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): October 29, 2002

NDCHealth Corporation
(Exact name of registrant as specified in its charter)

DELAWARE	001-12392	58-0977458
(State or other jurisdiction of	(Commission File No.)	(IRS Employer
incorporation)		Identification Number)

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

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

None
(Former name or former address, if changed since last report.)

Item 5. Other

     1.     On October 29, 2002, we announced that we intend to pursue a refinancing that is expected to include a new $200 million senior secured credit facility (with respect to which NDCHealth has entered into a commitment letter with a group of banks), consisting of a five-year revolving credit facility and a six-year term loan, and a $175 million offering of ten-year senior subordinated notes in an unregistered offering pursuant to Rule 144A under the Securities Act of 1933. We intend to offer to exchange the unregistered notes for substantially identical registered senior subordinated notes following the completion of the offering.

          We intend to use the net proceeds from the offering, together with borrowings under the new credit agreement, to: (i) redeem all of our outstanding $143.8 million convertible subordinated notes due November 2003; (ii) repay all outstanding indebtedness under our existing revolving credit facility; and (iii) pay fees and expenses. Any remaining net proceeds will be used for general corporate purposes.

          The senior subordinated notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws.

          The press release contained forward-looking statements concerning our future financing plans. The terms and timing of any actual financing transactions will depend upon prevailing market conditions and other factors. There can be no assurance that the financing transactions discussed in the press release will be completed on the terms outlined herein or at all.

          A copy of the press release is attached hereto as Exhibit 99.1.

     2.     Exhibit 99.2 sets forth our pro forma statement of operations for the year ended May 31, 2002, which is hereby incorporated into this Item 5 as if fully set forth herein. In accordance with Securities and Exchange Commission Regulation S-X section 210.11.01, the pro forma statement of operations gives effect to our proposed refinancing plan described in paragraph 1 and the acquisition of a controlling interest in TechRx Incorporated as if they had occurred on June 1, 2001.

     3.     As part of the refinancing plan, we intend to issue senior subordinated notes that will be guaranteed by our material domestic subsidiaries. Exhibit 99.3 hereto sets forth supplemental consolidating financial information for our company, the proposed subsidiary guarantors and the proposed subsidiary non-guarantors, which is hereby incorporated into this Item 5 as if fully set forth herein.

     4.     We expect the financial impact of the proposed refinancing described in paragraph 1 to include the following for fiscal 2003:

• for the full fiscal year 2003, we expect our diluted earnings per share to be in the range of $1.35 to $1.42, including the impact of the refinancing and the charges related to early extinguishment of debt;

• Other income (expense) in fiscal 2003 is expected to increase by approximately $9.5 to $12.5 million in expense based on an assumed average interest rate range of 7.6% to 9.6%;

• diluted share count for the third and fourth quarters of fiscal 2003 is expected to be in the range of 35.0 to 35.5 million, following the redemption of the outstanding convertible subordinated notes;

• the increase in expense in Other income (expense) and the change in the diluted share count is expected to decrease earnings per share in fiscal 2003 by approximately $0.15 to $0.20 per share including the early extinguishment charge described below; and

• we expect to record non-recurring charges for early extinguishment of our existing 5% convertible subordinated notes and our revolving credit facility in fiscal 2003. These include the call premium of $1.0 million and the write-off of unamortized debt issuance costs of $1.4 million. The total charges are expected to be approximately $0.04 per share and are included in the $0.15 to $0.20 per share described above.

     The actual financial impact of the proposed refinancing will depend on many factors, including the actual interest rates on the new credit facility and the senior subordinated notes.

     This paragraph 4 contains forward-looking statements regarding the expected financial impact of our proposed refinancing plan within the meaning of the federal securities laws. These statements are based on our beliefs and assumptions, which in turn are based on currently available information. Important assumptions regarding these statements include, among others, the expected terms and timing of any refinancing transactions. Our assumptions could prove to be inaccurate. These forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those projected. Many of these factors are beyond our ability to control or predict and include, among others, prevailing market conditions, changes in our industry, our ability to expand into new markets and introduce new, profitable products, our ability to successfully integrate acquisitions and

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general economic conditions. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on these statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Item 7. Financial Statements and Exhibits

