8-K

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): July 24, 2002

Commission File No. 001-12392

NDCHealth Corporation

(Exact name of registrant as specified in its charter)

DELAWARE	58-0977458
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification Number)

NDC Plaza, Atlanta, Georgia	30329-2010
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (404) 728-2000

None

(Former name or former address, if changed since last report.)

Item 7.    Financial Statements and Exhibits

Exhibit 99.1

(a) Press Release dated July 24, 2002

(b) Schedules:

1) NDCHealth Corporation Consolidated Statements of Income (GAAP) for the three months ended May 31, 2002 and May 31, 2001,

2) NDCHealth Corporation Consolidated Statements of Income (GAAP) for the fiscal years ended May 31, 2002 and May 31, 2001,

3) NDCHealth Corporation Consolidated Statements of Income for the three months ended May 31, 2002 (GAAP) and May 31, 2001 (normalized),

4) NDCHealth Corporation Consolidated Statements of Income (normalized) for the fiscal years ended May 31, 2002 and May 31, 2001,

5) NDCHealth Corporation Consolidated Balance Sheets as of May 31, 2002 and May 31, 2001,

6) NDCHealth Corporation Consolidated Statements of Cash Flows for the fiscal years ended May 31, 2002 and May 31, 2001,

7) NDCHealth Corporation Consolidated Statements of Income (GAAP) for fiscal 2001 and 2002 (by quarter), and

8) NDCHealth Corporation Consolidated Statements of Income (normalized) for fiscal 2001 and 2002 (by quarter).

We previously accounted for our investment in TechRx under the cost method. Due to our additional investment in TechRx in the fourth quarter of fiscal 2002, Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock,” requires TechRx to be treated as if we had accounted for TechRx as an equity investment since the inception of the initial investment. Without the completion of the TechRx transaction, diluted earnings per share would have been $1.35 for fiscal year 2002 and $0.37 in the fourth quarter of fiscal 2002. Accordingly, our financial statements provided in Exhibits 99.1 (b) 1 through 8 have been retroactively adjusted as if we had used the equity method rather than the cost method during previous periods.

The adjustments from our previously reported results required by APB 18 are a reduction in revenue and an addition to equity in losses of affiliated companies as follows:

1) Quarter ended August 31, 2000: Revenue $0.9 million; and equity in losses $0.1 million.

2) Quarter ended November 30, 2000: Revenue $1.4 million; and equity in losses $0.1 million.

3) Quarter ended February 28, 2001: Revenue $1.4 million; and equity in losses $0.2 million.

4) Quarter ended May 31, 2001: Revenue $1.4 million; and equity in losses $0.3 million.

5) Quarter ended August 31, 2001: Revenue $1.5 million; and equity in losses $1.1 million.

1

6) Quarter ended November 30, 2001: Revenue $1.5 million; and equity in losses $0.3 million.

7) Quarter ended March 1, 2002: Revenue $1.5 million.

During the fourth quarter of fiscal 2002, we adopted the provisions of Emerging Issues Task Force Issue No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer or Reseller of the Vendor’s Products”, which was issued during our third fiscal quarter. Our adoption of EITF 01-09 resulted in a reclassification of revenues related to sales to physician systems vendors, requiring certain vendor allowances to be treated as deductions from revenue.

Accordingly, our financial statements provided in Exhibits 99.1 (b) 1, 2, 3, 4, 7, and 8 have been retroactively adjusted to reflect our adoption of EITF 01-09. The effect of adoption was to reduce revenues, with a corresponding reduction of expenses. Due to the offsetting nature of the reclassifications, there was no impact on net income or earnings per share in fiscal 2001 or 2002.

The adjustments from our previously reported results required by EITF 01-09 are a reduction in revenue and operating expense as follows:

1) Quarter ended August 31, 2000: $1.5 million

2) Quarter ended November 30, 2000: $1.8 million

3) Quarter ended February 28, 2001: $2.2 million.

4) Quarter ended May 31, 2001: $2.2 million

5) Quarter ended August 31, 2001: $2.7 million.

6) Quarter ended November 30, 2001: $5.1 million.

7) Quarter ended March 1, 2002: $6.3 million.

