<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
COMMISSION FILE NUMBER 1-8260
PRIMARK CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MICHIGAN 38-2383282
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 WINTER STREET, SUITE 4300N, WALTHAM, MA 02451-1241
(Address of principal executive offices) (Zip Code)
</TABLE>
781-466-6611
(Registrant's telephone number, including area code)
NO CHANGES
(Former name, former address and former fiscal year,
if changed since last report)
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 [X] NO [ ]
Number of shares outstanding of each of the registrant's classes of common
stock, as of October 30, 1999:
Common Stock, without par value: 19,987,445
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<PAGE> 2
PRIMARK CORPORATION
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
COVER....................................................... i
INDEX....................................................... ii
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements............................. 1
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition............ 11
Item 3. Quantitative and Qualitative Disclosures about
Market Risk...................................... 16
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................. 16
SIGNATURE................................................... 17
</TABLE>
ii
<PAGE> 3
PART I
FINANCIAL INFORMATION
PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents, at cost (which approximates
market value)........................................... $ 14,912 $ 51,630
Billed receivables less allowance for doubtful accounts of
$5,125 and $3,762, respectively......................... 101,552 88,770
Unbilled and other receivables............................ 16,395 13,203
Other current assets...................................... 17,578 15,806
Net assets of discontinued operations..................... -- 8,900
-------- --------
150,437 178,309
-------- --------
DEFERRED CHARGES AND OTHER ASSETS
Goodwill, less accumulated amortization of $94,443 and
$81,048, respectively................................... 591,068 526,624
Capitalized data and other intangible assets, less
accumulated amortization of $35,158 and $29,670,
respectively............................................ 40,891 38,703
Capitalized software, less accumulated amortization of
$25,628 and $18,578, respectively....................... 51,378 37,765
Other..................................................... 13,290 9,797
-------- --------
696,627 612,889
-------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST
Computer equipment........................................ 83,220 79,837
Leasehold improvements.................................... 21,202 19,267
Other..................................................... 30,982 10,901
-------- --------
135,404 110,005
Less-accumulated depreciation............................. (72,225) (58,649)
-------- --------
63,179 51,356
-------- --------
Total Assets............................................ $910,243 $842,554
======== ========
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable............................................. $102,561 $ 6,750
Accounts Payable.......................................... 9,776 12,059
Accrued employee payroll and benefits..................... 41,168 31,924
Taxes payable............................................. 21,442 41,318
Deferred income........................................... 85,072 80,004
Current portion of long-term debt, including capital lease
obligations............................................. 532 640
Other..................................................... 59,219 53,441
-------- --------
319,770 226,136
-------- --------
LONG-TERM DEBT AND OTHER NON-CURRENT LIABILITIES
Long-term debt, including capital lease obligations....... 150,492 151,489
Deferred income taxes..................................... 9,274 9,599
Other..................................................... 14,382 15,152
-------- --------
174,148 176,240
-------- --------
Total liabilities....................................... 493,918 402,376
COMMITMENTS AND CONTINGENCIES (NOTE 6)
COMMON SHAREHOLDERS' EQUITY
Common stock and additional paid-in-capital............... 58,818 90,239
Retained earnings......................................... 366,812 355,380
Accumulated other comprehensive (loss).................... (9,305) (5,441)
-------- --------
Total common shareholders' equity....................... 416,325 440,178
-------- --------
Total liabilities and shareholders' equity................ $910,243 $842,554
======== ========
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
1
<PAGE> 4
PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C>
OPERATING REVENUES.......................................... $122,675 $108,534 $362,189 $321,819
OPERATING EXPENSES
Cost of services.......................................... 49,418 45,020 148,758 129,221
Selling, general and administrative....................... 45,613 40,284 136,787 120,933
Depreciation.............................................. 5,048 4,328 15,064 12,831
Amortization of goodwill.................................. 4,833 3,820 13,700 11,755
Amortization of other intangible assets................... 4,392 2,991 12,769 12,164
Restructuring Charge...................................... -- -- (4) 68,677
-------- -------- -------- --------
Total operating expenses................................ 109,304 96,443 327,074 355,581
-------- -------- -------- --------
Operating income........................................ 13,371 12,091 35,115 (33,762)
-------- -------- -------- --------
OTHER INCOME AND (DEDUCTIONS)
Interest income and (expense) -- net...................... (5,182) (894) (13,326) (4,489)
Other income and (expense) -- net......................... 308 (604) 131 (293)
-------- -------- -------- --------
Total other income and (deductions)..................... (4,874) (1,498) (13,195) (4,782)
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES..................................................... 8,497 10,593 21,920 (38,544)
INCOME TAX EXPENSE (BENEFIT)................................ 3,725 4,682 10,269 (100)
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS.................... 4,772 5,911 11,651 (38,444)
DISCONTINUED OPERATIONS
Discontinued operations, net of income tax
(benefit)/expense of $0, $103, $0 and $(700),
repectively............................................. -- 1,835 -- 7,947
Gain on disposal of discontinued operations net of income
tax expense of $0, $7,683, $0 and $108,735,
respectively............................................ -- 14,189 -- 187,414
-------- -------- -------- --------
Total discontinued operations........................... -- 16,024 -- 195,361
-------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE............................ 4,772 21,935 11,651 156,917
Extraordinary item-loss on early extinguishment of debt,
net of income tax benefit of $0, $0, $0 and $3,614,
respectively............................................ -- -- -- (5,121)
-------- -------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE................................................. 4,772 21,935 11,651 151,796
Cumulative effect of change in accounting principle, net
of income tax benefit of $0, $0, $109 and $0,
respectively............................................ -- -- (219) --
-------- -------- -------- --------
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 4,772 $ 21,935 $ 11,432 $151,796
======== ======== ======== ========
EARNINGS PER COMMON SHARE -- BASIC
Income (loss) from continuing operations.................. $ 0.23 $ 0.27 $ 0.56 $ (1.52)
