8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): June 1, 2005

IDX SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in Charter)

Vermont	0-26816	03-0222230
(State or Other Jurisdiction of Incorporation	(Commission File Number)	(IRS Employer Identification No.)

40 IDX Drive, South Burlington, VT	05403
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 802-862-1022

(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 1.01. Entry into a Material Definitive Agreement

On June 1, 2005, IDX Systems Corporation (“IDX”) entered into a letter agreement with NHS Connecting for Health, Fujitsu Services Limited (“Fujitsu”) and British Telecommunications PLC (the “Letter Agreement”) providing for, among other things, the termination of the agreement in principle between IDX and Fujitsu dated December 15, 2003. In addition, under the terms of the Letter Agreement, has Fujitsu agreed to pay IDX the amount of two million, six hundred and ninety-six thousand, seven hundred and forty-seven pounds sterling (£2,696,747) and to reimburse IDX for certain costs. The Letter Agreement also provides for a mutual release of claims and covenants not to sue. The rights and obligations of the parties under the Letter Agreement are conditioned on the execution by NHS Connecting for Health and Fujitsu of a memorandum of understanding in relation to the development of an alternative solution in the Southern cluster by June 30, 2005.

The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. The Letter Agreement is filed as Exhibit 99.2 hereto and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

See Exhibit Index attached hereto.

SIGNATURES

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.

	IDX SYSTEMS CORPORATION
Date: June 1, 2005	By:	/s/ John A. Kane
		John A. Kane Senior Vice President, Finance and Administration, Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release entitled “IDX and Fujitsu to Terminate Agreement to Provide Solution for Southern Cluster of UK’s National Health Service Connecting for Health Program” dated June 1, 2005.
99.2	Letter Agreement between NHS Connecting for Health, Fujitsu Services Limited, British Telecommunications PLC and IDX Systems Corporation dated June 1, 2005.

EX-99.1

Exhibit 99.1

IDX and Fujitsu to Terminate Agreement to Provide Solution for

Southern Cluster of UK’s National Health Service Connecting for

Health Program

Company Reaffirms 2005 Guidance and Revises Guidance for 2006

BURLINGTON, VT – June 1, 2005 – IDX Systems Corporation (NASDAQ:IDXC) today announced that it has agreed with Fujitsu Services Limited to terminate their agreement under which IDX and British Telecom (BT) agreed to provide a “common solution” approach to a clinical information system for the Southern Cluster of the United Kingdom National Health Service (NHS) Connecting for Health program. Fujitsu had previously agreed to share a common software solution that IDX was developing with BT, the prime contractor for the London Cluster, to be implemented across the Southern and London Clusters. IDX and Fujitsu’s agreement is conditioned upon Fujitsu and the NHS executing a memorandum of understanding in relation to the development of an alternative solution in the Southern Cluster. IDX will continue to provide the core clinical records software for the London Cluster.

James H. Crook, Jr., IDX’s Chief Executive Officer, said, “Fujitsu Services’ decision to withdraw from the “common solution” and to align itself with another provider for the Southern Cluster is disappointing. We believe that, together with our prime contractor BT, we have overcome numerous obstacles in delivering on the national program, which is unprecedented in scale, complexity and schedule, and will ultimately deliver real benefits to patients, care givers and NHS staff. In spite of these challenges, we believe that IDX Carecast^™, one of the first products developed to the rigorous national standards, will be a successful solution for the London Cluster. With the full support of BT and the Authority, we eagerly anticipate the first installation of the Carecast system in the coming weeks and the rollout of Carecast in London this year. We expect to see a rapid acceleration of deployments to trusts in the next 12 months.”

Tim Smart, President Business Operations for BT in the UK said, “We and IDX have important work to do together. Our joint undiminished focus is on the deployment, across London, of world-class systems for our customer. We are addressing that task with confidence and enthusiasm.”

Revised Guidance

While costs in the current quarter are running a little ahead of our previous expectations, primarily because of increased consulting costs in the UK, we are reiterating 2005 guidance of $610 million to $630 million in revenue and earnings per share of $1.25 - $1.31. The Company also expects to take a charge of between $2 million and $4 million in the second quarter of 2005 related to the anticipated exiting costs associated with the project. With respect to 2006, IDX now expects that 2006 revenues will be $670 million to $690 million, down from the Company’s previous forecast of $700 million to $720 million, and that EPS is expected to be $1.50 to $1.60 per share, down from its previous estimate of $1.65 to $1.75 per share.

Commenting on the revised guidance, Crook said, “Even with these lowered projections, IDX’s revenue and earnings growth remains strong. Our domestic U.S. business continues to accelerate, and we have a number of opportunities in the international market which we are aggressively pursuing.”