As an indication of the historical performance of the continuing NDCHealth Corporation business, in Exhibit 99.1 (b) 3, 4, and 8 to this report, we have provided certain financial information regarding NDCHealth, the stand-alone healthcare information business that remains after the spin-off of Global Payments Inc. The financial information presented in these exhibits has been “normalized” by adjusting for the following:

a) Discontinued operations, net of tax, for all periods,

b) Restructuring and impairment charges in the amount of $2.2 million previously recorded in the second quarter of fiscal 2001,

c) Other expense related to the non-cash loss recorded to mark to market the Medscape, Inc. investment in the amount of $7.0 million previously recorded in the fourth quarter of fiscal 2001, and

d) Revenue and operating expenses related to divested businesses, as follows:

1) Quarter ended August 31, 2000: Revenue $10.3 million; and Operating expenses $9.9 million.

2) Quarter ended November 30, 2000: Revenue $5.0 million; and Operating expenses $5.0 million.

2

3) Quarter ended February 28, 2001: Revenue $4.7 million; and Operating expenses $4.5 million.

4) Quarter ended May 31, 2001: Revenue $4.3 million; and Operating expenses $4.5 million.

5) Quarter ended August 31, 2001: Revenue $4.0 million; and Operating expenses $4.0 million.

6) Quarter ended November 30, 2001: Revenue $0.3 million; and Operating expenses $0.6 million.

7) Quarter ended March 1, 2002: Revenue $0.1 million; and Operating expenses $0.3 million.

8) Quarter ended May 31, 2002: No adjustments were made.

Item 9.    Regulation FD Disclosure

On July 24, 2002, NDCHealth Corporation issued a press release which is filed herewith as Exhibit 99.1 (a) and (b) 1, 2, 3, 4, 5 and 6 and incorporated in this Item 9 by this reference.

In July 2001, the Financial Accounting Standards Board issued SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS 142 deals with, among other things, the elimination of amortization of goodwill. We implemented this new standard in the first quarter of fiscal 2002. The impact of the implementation of SFAS 142 in fiscal 2002 was an addition of $0.20 to diluted earnings per share. Additionally, we reduced the fiscal 2002 effective tax rate to 36.0% due to our application of this new standard.

We believe that NDCHealth is well positioned to provide processing and information products and services to the healthcare industry in the future. For the 2003 fiscal year, after the impact of the adoption of EITF 01-09, we estimate that annual revenue will be approximately $445 to $455 million and diluted earnings per share in the range of $1.55 to $1.57. For the first quarter of 2003, we expect revenue to be in the range of $99 to $102 million, with diluted earnings per share in the range of $0.31 to $0.33.

We expect that both of our business segments will continue to benefit from improved operating efficiencies. For fiscal 2003, we expect that revenue for the Information Management segment will be in the range of $160 to $165 million. For Network Systems and Services, we expect that revenue will be in the range of $285 to $290 million.

As previously reported, NDCHealth’s investment in MedUnite is accounted for under the cost method. MedUnite is an early stage venture among a number of leading health service payors and NDCHealth. The valuation of MedUnite is dependent upon execution of its business strategy, and transactions pursued in the execution of its strategy could materially affect MedUnite’s valuation, which in turn would impact the value of our investment in MedUnite or our continued use of the cost method.

As a result of the adjustments and the other principles and assumptions discussed above, which are the basis of our presentation of the financial schedules filed in Exhibit 99.1 (b) 3, 4, and 8, please note that these financial schedules do not reflect our historical financial statements. The Company believes that normalized results of operations are additional meaningful measures of operating performance. However, this pro forma information will necessarily be different from comparable information

3

provided by other companies and should not be used as an alternative to NDCHealth’s operating and other financial information, as determined under accounting principles generally accepted in the United States of America.

When used in this report and the exhibits hereto, the words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions and statements that are necessarily dependent on future events are intended to identify forward-looking statements concerning the Company’s business operations, economic performance and financial condition. These include, but are not limited to, statements regarding the Company’s business strategy and means to implement the strategy, the Company’s objectives, future capital expenditures, and sources of future financing. For such statements, the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 is applicable and invoked. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies that are subject to change. Actual revenues, revenue growth and margins will be dependent upon all such factors and results subject to risks related to the performance of our various investments and alliances, the implementation of changes by the Company, the failure to implement changes, customer acceptance of such changes or lack of change. Actual results of events could differ materially from those anticipated in the Company’s forward-looking statements as a result of a variety of factors, including: (a) those set forth in the Company’s Annual Report on Form 10-K for the period ended May 31, 2001 which are incorporated herein by this reference; (b) those set forth elsewhere herein; (c) those set forth from time to time in the Company’s press releases and reports and other filings made with the Securities and Exchange Commission; and (d) those set forth from time to time in the Company’s analyst calls and discussions. In addition, the Company is currently unable to assess the impact, if any, on its financial performance that may result from the economic effects of the September 11, 2001 or any future terrorist attacks on the United States. The Company cautions that such factors are not exclusive. Consequently, all of the forward-looking statements made herein are qualified by these cautionary statements and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update forward-looking or other statements or to publicly release the results of any revisions of such forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.