Discontinued operations................................... -- 0.73 -- 7.71
Extraordinary item........................................ -- -- -- (0.20)
Cumulative effect of change in accounting for derivative
financial instruments................................... -- -- (0.01) --
-------- -------- -------- --------
Total earnings per share................................ $ 0.23 $ 0.99 $ 0.55 $ 5.99
======== ======== ======== ========
EARNINGS PER COMMON SHARE -- ASSUMING DILUTION
Income from continuing operations......................... $ 0.23 $ 0.26 $ 0.55 $ (1.52)
Discontinued operations................................... -- 0.70 -- 7.71
Extraordinary item........................................ -- -- -- (0.20)
Cumulative effect of change in accounting for derivative
financial instruments................................... -- -- (0.01) --
-------- -------- -------- --------
Total earnings per share................................ $ 0.23 $ 0.96 $ 0.54 $ 5.99
======== ======== ======== ========
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING
Basic..................................................... 20,358 22,088 20,634 25,343
Effect of Dilutive Securities............................. 564 709 498 --
-------- -------- -------- --------
Diluted................................................... 20,922 22,797 21,132 25,343
-------- -------- -------- --------
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
2
<PAGE> 5
PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1999 1998
----------- -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................. $ 11,432 $ 151,796
Adjustments to reconcile net income to net cash flows from
operating activities:
Discontinued operations................................... -- (7,947)
Gain on sale of subsidiary................................ -- (187,414)
Restructuring Charge -- intangible assets................. -- 60,650
Extraordinary loss on early extinguishment of debt........ -- 5,121
Cash (contributed to) discontinued operations............. -- (9,270)
Depreciation and amortization............................. 41,533 36,750
Other charges and credits -- net.......................... (6,316) (5,455)
Changes in operating working capital, excluding the effect
of acquisitions:
(Increase) in billed, unbilled and other
receivables -- net.................................... (12,528) (14,584)
Decrease (increase) in other current assets............ 5,957 (3,392)
(Decrease) increase in accounts payable................ (1,948) 1,581
Increase in accrued payroll and benefits............... 9,783 1,587
Increase in income and other taxes payable -- net...... 198 8,164
(Decrease) increase in deferred income................. (7,625) 1,495
Increase in other current liabilities.................. 3,656 13,228
--------- ---------
Net cash provided from operating activities.......... 44,142 52,310
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of short-term notes payable...................... 738,838 665,135
Repayment of short-term notes payable..................... (644,570) (599,172)
Repayment of long-term debt............................... (5,500) (332,504)
Common stock repurchased and retired...................... (36,842) (195,417)
Common stock issuance..................................... 5,421 8,909
Debt issue costs and other................................ (2,052) (939)
Call premium.............................................. -- (4,900)
--------- ---------
Net cash provided by (used for) financing
activities.......................................... 55,295 (458,888)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures...................................... (25,590) 14,486)
Capitalized software...................................... (18,468) (12,591)
Purchase of subsidiaries -- net of acquired cash.......... (79,118) (4,826)
Proceeds from sale of discontinued operations............. 8,900 502,000
Tax paid on disposal of discontinued operations........... (21,381) (43,000)
Other -- net.............................................. -- 171
Cash (contributed to) discontinued operations............. -- (3,495)
--------- ---------
Net cash (used for) provided by investing
activities.......................................... (135,657) 423,773
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH..................... (498) 47
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........ (36,718) 17,242
CASH AND CASH EQUIVALENTS, JANUARY 1........................ 51,630 12,780
--------- ---------
CASH AND CASH EQUIVALENTS, SEPT 30.......................... $ 14,912 $ 30,022
========= =========
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
3
<PAGE> 6
PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
(IN THOUSANDS OF
DOLLARS)
<S> <C>
COMMON STOCK
Balance -- beginning of period.............................. $ 425
Issued for employee stock purchase and option plans......... 6
Retirement of common stock.................................. (30)
--------
Balance at September 30..................................... 401
--------
ADDITIONAL PAID IN CAPITAL
Balance -- beginning of period.............................. 89,814
Tax benefit relating to stock option plans.................. 1,025
Issued for employee stock purchase and option plans......... 4,390
Retirement of common stock.................................. (36,812)
--------
Balance at September 30..................................... 58,417
--------
RETAINED EARNINGS
Balance -- beginning of period.............................. 355,380
Net income.................................................. 11,432
--------
Balance at September 30..................................... 366,812
--------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance -- beginning of period.............................. (5,441)
Net gain on derivative instruments designated as cash flow
hedges.................................................... 298
Foreign currency translation adjustments.................... (4,162)
--------
Balance at September 30..................................... (9,305)
--------
TOTAL COMMON SHAREHOLDERS' EQUITY........................... $416,325
========
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
4
<PAGE> 7
PRIMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
------------------ ------------------
1999 1998 1999 1998
------- -------- ------- --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
NET INCOME............................................. $4,772 $21,935 $11,432 $151,796
------ ------- ------- --------
Other comprehensive income, net of tax:
Net (loss) gain on derivative instruments designated as
cash flow hedges..................................... (38) -- 298 --
Cumulative translation adjustment...................... 4,128 1,239 (4,162) 562
------ ------- ------- --------
OTHER COMPREHENSIVE INCOME (LOSS)...................... 4,090 1,239 (3,864) 562
------ ------- ------- --------
COMPREHENSIVE INCOME (LOSS)............................ $8,862 $23,174 $ 7,568 $152,358
====== ======= ======= ========
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
5
<PAGE> 8
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ACQUISITIONS
During 1999, the Company made the acquisitions described below, each of
which has been accounted for as a purchase. Accordingly, the purchase price has
been allocated on a preliminary basis to the identifiable net assets acquired
based upon estimates of their fair market values as of the acquisition dates and
the excess of purchase price over the estimated fair value of total net assets
acquired was allocated to goodwill. The consolidated financial statements
include the operating results of each business from the date of acquisition.