Exhibit 99.1	Text of press release dated October 29, 2002
Exhibit 99.2	(a) Introduction to Pro Forma Information
	(b) Pro forma Combined Statement of Operations for the year ended May 31, 2002
	(c) Notes to Pro Forma Combined Statement of Operations
Exhibit 99.3	Supplemental Consolidating Financial Information for fiscal years ended May 31, 2001 and 2002 and the three months ended August 31, 2001 and August 30, 2002

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SIGNATURE

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

NDCHealth Corporation
(Registrant)
By:	/s/ David H. Shenk
	David H. Shenk
	Vice President & Corporate Controller
	(Chief Accounting Officer)

Date: November 1, 2002

-5- EX-99.1 3 g78911exv99w1.htm TEXT OF PRESS RELEASE DATED OCTOBER 29, 2002

EXHIBIT 99.1

NDCHEALTH ANNOUNCES REFINANCING PLAN

ATLANTA, GEORGIA, OCTOBER 29, 2002 — NDCHealth Corporation (NYSE: NDC) announced today that it intends to pursue a refinancing that is expected to include a new $200 million senior secured credit facility (with respect to which NDCHealth has entered into a commitment letter with a group of banks), consisting of a five-year revolving credit facility and a six-year term loan, and a $175 million offering of ten-year senior subordinated notes in an unregistered offering pursuant to Rule 144A under the Securities Act of 1933. NDCHealth intends to offer to exchange the unregistered notes for substantially identical registered senior subordinated notes following the completion of the offering.

     NDCHealth intends to use the net proceeds from the offering, together with borrowings under the new credit agreement, to: (i) redeem all of its outstanding 5% convertible subordinated notes due November 2003 for an aggregate redemption price of $144.8 million plus accrued and unpaid interest to the redemption date; (ii) repay all indebtedness outstanding under its existing revolving credit facility; and (iii) pay fees and expenses. Any remaining net proceeds will be used for general corporate purposes.

     The senior subordinated notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws.

###

This press release contains forward-looking statements concerning NDCHealth’s future financing plans. The terms and timing of any actual financing transactions will depend upon prevailing market conditions and other factors. There can be no assurance that the financing transactions discussed in this press release will be completed on the terms outlined herein or at all.

EX-99.2.(A) 4 g78911exv99w2wxay.htm INTRODUCTION TO PRO FORMA INFORMATION

EXHIBIT 99.2 (a)

INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION

     The following pro forma combined statement of operations has been prepared to give effect to the acquisition of a controlling interest in TechRx Incorporated and the proposed refinancing plan as if they had occurred on June 1, 2001. This proposed refinancing includes (1) the issuance of $175 million aggregate principal amount of ten-year senior subordinated notes due 2012 and a new $200 million credit facility and (2) our use of the net proceeds from the issuance of the notes and borrowings under our proposed new credit facility to repay in full all indebtedness under our existing credit agreement and to redeem all of our outstanding 5% convertible subordinated notes due 2003.

     For the period presented, NDCHealth had a fiscal year end of May 31. TechRx previously had a fiscal year end of June 30, 2001. Because of our acquisition of a controlling interest, TechRx has changed their fiscal year to coincide with ours. As a result, TechRx’s most recent results are for the eleven months ended May 31, 2002. For the purposes of the pro forma combined statement of operations for the year ended May 31, 2002, TechRx’s results for the month of June 2001 have been combined with their results for the eleven months ended May 31, 2002 to provide an equivalent period to NDCHealth financial information for the year ended May 31, 2002. During the month of June 2001, TechRx recorded significant restructuring and impairment charges. Thus, these unusual items are included in the pro forma combined statement of operations for the year ended May 31, 2002.

     The pro forma combined statement of operations is not necessarily indicative of the results of operations that would have occurred if the acquisition or proposed refinancing plan had occurred on the date indicated or expected financial results of operations in the future. The pro forma combined statement of operations should be read in conjunction with the related notes to the pro forma combined statement of operations.