Conference Call

A conference call with investors will be held on June 1, 2005 at 9 am EDT to discuss this announcement. The conference call dial-in is 877-518-6109 with the passcode 42629. The webcast is available at http://www.idx.com, Investor Relations, Multimedia.

About IDX

Founded in 1969, IDX Systems Corporation provides information technology solutions to maximize value in the delivery of healthcare, improve the quality of patient service, enhance medical outcomes, and reduce the costs of care. Our systems are deployed to serve approximately 150,000 physicians and are installed at over 3,400 customer sites, including more than 850 group practices and approximately 370 integrated delivery networks servicing more than 500 hospitals.

The IDX web strategy includes browser technology, e-commerce and web-based tools – built using Internet architecture – that facilitates access for patients, physicians and care providers to vital health information and data managed by the IDX clinical, administrative, financial, and managed care products. IDX has approximately 2,400 full-time employees.

IDX is a registered trademarks or trademarks of IDX Investment Corporation.

This press release contains forward-looking statements about IDX Systems Corporation that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are uncertainties or difficulties in developing new services, including Carecast, possible failure of IDX to realize the benefits of developing clinical guidelines, difficulties in implementing systems, possible deferral, delay, termination or cancellation by customers of computer system or service purchase decisions, possible delay, cancellation or termination of system installations and service implementations, development by competitors of new or superior technologies, changing economic, political and regulatory influences on the healthcare and e-Commerce industries, possible disruptions in the world economy caused by terrorist activities and foreign conflicts, changes in product pricing policies, governmental regulation of IDX’s software and operations, the possibility of product-related liabilities, failure to secure opportunities and factors detailed from time to time in IDX’s periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. IDX undertakes no obligation to update forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time.

For additional information, contact:

Investors:	Media:
Margo C. Happer	Drew Brown/ Jim Barron
IDX Systems Corporation	Citigate Sard Verbinnen
(802) 859-6169	(212) 687-8080

EX-99.2

Exhibit 99.2

NHS

Connecting for Health

From the office of the Chief Operating Officer

for NHS Connecting for Health

Gordon Hextall CB	2nd Floor
	Princes Exchange
	Princes Square
	Leeds
	LS1 4HY
	Tel: 0113 280 6448
	Fax: 0113 280 6120
	Our Reference: 060105 BT/Fujitsu/IDX
	1 June 2005

Tim Smart

President

BT Consulting & Systems Integration

Guidion House

Harvest Crescent

Ancells Business Park

Fleet

Hampshire

GU51 2QP

Peter Hutchinson

Fujitsu Services Limited

Observatory House

Windsor Road

Slough

Berkshire

SL1 2EY

Rob Baker

IDX Systems Corporation

Level 5

250 Euston Road

Euston

London

NW1 2PQ

Dear Sirs,

National Programme for IT in the NHS

This letter is to record the following agreements which are made in consideration of the mutual releases given below:

1. Unless otherwise defined herein, all defined terms used in this letter shall have the meanings ascribed to such terms as set out in the agreement in principle made between

NHS Connecting for Health is delivering the National Programme for Information Technology

Fujitsu Services Limited (“Fujitsu”) and IDX Systems Corporation (“IDX”) on 15 December 2003 as subsequently amended (the “Fujitsu/IDX Agreement in Principle”). As used in this letter: Fujitsu shall include its parents, subsidiaries, successors, assigns, affiliates, officers, directors, employees, agents and shareholders; “BT” shall include British Telecommunications PLC and its parents, subsidiaries, successors, assigns, affiliates, officers, directors, employees, agents and shareholders; and “IDX” shall include its parents, subsidiaries, successors, assigns, affiliates, officers, directors, employees, agents and shareholders.

2. Fujitsu and IDX agree that:

(a) the Fujitsu/IDX Agreement in Principle is hereby terminated with immediate effect;

(b) except as provided in this paragraph 2(b), neither Fujitsu nor IDX shall have any liability to the other in connection with the termination of the Fujitsu/IDX Agreement in Principle, and each of Fujitsu and IDX irrevocably waives any right which it may have to bring any action, claim or proceeding against the other in respect of any matter arising under or connected with the Fujitsu/IDX Agreement in Principle. Further, each releases the other from all liabilities under or related to the Fujitsu/IDX Agreement in Principle and undertakes not to, and to procure that none of its affiliated companies shall, bring any action against any person in connection with the Fujitsu/IDX Agreement in Principle or its termination. Notwithstanding the foregoing, in consideration of IDX’s agreeing to the termination of the Fujitsu/IDX Agreement in Principle, Fujitsu agrees to pay to IDX within seven (7) days of the full execution of the Memorandum of Understanding referred to in paragraph 10 below, the amount of two million, six hundred and ninety-six thousand, seven hundred and forty-seven pounds sterling (£2,696,747) (plus VAT if any is payable, on receipt of a VAT invoice).