4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NDCHEALTH CORPORATION (Registrant)
By:	/s/    DAVID H. SHENK
	David H. Shenk Vice President & Corporate Controller (Chief Accounting Officer)

Date: July 24, 2002

5

EX-99.1(A)

Exhibit 99.1 (a)

NDCHealth ANNOUNCES RESULTS FOR FOURTH QUARTER

AND FISCAL YEAR 2002

ATLANTA, July 24, 2002 —- NDCHealth Corporation (NYSE: NDC) announced today financial results for its fourth quarter and fiscal year ended May 31, 2002.

Annual Results

For the 2002 fiscal year, NDCHealth reported net income of $43.4 million and diluted earnings per share of $1.22 after application of Accounting Principles Board No. 18, “The Equity Method of Accounting for Investments in Common Stock,” due to the completion of the acquisition of control of Tech Rx Incorporated. These results compare to the prior year’s net income of $32.5 million and diluted earnings per share of $0.95 after application of APB 18 and are consistent with the post-acquisition First Call consensus estimate of $1.22.

For fiscal 2002, revenue increased to $353.4 million, compared to revenue for fiscal 2001 of $337.1 million, including the impact of the adoption of Emerging Issues Task Force Issue No. 01-09 (EITF 01-09) in both years.

The Company also reported results on a normalized basis to provide an additional basis for comparisons. The normalized results for fiscal 2001 exclude results from discontinued operations associated with the spin out of Global Payments, the valuation adjustment in the Medscape investment and restructuring and impairment charges and, for fiscal 2001 and 2002, exclude revenues and operating expenses related to divested businesses. On a normalized basis, for fiscal 2002, revenue was $349.0 million, resulting in net income of $43.8 million and diluted earnings per share of $1.23. The results compare to the prior year’s normalized revenue of $312.6 million, net income of $29.6 million and diluted earnings per share of $0.87.

Fourth Quarter Results

For the fourth quarter, revenue increased to $94.5 million resulting in net income of $12.4 million and diluted earnings per share of $0.35. These results compare to the prior year’s fourth quarter revenue of $88.4 million, net income of $4.1 million and diluted earnings per share of $0.11 and compare to the post-acquisition First Call estimate of $0.34. These results compare to the prior year’s normalized revenue of $84.1 million, net income of $8.4 million and diluted earnings per share of $0.24.

Comments on 2002 Results

In commenting on the results, chief executive officer Walter Hoff said, “We have completed a successful year at NDCHealth, showing healthy growth in revenue, operating income, net income and diluted earnings per share, as well as continuing to generate significant cash flow. We continue to execute well against our strong recurring revenue model. Our Information Management and Network Services and Systems businesses each showed double digit growth for the year. On a normalized basis, revenue increased 11.6% year over year and operating margin grew to 22.3% from 17.7% in 2001. During the year, on a normalized basis, net income margin increased to 12.5% from 9.5% in 2001. We closed two acquisitions in the fourth quarter that further strengthen our pharmacy business and position us for continued growth in future years.”

Business Segments

For the Information Management segment, fiscal 2002 revenue grew to $150.4 million from $136.6 million, and segment Income Before Income Tax grew to $25.3 million from $18.2 million. The pre-tax margin for the segment grew to 16.8% from 13.3% in 2001. Recurring revenue for the Information Management segment was approximately 75% of total segment revenue.

For the Network Services and Systems segment, fiscal 2002 revenue grew to $198.6 million from $176.0 million, and segment Income Before Income Tax grew to $46.3 million from $31.1 million. The pre-tax margin for the segment grew to 23.3% from 17.7% in 2001. Recurring revenue for the Network Services and Systems segment was approximately 85% of total segment revenue.