<TABLE>
<CAPTION>
REMAINING
20%
INTEREST IN
WORLDSCOPE A-T EXTEL
----------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash................................................. $ 9,000 $35,306 $30,669
Convertible Notes Issued............................. 7,000
Acquisition Fees..................................... 825 1,250
Other................................................ -- 34 --
------- ------- -------
Total Consideration............................. $16,000 $36,165 $31,919
Acquired Cash........................................ -- (1,253) --
------- ------- -------
Net Consideration............................... $16,000 $34,912 $31,919
======= ======= =======
Excess of Purchase Price over Fair Value............. $16,566 $30,029 $30,283
======= ======= =======
</TABLE>
a. A-T
On February 5, 1999, Primark acquired all of the outstanding shares of A-T
for $34.9 million, which is net of acquired cash. The excess of purchase price
over fair value of net assets acquired of approximately $30.0 million is being
amortized on a straight-line basis over 40 years. Founded in 1987, A-T's
customers are users of real time information, such as money managers, traders,
banks and other institutional investors.
b. Extel
On February 19, 1999, the Company acquired the Company Fundamental Data
business and the Extel brand name ("Extel") from The Financial Times Group, part
of Pearson plc, for $31.9 million, subject to certain post closing adjustments.
The excess of purchase price over fair value of net assets acquired of
approximately $30.3 million is being amortized on a straight-line basis over 25
years. Extel is a widely recognized brand name in the European and Asian markets
and provides summarized company "tear sheets" for rapid corporate analysis,
historical company fundamental information, image-based data, textual corporate
profiles and company news to the investment industry worldwide.
c. Worldscope
On June 1, 1999, the Company acquired the remaining 20% minority interest
in Worldscope for $16.0 million, giving Primark 100% ownership of this business.
The purchase price consisted of a $9.0 million cash payment and two $3.5 million
convertible subordinated notes. The notes pay interest at 5%, have a maturity
date of June 1, 2014, are due upon demand at any time after January 1, 2000 and
are convertible into Primark common shares at a price of $30 per share. The
notes are callable by Primark in the event of a change in control. The excess of
the purchase price over the fair market value of net assets acquired of
approximately $16.6 million is being amortized on a straight line basis over 25
years. Worldscope produces a leading database covering global company financial
information on over 24,000 companies from 53 countries. A special feature
6
<PAGE> 9
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
of the Worldscope database is the standardization of company account information
to a common format for meaningful cross-border comparisons and analysis.
2. RESTRUCTURING AND INTEGRATION CHARGES
Effective June 1, 1998, the Company was reorganized in order to focus
solely on its information services businesses. In connection with this
reorganization, the Company recorded $68.7 million in operating expenses for
direct and other reorganization related costs in June 1998. The restructuring
charge included the write-off of intangible assets for (i) $25.0 million of
previously capitalized software related to the planned integration of several
product offerings on common software platforms, (ii) $1.5 million of data
determined to be duplicative and not usable as a result of database integration,
(iii) write-off of $23.9 million of goodwill associated with software and data,
which was established as part of purchase accounting, (iv) write-off of $7.2
million of goodwill related to DAFSA, and (v) write-off of $3.1 million of a
trademark no longer used in the restructured organization. The level of
impairment was determined based upon the discounted value of estimated future
cash flows.
The $68.7 million charge included $8.0 million related primarily to
termination benefits in the phased reduction of employees and the abandonment of
leased facilities, including leasehold improvements. Salaries and termination
benefits, either in the form of one-time or periodic payments, were made when
the employee ceased employment. These employees were in management, sales and
administrative support.
During the nine months ended September 1999, the Company decided not to
abandon certain leased space primarily as a result of acquisitions made since
the restructuring charge was recorded in June of 1998. Also the Company was able
to sub-lease or otherwise abandon certain leases for less than was originally
estimated. This resulted in a reduction of restructuring expense and the related
accrual of approximately $2,986,000. The Company also wrote off leasehold
improvements and amortized leases associated with abandoned space in an amount
equal to approximately $849,000.
During the nine months ended September 1999, as part of its integration
program, an additional $3,051,000 was incurred and paid to employees notified
and terminated in 1999.
The severance accrual was reduced by $780,000 during the nine months ended
September 30, 1999 due to $69,000 for amounts settled favorably, $887,000 for
severance amounts paid offset by $176,000 related to severance for under
accruals and for people notified in 1999.
As of September 30, 1999, the remaining accrual totaled $639,000. This
amount represents $438,000 related to the abandonment of leased facilities
expected to be paid out over the remainder of the applicable lease, and $201,000
related to two staff reductions to be completed in the fourth quarter.