(c) those parties’ obligations as set out in clause 38 (except for clauses 38.4, 38.5.4, 38.14 and 38.15) and clauses 34.1, 34.2, 34.3 and 34.4 of the Fujitsu/IDX Agreement in Principle shall survive the termination of the Fujitsu/IDX Agreement in Principle, and within twenty-one (21) days of the date of execution of the Memorandum of Understanding referred to in paragraph 10 below, each of those parties shall promptly return or destroy, any and all Confidential Information of the other party, in any form, which are in its possession, except to the extent that such information is strictly necessary for either party to retain for legal or regulatory compliance purposes, and each party shall on written request provide certification of compliance with this clause;

(d) each of those parties shall use all reasonable endeavours (but in any event no less than the endeavours it would use to recover its own Confidential Information) to ensure that all documents, materials and any other information, in any form, that contain Confidential Information of the other party and that it has disclosed to third parties (other than BT and the Authority) are returned to the other party, or destroyed, and each party shall on written request provide certification of its compliance with this clause. This obligation will include, but not be limited to,

NHS Connecting for Health is delivering the National Programme for Information Technology

each of those parties providing the other, promptly after the date of the execution of the Memorandum of Understanding referred to in paragraph 10 below, a written list of any and all such third parties to whom it has disclosed documents, materials and other information, in any form, which contain the other’s Confidential Information; and

(e) IDX grants to Fujitsu a non-exclusive royalty-free licence to use and modify as Fujitsu sees fit, for the purpose of performing its obligations under the project agreement made between the Authority and Fujitsu on 26 January 2004, any documents that IDX and Fujitsu have created jointly, as part of their activities up to the date hereof in developing the solution in relation to the Southern cluster, to the extent that such documents do not contain IDX Confidential Information.

3. The Authority consents to the termination of the Fujitsu/IDX Agreement in Principle in accordance with paragraph 2.

4. The Authority shall not be liable to Fujitsu, BT or IDX in connection with the termination of the Fujitsu/IDX Agreement in Principle and each of Fujitsu, BT and IDX irrevocably waives any right which it may have to bring any action, claim or proceeding against the Authority in respect of any matter arising under or connected with the Fujitsu/IDX Agreement in Principle. Likewise, the Authority agrees that none of IDX, BT and Fujitsu shall be liable to the Authority in connection with the termination of the Fujitsu/IDX Agreement in Principle and the Authority irrevocably waives any right which it may have to bring any action, claim or proceeding against IDX, BT or Fujitsu in respect of any matter arising under or connected with the Fujitsu/IDX Agreement in Principle.

5. IDX understands and acknowledges that the sub-contract agreement made between Fujitsu and British Telecommunications PLC (“BT”) on 19 January 2004 (the “Fujitsu/BT Sub-Contract”) shall be terminated with effect from the Authority and Fujitsu entering into the Memorandum of Understanding referred to in paragraph 10 below on the condition that such termination takes effect by 30 June 2005, and that the Authority has consented to the termination of the Fujitsu/BT Sub-Contract. IDX agrees that the Authority shall not be liable to IDX in connection with the termination of the Fujitsu/BT Sub-Contract, and IDX irrevocably waives any right which it may have to bring any action, claim or proceeding against the Authority in respect of any matter arising under or connected with the Fujitsu/BT Sub-Contract. Likewise, the Authority agrees that IDX shall not be liable to the Authority in connection with the termination of the Fujitsu/BT Sub-Contract and the Authority irrevocably waives any right which it may have to bring any action, claim or proceeding against IDX in respect of any matter arising under or connected with the Fujitsu/BT Sub-Contract.

6. BT and Fujitsu agree with IDX that BT and Fujitsu shall have no liability to IDX and IDX has no liability to BT and Fujitsu in connection with the termination of the Fujitsu/BT Sub-Contract. BT and Fujitsu irrevocably waive any right which they may have to bring any action, claim or proceeding against IDX in respect of any matter arising under or connected with the Fujitsu/BT Sub-Contract and IDX irrevocably waives any right which it may have to bring any action, claim or proceeding against Fujitsu or BT in respect of any matter arising under or connected with the Fujitsu/BT Sub-Contract.