Divested Businesses

To provide additional information about results from ongoing operations, NDCHealth has presented results for divested businesses. Revenue from divested businesses was $4.4 million in 2002 and $24.4 million in 2001.

Accounting Pronouncements

During the fourth quarter of fiscal 2002, the Company adopted the provisions of EITF 01-09, “Accounting for Consideration Given by a Vendor to a Customer or Reseller of the Vendor’s Products”, which was issued during the Company’s third fiscal quarter. NDCHealth’s adoption of EITF 01-09 resulted in a reclassification of revenues related to

sales to physician systems vendors, requiring certain vendor allowances to be treated as deductions from revenue.

The effect of adopting EITF 01-09 was to reduce revenues, with a corresponding reduction of expenses, by $3.8 million for the fourth quarter of fiscal 2002. As required by EITF 01-09, the Company has retroactively adjusted its results for fiscal years 2002 and 2001. Accordingly, fiscal 2002 revenues and expense were adjusted to reflect the reductions of $18.0 million in each, and each of fiscal 2001 revenue and expense were adjusted by $7.7 million. Due to the offsetting nature of the reclassifications, there was no impact on net income or earnings per share in fiscal 2001 or 2002.

At the beginning of the 2002 fiscal year, NDCHealth adopted SFAS 142 requiring elimination of certain goodwill amortization. The impact of this accounting change was to increase earnings per share by $0.20 for fiscal 2002.

Impact of the TechRx Transaction

As previously reported, on May 29, 2002, NDCHealth acquired a controlling interest in TechRx Incorporated, a provider of practice management systems to pharmacy. As required by Accounting Principles Board Opinion No. 18 (APB 18), due to the increase in the Company’s equity position in TechRx, its financial results have been retroactively adjusted to account for TechRx as if NDCHealth had used the equity method commencing with its initial investment rather than the cost method.

Outlook

Mr. Hoff said, “We expect 2003 to be a rewarding year for NDCHealth in a challenging environment. We have a proven ability to manage in difficult environments. More importantly, in 2003 and into the future, NDCHealth is well positioned to improve the healthcare industry by providing increased automation, real time processing and new, innovative information solutions. As we contribute to the evolution of the healthcare industry, we will be accelerating our growth as well as generating increased rewards for our stockholders, customers, and employees.

“For the 2003 fiscal year, after the impact of the adoption of EITF 01-09, we estimate that annual revenue will be approximately $445 to $455 million and diluted earnings per share in the range of $1.55 to $1.57. For the first quarter of 2003, we expect

revenue to be in the range of $99 to $102 million, with diluted earnings per share in the range of $0.31 to $0.33.

“We expect that both of our business segments will continue to benefit from improved operating efficiencies. For fiscal 2003, we expect that revenue for the Information Management segment will be in the range of $160 to $165 million. For Network Systems and Services, we expect that revenue will be in the range of $285 to $290 million.

“Our markets have significant untapped potential providing us the opportunity to grow our business and generate significant cash flow.”

NDCHealth is a leading provider of health information services that add value to pharmacy, hospital, physician, pharmaceutical and payer businesses.

This press release contains forward-looking statements concerning the Company’s future operations, performance and financial condition. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These include product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, development difficulties, the ability to consummate and integrate acquisitions, and other risks detailed in the Company’s SEC filings, including its most recent Form 10-K. Comments that reconcile the presentation of the normalized results included herein to GAAP results are filed with the SEC in the Company’s most recent Form 8-K. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

The Company believes that normalized results of operations are additional meaningful measures of operating performance. However, this pro forma information will necessarily be different from comparable information provided by other companies and should not be used as an alternative to NDCHealth’s operating and other financial information, as determined under accounting principles generally accepted in the United States of America.