EX-99.2.(B) 5 g78911exv99w2wxby.htm PRO FORMA COMBINED STATEMENT OF OPERATIONS

EXHIBIT 99.2 (b)

PRO FORMA COMBINED STATEMENT OF OPERATIONS

For the Year Ended May 31, 2002
Unaudited
(in thousands, except per share data)

								PRO FORMA						PRO FORMA
								ADJUSTMENTS			PRO FORMA			ADJUSTMENTS			PRO FORMA
		NDCHEALTH			TECHRX			(A)			NDCHEALTH			(B)			NDCHEALTH
Revenues:
	Information management	$	150,399		$	—		$	—		$	150,399		$	—		$	150,399
	Network services and systems		198,622			45,637			(8,876	)(1)		235,383			—			235,383
	Divested businesses		4,360			—			—			4,360			—			4,360
			353,381			45,637			(8,876	)		390,142			—			390,142
Operating expenses:
	Cost of service		174,944			38,154			(6,840	)(1)		206,258			—			206,258
	Sales, general and administrative		76,961			12,545			—			89,506			—			89,506
	Depreciation and amortization		24,374			7,996			(4,584	)(1,5)		27,786			—			27,786
	Restructuring and impairment charges		—			10,488			—			10,488			—			10,488
			276,279			69,183			(11,424	)		334,038			—			334,038
Operating income (loss)			77,102			(23,546	)		2,548			56,104			—			56,104
Other income (expense):
	Interest and other income		1,779			168			(352	)(1)		1,595			—			1,595
	Interest and other expense		(9,693	)		(1,393	)		(762	)(1,4)		(11,848	)		(18,613	)(1,2)		(30,461	)
	Valuation adjustment		(41,000	)		—			—			(41,000	)		—			(41,000	)
	Minority interest in losses		1,863			—			9,210	(2)		11,073			—			11,073
			(47,051	)		(1,225	)		8,096			(40,180	)		(18,613	)		(58,793	)
Income (loss) before income taxes and equity in losses of affiliated companies			30,051			(24,771	)		10,644			15,924			(18,613	)		(2,689	)
Provision for income taxes			12,877			60			3,832	(6)		16,769			(6,701	)(3)		10,068
Income (loss) before equity in losses of affiliated companies			17,174			(24,831	)		6,812			(845	)		(11,912	)		(12,757	)
Equity in losses of affiliated companies			(2,064	)		—			1,514	(3)		(550	)		—			(550	)
Net income (loss)		$	15,110		$	(24,831	)	$	8,326		$	(1,395	)	$	(11,912	)	$	(13,307	)
Basic earnings (loss) per share		$	0.44								$	(0.04	)				$	(0.39	)
	Number of shares		34,087									34,489						34,489
Diluted earnings (loss) per share		$	0.43								$	(0.04	)				$	(0.39	)
	Number of shares		35,496									34,489						34,489

See notes to the pro forma Combined Statement of Operations.

EX-99.2.(C) 6 g78911exv99w2wxcy.htm NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATION

EXHIBIT 99.2(c)

NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS

a) The following pro forma adjustments were made to the historical combined statement of operations of NDCHealth for the year ended May 31, 2002 to reflect the acquisition of TechRx as if it had occurred on June 1, 2001.

(1)	To eliminate inter-company transactions. NDCHealth and TechRx provide services to one another and therefore have related revenues and expenses. TechRx has recorded amounts related to its Market Development Agreement with NDCHealth as amortization expense. These inter-company transactions have been eliminated so that the Combined Statement of Income reflects revenues and expenses associated only with other non-related entities.
(2)	To reflect the minority partners’ interest in the losses of TechRx. Because NDCHealth does not have complete ownership of TechRx, this amount reflects the minority partners’ interest in TechRx’s operating losses.
(3)	To eliminate NDCHealth’s equity in TechRx’s losses. NDCHealth previously accounted for its investment in TechRx under the cost method. Due to NDCHealth’s additional investment in TechRx in the fourth quarter of fiscal 2002, Accounting Principles Board Opinion No. 18 requires TechRx to be treated as if NDCHealth had accounted for TechRx as an equity investment since the inception of the initial investment.
(4)	To reflect the incremental interest costs of $1,115 associated with borrowing the cash portion of the acquisition price.
(5)	To reflect the amortization of acquired intangibles of $1,416. NDCHealth’s acquisition of a controlling interest in TechRx has resulted in acquired intangibles and goodwill.
(6)	To reflect the income tax effect of the above adjustments.

b) The following pro forma adjustments were made to the historical combined statement of operations of NDCHealth for the year ended May 31, 2002 to reflect the change in its capital structure as if it had occurred on June 1, 2001.