Details of activity related to the restructuring and integration costs in
1998 and 1999 are as follows:
<TABLE>
<CAPTION>
UTILIZED DURING
NINE MONTHS
BALANCE ENDED BALANCE
DECEMBER 31, 1998 SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
----------------- ------------------ ------------------
(AMOUNTS IN 000'S)
<S> <C> <C> <C>
Abandonment of leased facilities,
including leasehold improvements........ $4,273 $3,835 $438
Salaries and termination benefits......... 981 780 201
------ ------ ----
Total..................................... $5,254 $4,615 $639
====== ====== ====
</TABLE>
7
<PAGE> 10
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the effect to the income statement for
restructuring items during the nine months ended September 30, 1999:
<TABLE>
<S> <C>
Salaries and termination benefits........................... $3,051
Leasehold and related items not abandoned due to recent
acquisitions or items settled for amounts less than
originally anticipated...................................... (2,986)
Salaries and termination benefits settled for amounts less
than anticipated.......................................... (69)
------
Total............................................. $ (4)
======
</TABLE>
3. REPURCHASE OF COMMON STOCK
On July 3, 1998, the Company implemented an open market purchase program to
buy up to 2,000,000 shares of its common stock from time to time, depending on
market conditions. On November 10, 1998, the Board of Directors approved an
expansion of the open market purchase program by an additional 2,000,000 shares,
bringing the total potential buyback to 4,000,000 shares. As a result, under the
two repurchase programs totaling 4,000,000 shares, the Company has purchased
3,064,046 shares through September 30, 1999, and had authority remaining to buy
back up to 935,954 additional shares of its common stock. For the nine months
ended September 30, 1999, 1,495,546 shares were purchased at a total cost of
$36.8 million. During October 1999, the Company repurchased 86,500 additional
shares.
4. CHANGE IN ACCOUNTING PRINCIPLE
Effective January 1, 1999, the Company adopted Statement of Financial
Accounting Standards No. 133, (FAS 133), "Accounting for Derivative Instruments
and Hedging Activities." FAS 133 requires the Company to recognize all
derivatives on the balance sheet at fair value. Depending on the nature of the
underlying exposure being hedged, changes in the fair value of derivatives are
either recognized in the statement of operations or other comprehensive income.
The ineffective portion of a derivative's change in fair value is recognized in
the statement of operations. In accordance with the Company's risk management
policy, Primark uses foreign currency options and foreign currency forward
contracts. The Company does not hold or issue derivative instruments for trading
purposes.
Forward and option contracts related to foreign exchange market risk are
utilized to reduce the exposure of the Company to excessive foreign currency
fluctuations. Significant portions of Primark's revenues are denominated in
currencies other than the U.S. Dollar. For the nine months ended September 30,
1999, approximately 58% of total revenues were denominated in non-U.S. Dollar
currencies. Approximately 34%, 18% and 6% were denominated in U.K. Sterling,
currencies of Continental Europe, and Asian currencies, respectively. The
majority of Primark's revenues are generated from subscription arrangements of
up to two years in duration.
Additionally, a significant percentage of Primark's operating costs are
denominated in foreign currencies. Primark maintains significant production,
product development, sales and administrative functions in the United Kingdom.
Also, Primark maintains local sales and customer service functions in most
financial centers of Europe and Asia. For the nine months ended September 30,
1999, approximately 51% of operating income exclusive of goodwill amortization
was denominated in non-U.S. Dollar currencies. This 51% can be broken down
between a negative margin of (2%) in U.K Sterling, 45% in Continental Europe and
8% in Asia. The primary market risk that Primark faces is the U.S. Dollar
strengthening versus the Euro, Swiss Franc, Swedish Krona and Japanese Yen.
The Company principally enters into contracts to deliver foreign currencies
for U.K. Sterling at agreed-upon exchange rates with maturities not exceeding
two years. The Company accounts for these instruments as cash flow hedges. In
accordance with FAS 133, the fair value of changes of derivative instruments
related to
8
<PAGE> 11
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the effective portion of cash flow hedges are initially recorded as a component
of other comprehensive income. Unrealized gains and losses on cash flow hedges
accumulate in other comprehensive income and are reclassified into earnings when
the forecasted transaction affects earnings. For the three and nine months ended
September 30, 1999, there was no ineffective portion of derivative gains or
losses reported in earnings and net gains from hedge transactions reclassified
from other comprehensive income to revenues totaled $209,000 and $355,000
respectively. At September 30, 1999, the fair value of outstanding instruments
was $298,000 recorded in other current assets with the offset to other
comprehensive income. The gain will be recognized in revenues over the next 12
months as the forecasted revenues are recognized.
Forward and option contracts are also entered into to protect anticipated
repatriations of excess cash flow, primarily from the U.K., under intercompany
loan agreements or other financial transactions. The Company marks to market
these instruments and such gains or losses are recorded each period in
non-operating income or loss. For the three and nine months ended September 30,
1999, the net gain on these contracts recorded to non-operating income was
$110,000 and $167,000, respectively.
The cumulative effect of a change in accounting principle due to adoption
of FAS 133 as of January 1, 1999 had a $219 thousand negative impact on
earnings.
5. 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On May 26, 1999 the Company established the 1999 Stock Option Plan for
Non-Employee Directors, which provides for the granting of 200,000 options to
purchase shares of Primark common stock. Options under this plan: (i) are
granted at prices equal to the fair market value of the stock on the date of
grant, (ii) vest immediately, and (iii) expire ten years from the date of grant.
As of September 30, 1999, 167,070 options have been granted under this plan.
6. CONTINGENCIES
There have been no other significant developments with respect to the
Company's contingent liabilities which were disclosed in the Company's 1998
Annual Report on Form 10-K. Management cannot predict the final disposition of
such issues, but believes that adequate provision has been made in the financial
statements and that the ultimate resolution of any outstanding issues will not
have a material adverse effect on the Company's financial condition.
