
marketing business, of Clark-O-Neill, and (iii) a 51% interest in Permail Pty.
Ltd. The transaction is anticipated to be completed in the third quarter of
2000. In connection with the transaction the plan assets of the active members
employed by New Strategic Technologies may be transferred to a new Plan
established by New Strategic Technologies.
The company recently announced the execution of an agreement providing for the
sale of its ERISCO Managed Care Technologies, Inc. a wholly owned subsidiary to
The TriZetto Group Inc. The transaction is expected to be completed in the third
quarter of 2000. In connection with the transaction the Plan assets of the
active members employed by ERISCO Managed Care Technologies, Inc. may be
transferred to a new Plan established by the TriZetto Group Inc.
During 2000 the plan changed its record keeper and plan trustee to
CIGNA/CG Trust.
10
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
Dollar amounts
<TABLE>
<CAPTION>
Line 27a - Schedule of Assets Held for Investment purposes as of December 31, 1999
Description of Asset Cost Fair Value
---------------------------------------------------------- -------- ----------
<S> <C> <C>
BT Pyramid Directed Account Cash Fund $ 77 $ 77
BGI Equity Index Fund A 24,681 61,397
BGI US Debt Fund 2,008 2,071
BGI US Debt Fund E 77 76
BGI Extended Equity Market Fund E 288 321
BGI Extended Equity Market Fund 4,773 7,075
BGI Miscellaneous Fund Malaysia 8 22
BGI Equity Market Fund E 746 773
IMS Health Common Stock 9,201 9,333
Gartner Group Inc. 744 440
BGI EAFE Equity Index Fund E 1,483 1,740
BGI EAFE Equity Index Fund A 2,192 3,170
Allstate - Rate 6.24% Matures on 10/1/2001 940 940
Allstate - Rate 5.28% Matures on 10/1/2002 2,371 2,371
John Hancock - Rate 6.22% Matures on 4/3/2000 552 552
John Hancock - Rate 6.12% Matures on 4/2/2001 1,916 1,916
John Hancock - Rate 5.66% Matures on 4/3/2001 1,493 1,493
John Hancock - Rate 6.01% Matures on 4/1/2002 996 996
John Hancock - Rate 6.69% Matures on 4/1/2005 1,608 1,608
Metropolitan Life - Rate 6.15% Matures on 10/2/2000 398 398
Metropolitan Life - Rate 6.693% Matures on 10/1/2000 1,898 1,898
Metropolitan Life - Rate 6.08% Matures on 10/1/2001 2,135 2,135
Metropolitan Life - Rate 6.75% Matures on 10/2/2001 963 963
New York Life - Rate 5.70% Matures on 4/1/2003 3,111 3,111
New York Life - Rate 6.25% Matures on 4/3/2000 613 613
New York Life - Rate 7.17% Matures on 10/2/2000 3,197 3,197
Principal Mutual - Rate 6.40% Matures on 10/2/2000 928 928
Principal Mutual - Rate 7.22% Matures on 10/2/2002 3,336 3,336
Member Loans 2,600 2,600
-------- ---------
Total Investment $ 75,333 $ 115,550
======== =========
</TABLE>
11
<PAGE>
IMS HEALTH INCORPORATED SAVINGS PLAN
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------------------------------------------------
EX - 23 Consent of Independent Accountants
12