(1)	To reflect the redemption of the 5% Convertible Subordinated Notes due 2003 ($7,188 reduced interest expense, $584 reduced amortization of issuance costs) and the issuance of new debt with an assumed weighted average interest rate of 8.6% as if these events had occurred on June 1, 2001. The effect of a 1/4% change in this assumed average rate would result in a change of $750.
(2)	To remove the incremental interest costs of $1,115 associated with borrowing the cash portion of the acquisition price under our previous line of credit.
(3)	To reflect the income tax effect of the above adjustments.

EX-99.3 7 g78911exv99w3.htm SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

EXHIBIT 99.3

CONSOLIDATING FINANCIAL DATA OF SUBSIDIARY GUARANTORS

Under the proposed terms of our senior subordinated notes, our material subsidiaries propose to fully and unconditionally guarantee the notes on a joint and several basis. As of the date hereof, these subsidiaries would include NDC Health Information Services (Arizona) Inc., The Computer Place, Inc., NDCHealth Intellectual Property Corp., HISIP Corp., NDCIP, Inc., NDCHealth Licensing, Inc. and TechRx Incorporated. NDC Health Information Services (Arizona) Inc., The Computer Place, Inc., NDCHealth Intellectual Property Corp., HISIP Corp., NDCIP, Inc. and NDCHealth Licensing, Inc. are wholly owned subsidiaries of our company. We currently own 63% of the outstanding capital stock of TechRx Incorporated and, if certain conditions are met, we will acquire the remaining 37% during fourth quarter of fiscal 2003.

Presented below is our consolidating financial data, including the combined financial data for our subsidiary guarantors and our subsidiary non-guarantors.

Statement of Operations for the		NDCHealth			Subsidiary			Subsidiary
Year Ended May 31, 2002 (in thousands)		Corporation			Guarantors			Non-Guarantors			Consolidated
Revenues		$	162,083		$	165,595		$	25,703		$	353,381
	Cost of service		56,741			99,400			18,803			174,944
	Other operating expenses		35,941			55,485			9,909			101,335
Operating income (loss)			69,401			10,710			(3,009	)		77,102
Other income (expense)			(47,409	)		(76	)		434			(47,051	)
Income (loss) before income taxes and equity in losses of affiliated companies			21,992			10,634			(2,575	)		30,051
Provision for income taxes			9,741			4,027			(891	)		12,877
Income (loss) before equity in losses of affiliated companies			12,251			6,607			(1,684	)		17,174
Equity in losses of affiliated companies			(1,514	)		—			(550	)		(2,064	)
	Net income (loss)	$	10,737		$	6,607		$	(2,234	)	$	15,110

Statement of Operations for the		NDCHealth			Subsidiary			Subsidiary
Year Ended May 31, 2001 (in thousands)		Corporation			Guarantors			Non-Guarantors			Consolidated
Revenues		$	156,693		$	155,562		$	24,797		$	337,052
	Cost of service		60,794			84,288			23,609			168,691
	Other operating expenses		60,433			49,007			5,101			114,541
Operating income (loss)			35,466			22,267			(3,913	)		53,820
Other income (expense)			(19,274	)		(2,428	)		8,603			(13,099	)
Income before income taxes and equity in losses of affiliated companies			16,192			19,839			4,690			40,721
Provision for income taxes			7,419			6,281			2,053			15,753
Income before equity in losses of affiliated companies			8,773			13,558			2,637			24,968
Equity in losses of affiliated companies			(751	)		—			—			(751	)
Income before discontinued operations			8,022			13,558			2,637			24,217
Discontinued operations, net of income taxes			—			—			8,323			8,323
	Net income	$	8,022		$	13,558		$	10,960		$	32,540