7. DISCONTINUED OPERATIONS
The accompanying consolidated financial statements reflect the operating
results of TASC and TIMCO separately from the Company's continuing operations
for 1998. Interest expense has been allocated to discontinued operations based
upon the ratio of net assets to total consolidated net assets. The net assets of
discontinued operations represent the net book value of the Company's investment
in TASC and TIMCO and consist principally of working capital, fixed assets,
goodwill and other non-current assets and liabilities. A purchase price
adjustment of $8.9 million associated with the sale of TASC was received by
Primark in January of 1999.
9
<PAGE> 12
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
QUARTER ENDED YEAR TO DATE
DISCONTINUED OPERATIONS SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
----------------------- ------------------ ------------------
(AMOUNTS IN 000'S)
<S> <C> <C>
INCOME
TASC.................................................. $ -- $ 3,755
TIMCO................................................. 1,835 4,192
------ -------
Total............................................ $1,835 $ 7,947
====== =======
NET ASSETS
TASC.................................................. $11,500
TIMCO................................................. 1,698
-------
Total............................................ $13,198
=======
</TABLE>
8. EARNINGS PER SHARE
Due to the loss from continuing operations for the nine months ended
September 30, 1998, the Earnings Per Common Share -- Basic and Dilutive included
within the Company's Statements of Income exclude the dilutive effect of options
and other potential common shares. If options and other potential common shares
were included, weighted average common equivalent shares outstanding would have
been as follows:
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1998
------------------
(AMOUNTS IN)000'S
<S> <C>
Basic....................................................... 25,343
Effect of Dilutive.......................................... 1,042
------
Diluted..................................................... 26,385
======
</TABLE>
9. GENERAL
In the opinion of management, the accompanying balance sheets and related
interim statements of income, cash flows, common shareholders equity and
comprehensive income include all adjustments (consisting only of normal
recurring items) necessary for their fair presentation in conformity with
generally accepted accounting principles. Preparing financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses. Examples include
provision for bad debts and the length of asset lives. Actual results may differ
from these estimates. Interim results are not necessarily indicative of results
for a full year. The information included in this Form 10-Q should be read in
conjunction with Management's Discussion and Analysis and financial statements
and notes thereto included in the Primark Corporation 1998 Annual Report on Form
10-K.
10
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Primark Corporation reported income from continuing operations for the
third quarter and nine months ended September 30, 1999 at $4.8 million ($0.23
per share) and $11.7 million ($.55 per share) compared to income of $5.9 million
($0.26 per share) and a loss of $38.4 million ($1.52 per share) for the same
respective periods last year. A restructuring charge of $68.7 million was
recorded in the second quarter of 1998. Exclusive of that restructuring charge
and the related tax benefit, Primark in 1998 would have had income from
continuing operations for the nine months ended 1998 of $16.3 million ($0.62 per
share).
Net income for the three and nine months ended September 30, 1999 was $4.8
million ($.23 per share) and $11.4 million ($0.54 per share), compared to $21.9
million ($0.96 per share) and $151.8 ($5.99 per share) for the same respective
periods last year. Included in net income for the nine months ended September
30, 1999 is a loss, net of tax, of $219,000 ($0.01 per share) associated with
the cumulative effect of a change in accounting principle for the adoption of
Statement of Financial Accounting Standards No.133 ("FAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." Discontinued operations for the
three and nine months ended September 30, 1998 include $16.0 million ($0.70 per
share) and $195.4 million ($7.71 per share) for operations and gains on disposal
of TASC and TIMCO, the Company's former applied technology and aircraft
maintenance operations, respectively.
Acquisitions
During the first quarter of 1999, the Company acquired the businesses of
A-T Financial Information Inc. ("A-T") for $34.9 million and the Extel company
fundamental data business, along with the Extel brand name, for $31.9 million.
During the second quarter of 1999, Primark acquired from Wright Investors'
Service its 20% minority interest in Worldscope, giving Primark 100% ownership
in this business for $16.0 million; OnPoint Technologies Inc. was also acquired
for $3.3 million.
Founded in 1987, A-T is a leading provider of Windows-compatible real time
financial market data and software to money managers, traders, banks and other
institutional investors. A-T has launched a competitive Internet site for
individual investors, which is marketed as "A-T Attitude." The company reported
approximately $13 million in revenues for 1998.
Management is integrating A-T's leading real-time data and software
capabilities with the full range of Primark's financial information products. In
April 1999, A-T released a new North American market datafeed, called Primark
SpeedFeed which is collected directly from 35 sources. Management believes that
this new feed will enable Primark to offer superior quality Internet and
institutional products, especially when combined with the many unique databases
available from Primark today. For example, by combining A-T's robust North
American coverage with the European market data collected by Primark's ICV unit
in London, Primark will have excellent real-time and historical coverage for the
world's two largest financial markets. Building on Primark's extensive presence
in Asia and developing countries, management intends to expand this capability
to the rest of the globe. Management also intends to use the existing A-T
Internet delivery system as the foundation of a global investment service for
retail and institutional investors located in the United States, Europe, Asia
and other parts of the world.
The Primark brand of company information products are currently on the
Internet in many ways. The Disclosure Global Access product (www.disclosure.com)
is authorized to deliver company financial information through the Internet to
over 500,000 users. Broker research (www.trapeze.net), earnings estimates
(www.ibes.com), securities analysis (www.baseline.com), prices
(www.marketeye.co.uk), and economics (www.wefa.com) are other prime examples.
For the retail community, Primark proprietary data is delivered via AOL, MSN,
Stock Smart, FT.com, WSJ.com, Quote.com, E*Trade and many others.
In February of 1999, the Company Fundamental Data business and the Extel
brand name was acquired from The Financial Times Group, part of Pearson plc, for
$31.9 million in cash, subject to certain post closing adjustments. Extel,
perhaps best known for its "Extel Card" company tearsheets for rapid corporate
analysis, provides historical company accounts, image-based data, textual
corporate profiles and company news to the investment industry worldwide. The
acquired business had revenues of approximately $18 million in 1998.