NHS Connecting for Health is delivering the National Programme for Information Technology

7. IDX understands that Fujitsu and BT have each granted to the other a non-exclusive royalty-free licence to use and modify as they see fit, for the purpose of performing their obligations under the project agreement made between the Authority and Fujitsu on 26 January 2004 and the project agreement made between the Authority and BT on 8 December 2003 respectively, any documents that they have created, whether separately or jointly, as part of their activities up to the date hereof in developing the common solution in relation to the Southern and London clusters. Notwithstanding the foregoing, BT and Fujitsu agree and warrant that such licence does not include any such documents, materials or information to the extent such documents, materials or information include any Confidential Information of IDX.

8. Unless otherwise required by applicable law or any regulatory or governmental authority (and then subject to the following sentence), no party shall make or permit or procure to be made any public announcement or disclosure (whether for publication in the press, the radio, television or any other medium) of any matter concerning this letter, without the prior written consent of each of the other parties. Notwithstanding the foregoing, the parties shall be allowed to disclose any matter concerning this letter to their professional advisors (lawyers, accountants and bankers) on a need to know basis. Where there is no professional obligation incumbent upon such professional advisers to maintain all such information confidential, the disclosing party shall obtain a nondisclosure agreement with such professional adviser(s), prior to any such disclosure, which will require such professional adviser(s) to maintain the confidentiality of all such disclosed information. If a party is required to make a public announcement or disclosure by any applicable law or any regulatory or governmental authority, it shall give the other parties as much prior written notice of the proposed announcement or disclosure as is reasonably practicable.

9. The Authority shall be free to disclose the terms of this letter within the Department of Health and to other Government departments, agencies and non-departmental public bodies.

10. Subject to paragraph 11, the operative provisions, rights and obligations of the parties under this letter are conditional on the execution by the Authority and Fujitsu of a memorandum of understanding in relation to the development of an alternative solution in the Southern cluster. If the condition in the preceding sentence is not satisfied by 30 June 2005, then this letter shall terminate automatically and no party shall have any rights or obligations under this letter. The Authority shall notify each of BT and IDX upon execution of the memorandum of understanding with Fujitsu, and shall provide Fujitsu with a copy of the notice.

11. The obligations of the parties to the Fujitsu/IDX Agreement in Principle are suspended from the date of this letter and for the term of this letter.

NHS Connecting for Health is delivering the National Programme for Information Technology

12. The parties agree that this letter is legally binding and is governed by English law. The parties agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute, controversy or claim arising out of or in connection with this letter.

13. The parties’ execution of this letter does not constitute any admission of liability, fault or breach on the part of any party. Further, IDX’s and Fujitsu’s agreeing to terminate the Fujitsu/IDX Agreement in Principle does not constitute any admission of liability on the part of either IDX or Fujitsu or that either IDX or Fujitsu was at fault or breached any of their obligations under the Fujitsu/IDX Agreement in Principle.

14. Fujitsu and IDX agree that:

(a) neither party believes that the Transfer Regulations or the Acquired Rights Directive applies to the termination of the Fujitsu/IDX Agreement in Principle and IDX will conduct consultation and redundancy on that basis as a result of this;

(b) in the event that any employee affected by the termination of the Fujitsu/IDX Agreement in Principle should claim that the Transfer Regulations or the Acquired Rights Directive is applicable and an award is made against IDX in respect of failure to consult as provided under the Transfer Regulations (a “Protective Award”), Fujitsu will pay two-thirds of any amount awarded against IDX in respect of the Protective Award; and

(c) as a result of the termination of the Fujitsu/IDX Agreement in Principle, it is recognised that IDX may have to terminate the employment of certain employees by reason of redundancy. In recognition of this, Fujitsu will pay two-thirds of any Redundancy Costs. For the purposes of this letter, “Redundancy Costs” are defined as those costs associated with the termination of employment (not to exceed forty (40) employees) by reason of redundancy, comprising:

(i) any payments due under the contract of employment;

(ii) any statutory redundancy payments due; and

(iii) payments due for an additional consultation period (as required by section 188 of TULRCA 1992) but subject to a maximum of thirty (30) days.

15. This letter may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement.

Please indicate your agreement to the terms set out in this letter by signing where indicated below.

Yours faithfully

/s/ Gordon Hextall

Gordon Hextall

For and on behalf of NHS Connecting for Health (the “Authority”)

NHS Connecting for Health is delivering the National Programme for Information Technology

ACCEPTED AND AGREED:

/s/ Peter Hutchinson

For and on behalf of Fujitsu Services Limited (“Fujitsu”)

Date: 1 June 2005

ACCEPTED AND AGREED:

/s/ Tim Smart

For and on behalf of British Telecommunications PLC (“BT”)

Date: 1 June 2005

ACCEPTED AND AGREED:

/s/ Robert W. Baker, Jr., Senior Vice President

For and on behalf of IDX Systems Corporation (“IDX”)

Date: 01 June 05