Statement of Cash Flows for the	NDCHealth			Subsidiary			Subsidiary
Year Ended May 31, 2002 (in thousands)	Corporation			Guarantors			Non-Guarantors			Consolidated
Cash flows from operating activities:
Net income (loss)	$	10,737		$	6,607		$	(2,234	)	$	15,110
Adjustments to reconcile net income (loss) to cash provided by operating activities:		61,320			12,514			(13,128	)		60,706
Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:		(9,556	)		(4,523	)		915			(13,164	)
Net cash provided (used) by operating activities		62,501			14,598			(14,447	)		62,652
Cash flows from investing activities:		(159,306	)		(5,615	)		—			(164,921	)
Cash flows from financing activities:		90,510			(1,668	)		—			88,842
Cash flows from discontinued operations:		—			—			14,454			14,454
Increase (decrease) in cash and cash equivalents		(6,295	)		7,315			7			1,027
Cash and cash equivalents, beginning of period		10,695			72			1,653			12,420
Cash and cash equivalents, end of period	$	4,400		$	7,387		$	1,660		$	13,447
Statement of Cash Flows for the	NDCHealth			Subsidiary			Subsidiary
Year Ended May 31, 2001 (in thousands)	Corporation			Guarantors			Non-Guarantors			Consolidated
Cash flows from operating activities:
Net income	$	8,022		$	13,558		$	10,960		$	32,540
Adjustments to reconcile net income to cash provided by operating activities:		29,223			20,302			(2,116	)		47,409
Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:		(4,449	)		(15,753	)		3,303			(16,899	)
Net cash provided by operating activities		32,796			18,107			12,147			63,050
Cash flows from investing activities:		(31,727	)		(12,990	)		(5,211	)		(49,928	)
Cash flows from financing activities:		(69,051	)		(5,665	)		—			(74,716	)
Cash flows from discontinued operations:		77,600			—			(5,375	)		72,225
Increase (decrease) in cash and cash equivalents		9,618			(548	)		1,561			10,631
Cash and cash equivalents, beginning of period		1,077			620			92			1,789
Cash and cash equivalents, end of period	$	10,695		$	72		$	1,653		$	12,420

Balance Sheet as of			NDCHealth		Subsidiary		Subsidiary
May 31, 2002 (in thousands)			Corporation		Guarantors		Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents		$	4,400	$	7,387	$	1,660		$	—		$	13,447
	Accounts receivable			30,224		36,906		5,180			(1,859	)		70,451
	Income taxes			13,828		272		6,812			1,304			22,216
	Prepaid expenses and other current assets			20,516		11,464		2,857			(11,579	)		23,258
		Total current assets		68,968		56,029		16,509			(12,134	)		129,372
Property and equipment, net				47,806		50,600		3,057			103			101,566
Intangible assets, net				154,099		124,871		44,608			53,744			377,322
Investments				358,826		—		37,559			(382,888	)		13,497
Inter-company				148,050		—		(28,063	)		(119,987	)		—
Other				33,487		3,500		18,904			(19,464	)		36,427
		Total Assets	$	811,236	$	235,000	$	92,574		$	(480,626	)	$	658,184
Liabilities and Stockholders’ Equity
Current liabilities:
	Line of credit		$	91,000	$	—	$	—		$	—		$	91,000
	Short-term borrowings			—		11,906		—			—			11,906
	Current portion of long-term debt			997		1,630		—			(368	)		2,259
	Accounts payable and accrued liabilities			40,318		30,211		13,624			(8,106	)		76,047
	Deferred income			5,453		14,800		836			—			21,089
		Total current liabilities		137,768		58,547		14,460			(8,474	)		202,301
Long-term liabilities				194,476		119,681		10,073			(147,949	)		176,281
		Total liabilities		332,244		178,228		24,533			(156,423	)		378,582
Minority interest in equity of subsidiaries				—		—		10,630			11,226			21,856
Stockholders’ equity				478,992		56,772		57,411			(335,429	)		257,746
Total Liabilities and Stockholders’ Equity			$	811,236	$	235,000	$	92,574		$	(480,626	)	$	658,184