EX-99.1(B)1

Exhibit 99.1 (b) 1

GAAP

CONSOLIDATED STATEMENTS OF INCOME

NDCHealth Corporation and Subsidiaries

(In thousands, except per share data)

	Three Months Ended
	May 31, 2002			May 31, 2001
Revenues:
Information management	$	40,173		$	37,190
Network services and systems		54,331			46,927
Divested businesses		—			4,322
		94,504			88,439
Operating expenses:
Cost of service		47,588			43,464
Sales, general and administrative		19,369			20,468
Depreciation and amortization		5,948			9,163
		72,905			73,095
Operating income		21,599			15,344
Other income (expense):
Interest and other income		639			624
Interest and other expense		(2,537	)		(2,348	)
Valuation adjustment in Medscape investment		—			(6,953	)
Minority interest in losses		183			413
		(1,715	)		(8,264	)
Income before income taxes and equity in losses of affiliated companies:
Information management		7,753			5,045
Network services and systems		12,131			9,174
Other		—			(7,139	)
		19,884			7,080
Provision for income taxes		7,157			2,725
Income before equity in losses of affiliated companies		12,727			4,355
Equity in losses of affiliated companies, net of income taxes		(314	)		(299	)
Net income	$	12,413		$	4,056
Basic earnings per share:	$	0.36		$	0.12
Shares		34,260			33,970
Diluted earnings per share:	$	0.35		$	0.11
Shares		39,331			35,368

EX-99.1(B)2

Exhibit 99.1 (b) 2

GAAP

CONSOLIDATED STATEMENTS OF INCOME

NDCHealth Corporation and Subsidiaries

(In thousands, except per share data)

	Year Ended
	May 31, 2002			May 31, 2001
Revenues:
Information management	$	150,399		$	136,616
Network services and systems		198,622			176,015
Divested businesses		4,360			24,421
		353,381			337,052
Operating expenses:
Cost of service		174,944			168,691
Sales, general and administrative		76,961			77,640
Depreciation and amortization		24,374			34,745
Restructuring and impairment charges		—			2,156
		276,279			283,232
Operating income		77,102			53,820
Other income (expense):
Interest and other income		1,779			755
Interest and other expense		(9,693	)		(8,038	)
Valuation adjustment in Medscape investment		—			(6,953	)
Minority interest in losses		1,863			1,137
		(6,051	)		(13,099	)
Income before income taxes, equity in losses of affiliated companies, and discontinued operations:
Information management		25,315			18,225
Network services and systems		46,306			31,068
Other		(570	)		(8,572	)
		71,051			40,721
Provision for income taxes		25,577			15,753
Income before equity in losses of affiliated companies and discontinued operations:		45,474			24,968
Equity in losses of affiliated companies, net of income taxes		(2,064	)		(751	)
Income before discontinued operations		43,410			24,217
Discontinued operations, net of income taxes		—			8,323
Net income	$	43,410		$	32,540
Basic earnings per share:
Income before discontinued operations	$	1.27		$	0.73
Discontinued operations	$	—		$	0.25
Basic earnings per share	$	1.27		$	0.99
Shares		34,087			33,009
Diluted earnings per share:
Income before discontinued operations	$	1.22		$	0.71
Discontinued operations	$	—		$	0.24
Diluted earnings per share	$	1.22		$	0.95
Shares		39,636			34,153

EX-99.1(B)3

Exhibit 99.1 (b) 3

Normalized

CONSOLIDATED STATEMENTS OF INCOME

NDCHealth Corporation and Subsidiaries

(In thousands, except per share data)

	Three Months Ended
	May 31, 2002			May 31, 2001
Revenues:
Information management	$	40,173		$	37,190
Network services and systems		54,331			46,927
		94,504			84,117
Operating expenses:
Cost of service		47,588			41,504
Sales, general and administrative		19,369			18,663
Depreciation and amortization		5,948			8,420
		72,905			68,587
Operating income		21,599			15,530
Other income (expense):
Interest and other income		639			624
Interest and other expense		(2,537	)		(2,348	)
Minority interest in losses		183			413
		(1,715	)		(1,311	)
Income before income taxes and equity in losses of affiliated companies
Information management		7,753			5,045
Network services and systems		12,131			9,174
		19,884			14,219
Provision for income taxes		7,157			5,474
Income before equity in losses of affiliated companies		12,727			8,745
Equity in losses of affiliated companies, net of income taxes		(314	)		(299	)
Net income	$	12,413		$	8,446
Basic earnings per share:	$	0.36		$	0.25
Shares		34,260			33,970
Diluted earnings per share:	$	0.35		$	0.24
Shares		39,331			35,368

Normalized results for the three months ended May 31, 2001 exclude revenues and operating expenses related to divested businesses of $4.3 million and $4.5 million respectively, and valuation adjustment in Medscape investment of $7.0 million.