11
<PAGE> 14
Management is integrating the Extel data production operation within its
Worldscope operation while leveraging the premier Extel name by providing Extel
branded information across the full range of Primark's product lines. This will
be done both by integrating Extel corporate and historical news content with
Primark's current products and through adding value to Extel products with
Primark's data and functionality. Extel's strength in the Europe and
Asia-Pacific region complements Primark's existing North American strength.
The purchase price for the remaining 20% stake of Worldscope was $16
million consisting of a $9 million cash payment and two $3.5 million convertible
subordinated notes. The notes pay interest at 5%, have a maturity date of June
1, 2014 and are convertible into Primark common shares at a price of $30 per
share. The notes are callable by Primark in the event of a change of control.
Worldscope produces a leading database covering global company financial
information on over 24,000 companies from 53 countries. A special feature of the
Worldscope database is the standardization of company account information to a
common format for meaningful cross-border comparisons and analysis. With 100%
ownership of Worldscope, Primark will integrate across all business units every
aspect of company account data collection, production and delivery. This
integration should allow Primark to provide its customers with more complete and
timely coverage, which will be achieved at lower costs to Primark.
Primark acquired OnPoint Technologies Inc., a firm specializing in
developing Internet-based financial applications and software products for the
financial services sector. OnPoint's web-focused development team will use
Primark's information resources and technical infrastructure to develop
financial products for the Internet.
The acquired businesses of A-T Financial Information Inc., and Extel and
OnPoint Technologies Inc. have been made part of the Primark Financial
Information Division (PFID) and their financial results are included with PFID.
Worldscope continues to be included within the Primark Financial Information
Division (PFID).
Operating Results
The following table summarizes the operating results of Primark by
Division:
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
------------------------------ -----------------------------
REVENUE 1999 1998 % CHANGE 1999 1998 % CHANGE
------- ------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
PFID............................. 86,460.. 75,744 14.1% 254,915 228,305 11.7%
PFAD............................. 23,342.. 19,311 20.9% 67,948 55,244 23.0%
PDID............................. 12,873.. 13,479 (4.5)% 39,326 38,270 2.8%
------- ------- ------- -------
122,675 108,534 13.0% 362,189 321,819 12.5%
======= ======= ======= =======
EBITDA
PFID............................. 20,992.. 15,195 38.2% 56,261 50,837 10.7%
PFAD............................. 6,120.. 5,149 18.9% 18,731 15,873 18.0%
PDID............................. 1,329.. 3,344 (60.3)% 4,318 8,335 (48.2)%
Corp............................. (797) (458) (74.0)% (2,666) (3,380) 21.1%
------- ------- ------- -------
27,644 23,230 19.0% 76,644 71,665 6.9%
======= ======= ======= =======
OPERATING INCOME
PFID............................. 10,251.. 6,801 50.7% 24,993 23,559 6.1%
PFAD............................. 4,135.. 3,532 17.1% 12,970 10,812 20.0%
PDID............................. 327.... 2,282 (85.7) 1,125 4,693 (76.0)%
Corp............................. (1,342) (524) (156.1)% (3,977) (4,149) 4.2%
------- ------- ------- -------
13,371 12,091 10.6% 35,111 34,915 0.6%
======= ======= ======= =======
</TABLE>
The above table does not include the restructuring charge of $68.7 million
taken in the second quarter of 1998. Of this amount, $50.7 million relates to
PFID, $17.8 million relates to PDID and $225,000 relates to PFAD.
12
<PAGE> 15
EBITDA represents operating income plus depreciation and amortization
expense and should not be considered in isolation from, or as a substitute for,
operating income, net income or cash flows from operating activities computed in
accordance with generally accepted accounting principles. While not a required
disclosure under generally accepted accounting principles, EBITDA is a widely
used measure of a company's performance in its industry. EBITDA assists in
comparing performance on a consistent basis without regard to depreciation and
amortization, which may vary significantly depending on accounting methods
(particularly where acquisitions are involved). Management of the company
believes that EBITDA is a meaningful measure given the widespread industry
acceptance as a basis for financial analysis. Further, certain of the company's
debt agreements include financial covenants that are based upon EBITDA, as
defined above. Due to the variety of methods that may be used by companies and
analysts to calculate EBITDA, the EBITDA measures presented herein may not be
comparable to that presented by other companies.
Revenues from continuing operations for the third quarter and nine months
ended September 30, 1999 were reported at $122.7 million and $362.2 million
compared to $108.5 million and $321.8 million for the same respective periods
last year. Operating and EBITDA margins in third quarter of 1999 improved
compared to the first and second quarter of 1999 due to revenues from both
existing products and new product introductions, together with expense savings
associated with completing integration efforts.
PFID
PFID's growth in sales can be primarily attributed the following factors;
excellent sales of Datastream's research product in Europe and a good reception
by the market of Disclosure's next generation electronic products line led by
Global Access and Piranha. Continued weakness in Disclosure's traditional CD Rom
and document delivery business partially offset this growth.
Excluding Disclosure's traditional products, management expects this
division's growth to continue due to synergy created by recent acquisitions and
due to the impact of new and enhanced products released in 1999.
PFAD
The Primark Financial Analytics Division (PFAD) had another strong quarter
of growth in revenues and EBITDA. The Baseline product leads this growth with an
increase in revenues of 27.0% and 33.3% for the quarter and year to date,
followed by IBES with growth of 15.2 and 17.1% for the quarter and year to date
and Vestek with growth of 27.7% and 21.7% for the quarter and year. Management
expects this strong performance to continue with the sale of new or recently
released products such as Trapeze, Active Express, and Vestek's mutual fund
warehouse product.