EX-99.1(B)4

Exhibit 99.1 (b) 4

Normalized

CONSOLIDATED STATEMENTS OF INCOME

NDCHealth Corporation and Subsidiaries

(In thousands, except per share data)

	Year Ended
	May 31, 2002			May 31, 2001
Revenues:
Information management	$	150,399		$	136,616
Network services and systems		198,622			176,015
		349,021			312,631
Operating expenses:
Cost of service		172,703			154,496
Sales, general and administrative		74,696			71,081
Depreciation and amortization		23,951			31,615
		271,350			257,192
Operating income		77,671			55,439
Other income (expense):
Interest and other income		1,779			755
Interest and other expense		(9,693	)		(8,038	)
Minority interest in losses		1,863			1,137
		(6,051	)		(6,146	)
Income before income taxes and equity in losses of affiliated companies:
Information management		25,314			18,225
Network services and systems		46,306			31,068
		71,620			49,293
Provision for income taxes		25,781			18,978
Income before equity in losses of affiliated companies		45,839			30,315
Equity in losses of affiliated companies, net of income taxes		(2,064	)		(751	)
Net income	$	43,775		$	29,564
Basic earnings per share	$	1.28		$	0.90
Shares		34,087			33,009
Diluted earnings per share:	$	1.23		$	0.87
Shares		39,636			34,153

Normalized results for the year ended May 31, 2002 exclude revenues and operating expenses related to divested businesses of $4.4 million and $4.9 million respectively. For the year ended May 31, 2001 normalized results exclude revenues and operating expenses related to divested businesses of $24.4 million and $23.9 million, respectively, valuation adjustment in Medscape investment of $7.0 million, restructuring and impairment charges primarily related to consolidation of locations and associated staff and expense reductions of $2.2 million, and discontinued operations of $8.3 million.

EX-99.1(B)5

Exhibit 99.1(b)5

CONSOLIDATED BALANCE SHEETS

NDCHealth Corporation and Subsidiaries

(In thousands, except share data)

	May 31, 2002			May 31, 2001
ASSETS
Current assets:
Cash and cash equivalents	$	13,447		$	12,420
Accounts receivable		76,161			70,648
Allowance for doubtful accounts		(5,710	)		(6,628	)
Accounts receivable, net		70,451			64,020
Income tax receivable		2,229			2,265
Deferred income taxes		19,987			29,539
Prepaid expenses and other current assets		23,258			18,788
Total current assets		129,372			127,032
Property and equipment, net		101,566			82,956
Intangible assets, net		377,322			221,757
Deferred income taxes		8,703			11,828
Investments		54,497			29,798
Other		15,024			10,990
Total Assets	$	686,484		$	484,361
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit	$	91,000		$	—
Short-term borrowings		11,906			—
Current portion of long-term debt		593			170
Obligations under capital leases		1,666			2,586
Accounts payable and accrued liabilities		76,047			53,228
Deferred income		21,089			13,624
Total current liabilities		202,301			69,608
Long-term debt		151,910			151,567
Obligations under capital leases		1,779			1,108
Other long-term liabilities		22,592			23,044
Total liabilities		378,582			245,327
Commitments and contingencies
Minority interest in equity of subsidiaries		21,856			12,418
Shareholders' equity:
Preferred stock, par value $1.00 per share; 1,000,000 shares authorized, none issued		—			—
Common stock, par value $.125 per share; 200,000,000 shares authorized; 34,643,922 and 33,875,235 shares issued, respectively.		4,330			4,234
Capital in excess of par value		212,026			188,636
Retained earnings		82,494			44,541
Deferred compensation and other		(6,743	)		(7,101	)
Other comprehensive income		(6,061	)		(3,694	)
Total shareholders' equity		286,046			226,616
Total Liabilities and Shareholders' Equity	$	686,484		$	484,361

EX-99.1(B)6

Exhibit 99.1(b)6

CONSOLIDATED STATEMENTS OF CASH FLOWS

NDCHealth Corporation and Subsidiaries

(In thousands)