PDID
The Primark Decision Information Division (PDID) derives revenues from two
major sources. Under the brand name of the Yankee Group, this division sells
subscription and consulting services to both the vendors and users of
telecommunications and computing capabilities. Growth in revenues from these
services was up 28.2% and 26.3% for the quarter and year respectively.
Under the brand name of Primark WEFA, PDID sells subscriptions to economic
services as well as economic consulting for analysis and planning. Revenues
dropped by 28.8% and 14.9% for the quarter and year primarily as a result of
product transitions. WEFA's customer base and product line is transitioning from
services provided to traditional corporate economists, a market which is flat to
down, to marketing, financial and operating professionals, a market growing
robustly. This drop in revenues is the primary reason for the deterioration of
margins within this division. Management expects the revenues and margins at
WEFA to improve modestly for the balance of 1999 when compared to the first half
of last year.
Other comprehensive income increased by approximately $4.1 million during
the third quarter primarily due to a change in the cumulative translation
account resulting from the dollar weakening against the U.K. Sterling. However,
for the nine months ended September 30, 1999, other comprehensive income
decreased by approximately $3.9 million primarily due to a change in the
cumulative translation account resulting from the
13
<PAGE> 16
dollar strengthening against the U.K. Sterling. The Company has significant
assets denominated in U.K. Sterling.
Capital Resources and Liquidity
Primark's cash and cash equivalent balances decreased $36.7 million during
the nine months ended September 30, 1999 as a result of operating activities
contributing $44.1 million, financing activities generating $55.3 million and
investing activities absorbing $135.7 million.
The $8.2 million decrease in cash flows from operating activities includes
a $10.6 million decrease in working capital accounts which is a result of timing
differences.
Financing activities, for the most part, reflect a net increase of $94.3
million on Primark's revolving credit facility, resulting in $253.7 million of
funded debt outstanding as of September 30, 1999. Under the common stock
repurchase program, for the nine months ended September 30, 1999, 1,495,546
shares were purchased at a total cost of $36.8 million. Additionally, Primark
received proceeds of $5.4 million on the issuance of common stock associated
with stock option and employee stock purchase plans.
Investing activities included the use of $79.1 million for the purchase by
Primark of four companies in the first nine months, Extel, A-T Financial, the
remaining 20% of Worldscope and OnPoint Technologies Inc. In addition, investing
activities included $25.6 million of capital expenditures and $18.5 million of
capitalized software. The capital expenditures consisted primarily of computer
equipment purchases, which totaled $16.4 million. In early 1999, the Company
received $8.9 million in cash associated with a purchase price adjustment from
the sale of its TASC subsidiary in April of 1998. This amount was offset by $8.9
million of taxes paid in 1999 on the gains realized on the sale of discontinued
operations in 1998. Management estimates that it will be required to pay
approximately $8.0 million of additional taxes in the remainder of 1999
associated with the gain on the sale of discontinued operations realized in
1998.
Newly Adopted Accounting Standards
Effective January 1, 1999, the Company adopted Statement of Financial
Accounting Standards No. 133, (FAS 133), "Accounting for Derivative Instruments
and Hedging Activities". FAS 133 requires the Company to recognize all
derivatives on the balance sheet at fair value. Depending on the nature of the
underlying exposure being hedged, changes in the fair value of derivatives are
either recognized in the statement of operations or other comprehensive income.
The ineffective portion of a derivative's change in fair value is recognized in
the statement of operations. In accordance with the Company's risk management
policy, Primark uses foreign currency options and foreign currency forward
contracts. The Company does not hold or issue derivative instruments for trading
purposes.
The cumulative effect of a change in accounting principle due to adoption
of FAS 133 as of January 1, 1999 had a $219,000 negative impact on earnings.
Restructuring and Integration Charges
Effective June 1, 1998, the Company was reorganized in order to focus
solely on its information services businesses. In connection with this
reorganization, the Company recorded $68.7 million in operating expenses for
direct and other reorganization related costs in June 1998.
14
<PAGE> 17
The following summarizes the activity pertaining to the restructuring
accrual:
<TABLE>
<CAPTION>
UTILIZED
DURING
BALANCE NINE MONTHS SEPT. 30,
DECEMBER 31, ENDING 1999
1998 SEPT. 30, 1999 ACCRUAL
------------ ------------------ ---------
(AMOUNTS IN 000'S)
<S> <C> <C> <C>
Abandonment of leased facilities, including
leasehold improvements........................... $4,273 $3,835 $438
Salaries and termination benefits.................. 981 780 201
------ ------ ----
Total.............................................. $5,254 $4,615 $639
====== ====== ====
</TABLE>
During the nine months ended September 30, 1999 the Company decided not to
abandon certain leased space primarily as a result of acquisitions made since
the restructuring charge was recorded in June of 1998. Also the Company was able
to sub-lease or otherwise abandon certain leases for less than was originally
estimated. The remaining amount in abandoned leased facilities represents the
difference accrued between the cost of the leases and the sub-lease income to be
generated. As of September 30, 1999 there are two employees still to be severed
as part of the restructuring program.
Also during the nine months ended September 30, 1999 as a part of its
integration program, an additional $3.1 million was incurred and paid to
employees notified and terminated in 1999.
As of September 30, 1999 the restructuring program was substantially
complete and the remaining accrual totaled $639,000. This amount represents
$438,000 related to the abandonment of leased facilities expected to be paid out
over the remainder of the applicable lease, and $201,000 related to two staff
reductions to be completed in the fourth quarter.
Year 2000 Readiness Disclosure
The Year 2000 (Y2K) issue relates to a complex set of potential problems
arising from the ways in which computer software and hardware handle dates. Many
older systems use a two-digit date format that may create ambiguities once the
new century begins.
The Company has been actively addressing all known Y2K issues since 1995,
with the goal of providing continuous and reliable service to the Company's
customers and a seamless transition to the new Millennium. The Company's Y2K
plan focuses on each of the Company's internal systems, products and third
parties with which the Company has a significant business relationship. In
addition to the databases and software that the Company provides to its
customers, the Company is reviewing, fixing, and testing all aspects of its
internal operations. These include hardware systems (e.g., servers, LANs),
software (e.g., production database systems, HR and finance information
systems), and desktop PC programs, as well as physical security systems, fire
suppression, and other building control systems. These include key data
suppliers, hardware manufactures, telecommunications companies, electric
utilities, and many others.
The Company is also prepared to assist its users with Y2K issues relating
to their internal systems that directly interface with the Company's systems.
All Primark business units are working together to achieve compliance by sharing
information and resources. The Company believes that all material systems are
compliant as of the end of the third quarter of 1999. However, the Company is
continuing to execute its Y2K Program with testing and with regular review and
updating of contingency plans. Currently, the Company is finalizing the details
of its year-end plan, the Millennium weekend schedule and contingency plans for
early 2000.
All Primark businesses dealing with the Y2K issues have addressed the
effect these issues may have on their significant relationships, including
suppliers and customers. The Company has also undertaken steps to work with
third party vendors to understand their ability to continue to provide services
and products.
The Company has notified all customers with older products which are not
Y2K compliant and which the Company will no longer support. All other Company
products are Y2K compliant.
15
<PAGE> 18
The Company is undertaking a rigorous verification of suppliers. Primark
business units incorporate data derived from many different suppliers. A major
component of the Y2K project is reviewing every one of the suppliers to ensure
compliance. Where there is any doubt that a supplier will not be taking
reasonable actions to ensure compliance, the Company will seek alternatives
within a suitable time frame.
The Company has prepared and regularly updates contingency plans to deal
with major risks that could result from Y2K problems beyond the Company's
control. This includes the failure of infrastructure support, e.g., utilities,
as well as possible supplier and customer issues.
The Company anticipates to incur costs related to its Y2K initiative of
$5.0 million for the year ended December 31,1999. The Company has resolved all
known significant Y2K problems and is continuing to have the solutions
thoroughly tested both with customers and in internal operations, as business
circumstances require.
The Company expects its Y2K efforts will be successful. However, the
Company's products and services, as well as the tools that Primark uses to
conduct its Y2K evaluation, are dependent on technological components, equipment
and software developed by third parties that may not be Y2K compliant. The
Company has made extensive efforts to select third party products that meet its
product requirements and are Y2K-compliant. However, due to factors outside the
control of the Company, the failure of such third party components, equipment or
software to operate properly with regard to Y2K could interrupt ongoing
operations or require the Company to incur unanticipated expenses to remedy any
problems. Depending upon the severity, any such problems could have a material
adverse effect on the Company's business and operating results.
Certain Factors that May Affect Future Results
In addition to historical information presented here, this report includes
statements that may constitute forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Although Primark believes the expectations contained in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove correct. This information may involve risks and uncertainties that could
cause the actual results of Primark to differ materially from the
forward-looking statements. Factors which could cause or contribute to such
differences include, but are not limited to (i) the risks associated with
operating on a global basis, including fluctuations in the value of foreign
currencies relative to the U.S. dollar, and the ability to successfully hedge
such risks, (ii) the extent to which Primark seeks growth through acquisitions,
and the ability to identify and consummate acquisitions on satisfactory terms,
(iii) uncertainty regarding the development and market acceptance of new
products, (iv) loss of market share through competition, (v) deterioration in
economic conditions, particularly in the financial services industry, and (vi)
Primark's inability to complete the implementation of its Y2K plans on a timely
basis.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this item is provided under the caption
"Foreign Currency Exchange Risk Management" under Item 2 -- Management's
Discussion and Analysis of Financial Condition and Results of Operations. Also
see Item 7A. Quantitative and Qualitative Disclosures About Market Risk in
Primark's 1998 10-K.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27* Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ended September
30, 1999.
- ---------------
* Indicates document filed herewith.
16
<PAGE> 19
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 thereunto duly authorized.
PRIMARK CORPORATION
By: /s/ STEPHEN H. CURRAN
------------------------------------
Stephen H. Curran
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 12, 1999
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 14,912
<SECURITIES> 0
<RECEIVABLES> 101,552<F1>
<ALLOWANCES> 5,125
<INVENTORY> 0
<CURRENT-ASSETS> 150,437
<PP&E> 135,404
<DEPRECIATION> 72,225
<TOTAL-ASSETS> 910,243
<CURRENT-LIABILITIES> 319,770
<BONDS> 150,492
0
0
<COMMON> 401
<OTHER-SE> 415,924<F2>
<TOTAL-LIABILITY-AND-EQUITY> 910,243
<SALES> 0
<TOTAL-REVENUES> 362,189
<CGS> 0
<TOTAL-COSTS> 285,545
<OTHER-EXPENSES> (958)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,153
<INCOME-PRETAX> 21,920
<INCOME-TAX> 10,269
<INCOME-CONTINUING> 11,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (219)
<NET-INCOME> 11,432
<EPS-BASIC> 0.55
<EPS-DILUTED> 0.54
<FN>
<F1>Amount represents net accounts receivable.
<F2>Amount includes additional paid in capital, retained earnings and accumulated
other comprehensive income.
</FN>
</TABLE>