	Year Ended May 31,
	2002			2001
Cash flows from operating activities:
Net income	$	43,410		$	32,540
Adjustments to reconcile net income to cash provided by operating activities:
Equity in losses of affiliated companies		2,064			751
Non-cash restructuring and impairment charges		—			930
Income from discontinued operations		—			(8,323	)
Depreciation and amortization		24,374			34,745
Deferred income taxes		4,080			10,977
Provision for bad debts		1,619			1,322
Valuation adjustment in Medscape investment		—			6,953
Other, net		269			54
Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:
Accounts receivable, net		(6,429	)		(4,121	)
Prepaid expenses and other assets		(3,492	)		(15,539	)
Accounts payable and accrued liabilities		(1,812	)		10,018
Deferred income		636			(9,114	)
Income taxes		(2,067	)		1,857
Net cash provided by operating activities		62,652			63,050
Cash flows from investing activities:
Capital expenditures		(30,985	)		(32,915	)
Business acquisitions, net of acquired cash		(119,626	)		(23,224	)
Business divestiture		—			20,000
Investments and other non-current assets		(14,310	)		(13,789	)
Net cash used in investing activities		(164,921	)		(49,928	)
Cash flows from financing activities:
Net short-term borrowings (repayments)		91,000			(68,500	)
Credit facility fees		(889	)		—
Net principal payments under capital lease arrangements and other long-term debt		(2,371	)		(4,814	)
Net issuances related to stock activities		6,559			7,360
Dividends paid		(5,457	)		(8,762	)
Net cash provided by (used in) financing activities		88,842			(74,716	)
Cash flows from discontinued operations:
Cash provided by tax benefits of discontinued operations		21,233			—
Cash used in discontinued operations		(6,779	)		(5,375	)
Cash dividend from Global Payments Inc.		—			77,600
Net cash provided by discontinued operations		14,454			72,225
Increase in cash and cash equivalents		1,027			10,631
Cash and cash equivalents, beginning of period		12,420			1,789
Cash and cash equivalents, end of period	$	13,447		$	12,420

EX-99.1(B)7

Exhibit 99.1(b)7

Consolidated Statement of Income

NDCHealth (GAAP)

(in thousands)

	FY01															FY02
	Qtr 1			Qtr 2			Qtr 3			Qtr 4			YTD			Qtr 1			Qtr 2			Qtr 3			Qtr 4			YTD
Revenues:
Information Management	$	31,109		$	33,412		$	34,905		$	37,190		$	136,616		$	34,186		$	37,097		$	38,943		$	40,173		$	150,399
Network Services and Systems		41,972			42,098			45,018			46,927			176,015			46,014			48,059			50,218			54,331			198,622
Divested Businesses		10,345			5,023			4,731			4,322			24,421			3,956			297			107			—			4,360
		83,426			80,533			84,654			88,439			337,052			84,156			85,453			89,268			94,504			353,381
Operating expenses:
Cost of service		41,808			39,904			43,515			43,464			168,691			39,094			43,852			44,410			47,588			174,944
Sales, general and administrative		20,134			18,385			18,653			20,468			77,640			20,986			17,262			19,344			19,369			76,961
Depreciation and amortization		8,213			8,683			8,686			9,163			34,745			6,581			5,897			5,948			5,948			24,374
Non-recurring charges		—			2,156			—			—			2,156			—			—			—			—			—
		70,155			69,128			70,854			73,095			283,232			66,661			67,011			69,702			72,905			276,279
Operating income		13,271			11,405			13,800			15,344			53,820			17,495			18,442			19,566			21,599			77,102
Other income/(expense)		(1,942	)		(1,781	)		(1,112	)		(8,264	)		(13,099	)		(1,643	)		(1,234	)		(1,459	)		(1,715	)		(6,051	)
IBITELDO—Information Management		3,434			4,624			5,122			5,045			18,225			4,527			6,132			6,903			7,753			25,315
IBITELDO—Network Services and Systems		7,428			7,121			7,345			9,174			31,068			11,390			11,394			11,391			12,131			46,306
IBITELDO—Other		467			(2,121	)		221			(7,139	)		(8,572	)		(65	)		(318	)		(187	)		—			(570	)
Income before income taxes, equity in losses of affiliated companies and discontinued operations—NDCHealth		11,329			9,624			12,688			7,080			40,721			15,852			17,208			18,107			19,884			71,051
Income Taxes		4,362			3,781			4,885			2,725			15,753			5,707			6,195			6,518			7,157			25,577
Income before equity in losses of affiliated companies and discontinued operations		6,967			5,843			7,803			4,355			24,968			10,145			11,013			11,589			12,727			45,474
Equity in losses of affiliated companies, net of taxes		(66	)		(139	)		(247	)		(299	)		(751	)		(1,114	)		(292	)		(344	)		(314	)		(2,064	)
Income before discontinued operations		6,901			5,704			7,556			4,056			24,217			9,031			10,721			11,245			12,413			43,410
Discontinued Operations, net of income taxes		8,649			(326	)		—			—			8,323			—			—			—			—			—
Net Income	$	15,550		$	5,378		$	7,556		$	4,056		$	32,540		$	9,031		$	10,721		$	11,245		$	12,413		$	43,410
Basic Shares		32,778			32,889			32,992			33,970			33,009			33,937			34,066			34,135			34,260			34,087
Basic earnings per share	$	0.47		$	0.16		$	0.23		$	0.12		$	0.99		$	0.27		$	0.31		$	0.33		$	0.36		$	1.27
Diluted Shares		36,193			34,057			34,348			35,368			34,153			35,530			39,822			39,721			39,331			39,636
Diluted earnings per share	$	0.46		$	0.16		$	0.22		$	0.11		$	0.95		$	0.25		$	0.30		$	0.31		$	0.35		$	1.22

EX-99.1(B)8

Exhibit 99.1(b)8

Consolidated Statement of Income

NDCHealth (Normalized)

(in thousands)

	FY01															FY02
	Qtr 1			Qtr 2			Qtr 3			Qtr 4			YTD			Qtr 1			Qtr 2			Qtr 3			Qtr 4			YTD
Revenues:
Information Management	$	31,109		$	33,412		$	34,905		$	37,190		$	136,616		$	34,186		$	37,097		$	38,943		$	40,173		$	150,399
Network Services and Systems		41,972			42,098			45,018			46,927			176,015			46,014			48,059			50,218			54,331			198,622
		73,081			75,510			79,923			84,117			312,631			80,200			85,156			89,161			94,504			349,021
Operating expenses:
Cost of service		34,533			37,314			41,145			41,504			154,496			36,971			43,643			44,501			47,588			172,703
Sales, general and administrative		18,407			16,759			17,252			18,663			71,081			19,511			16,856			18,960			19,369			74,696
Depreciation and amortization		7,337			7,911			7,947			8,420			31,615			6,158			5,897			5,948			5,948			23,951
		60,277			61,984			66,344			68,587			257,192			62,640			66,396			69,409			72,905			271,350
Operating income		12,804			13,526			13,579			15,530			55,439			17,560			18,760			19,752			21,599			77,671
Other income/(expense)		(1,942	)		(1,781	)		(1,112	)		(1,311	)		(6,146	)		(1,643	)		(1,234	)		(1,459	)		(1,715	)		(6,051	)
IBITEL—Information Management		3,434			4,624			5,122			5,045			18,225			4,527			6,132			6,902			7,753			25,314
IBITEL—Network Services and Systems		7,428			7,121			7,345			9,174			31,068			11,390			11,394			11,391			12,131			46,306
Income before income taxes and equity in losses of affiliated companies—NDCHealth		10,862			11,745			12,467			14,219			49,293			15,917			17,526			18,293			19,884			71,620
Income Taxes		4,182			4,522			4,800			5,474			18,978			5,730			6,309			6,585			7,157			25,781
Income before equity in losses of affiliated companies		6,680			7,223			7,667			8,745			30,315			10,187			11,217			11,708			12,727			45,839
Equity in losses of affiliated companies, net of taxes		(66	)		(139	)		(247	)		(299	)		(751	)		(1,114	)		(292	)		(344	)		(314	)		(2,064	)
Net Income	$	6,614		$	7,084		$	7,420		$	8,446		$	29,564		$	9,073		$	10,925		$	11,364		$	12,413		$	43,775
Basic Shares		32,778			32,889			32,992			33,970			33,009			33,937			34,066			34,135			34,260			34,087
Basic earnings per share	$	0.20		$	0.22		$	0.22		$	0.25		$	0.90		$	0.27		$	0.32		$	0.33		$	0.36		$	1.28
Diluted Shares		33,441			34,057			34,348			35,368			34,153			35,530			39,822			39,721			39,331			39,636
Diluted earnings per share	$	0.20		$	0.21		$	0.22		$	0.24		$	0.87		$	0.26		$	0.31		$	0.32		$	0.35		$	1.23