Balance Sheet as of			NDCHealth		Subsidiary		Subsidiary
May 31, 2001 (in thousands)			Corporation		Guarantors		Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents		$	10,695	$	72	$	1,653		$	—		$	12,420
	Accounts receivable			37,552		23,632		2,836			—			64,020
	Income taxes			14,795		—		17,009			—			31,804
	Prepaid expenses and other current assets			8,321		7,186		3,281			—			18,788
		Total current assets		71,363		30,890		24,779			—			127,032
Property and equipment, net				45,029		34,017		3,910			—			82,956
Intangible assets, net				108,447		81,644		31,666			—			221,757
Investments				290,099		—		45,388			(305,689	)		29,798
Inter-company				135,654		—		(16,546	)		(119,108	)		—
Other				16,030		4,056		2,732			—			22,818
		Total Assets	$	666,622	$	150,607	$	91,929		$	(424,797	)	$	484,361
Liabilities and Stockholders’ Equity
Current liabilities:
	Current portion of long-term debt		$	844	$	1,901	$	11		$	—		$	2,756
	Accounts payable and accrued liabilities			31,828		8,559		12,841			—			53,228
	Deferred income			6,407		1,523		5,694			—			13,624
		Total current liabilities		39,079		11,983		18,546			—			69,608
Long-term liabilities				174,629		111,246		8,952			(119,108	)		175,719
		Total liabilities		213,708		123,229		27,498			(119,108	)		245,327
Minority interest in equity of subsidiaries				—		—		12,418			—			12,418
Stockholders’ equity				452,914		27,378		52,013			(305,689	)		226,616
Total Liabilities and Stockholders’ Equity			$	666,622	$	150,607	$	91,929		$	(424,797	)	$	484,361

Statement of Operations for the		NDCHealth			Subsidiary			Subsidiary
Three Months Ended August 30, 2002 (in thousands)		Corporation			Guarantors			Non-Guarantors			Eliminations			Consolidated
Revenues		$	43,184		$	52,751		$	7,599		$	(3,452	)	$	100,082
	Cost of service		14,927			31,428			5,883			(437	)		51,801
	Other operating expenses		8,210			18,600			3,100			(2,148	)		27,762
Operating income (loss)			20,047			2,723			(1,384	)		(867	)		20,519
Other income (expense)			(2,956	)		(345	)		415			302			(2,584	)
Income (loss) before income taxes and equity in losses of affiliated companies			17,091			2,378			(969	)		(565	)		17,935
Provision for income taxes			6,153			842			(334	)		(203	)		6,458
Income (loss) before equity in losses of affiliated companies			10,938			1,536			(635	)		(362	)		11,477
Equity in losses of affiliated companies			(312	)		—			—			—			(312	)
	Net income (loss)	$	10,626		$	1,536		$	(635	)	$	(362	)	$	11,165

Statement of Operations for the		NDCHealth			Subsidiary			Subsidiary
Three Months Ended August 31, 2001 (in thousands)		Corporation			Guarantors			Non-Guarantors			Consolidated
Revenues		$	38,722		$	39,372		$	6,062		$	84,156
	Cost of service		13,760			21,148			4,186			39,094
	Other operating expenses		10,206			14,655			2,706			27,567
Operating income (loss)			14,756			3,569			(830	)		17,495
Other income (expense)			(1,873	)		(22	)		252			(1,643	)
Income (loss) before income taxes and equity in losses of affiliated companies			12,883			3,547			(578	)		15,852
Provision for income taxes			4,638			1,353			(284	)		5,707
Income(loss) before equity in losses of affiliated companies			8,245			2,194			(294	)		10,145
Equity in losses of affiliated companies			(1,114	)		—			—			(1,114	)
	Net income (loss)	$	7,131		$	2,194		$	(294	)	$	9,031

Statement of Cash Flows for the	NDCHealth			Subsidiary			Subsidiary
Three Months Ended August 30, 2002 (in thousands)	Corporation			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	10,626		$	1,536		$	(635	)	$	(362	)	$	11,165
Adjustments to reconcile net income (loss) to cash provided by operating activities:		12,970			5,193			(7,942	)		(101	)		10,120
Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:		(14,579	)		(6,745	)		5,589			463			(15,272	)
Net cash provided by operating activities		9,017			(16	)		(2,988	)		—			6,013
Cash flows from investing activities:		(9,934	)		(6,020	)		(2,021	)		—			(17,975	)
Cash flows from financing activities:		(823	)		(223	)		(214	)		—			(1,260	)
Cash flows from discontinued operations:		—			—			5,053			—			5,053
Increase (decrease) in cash and cash equivalents		(1,740	)		(6,259	)		(170	)		—			(8,169	)
Cash and cash equivalents, beginning of period		4,400			7,387			1,660			—			13,447
Cash and cash equivalents, end of period	$	2,660		$	1,128		$	1,490		$	—		$	5,278

Statement of Cash Flows for the	NDCHealth			Subsidiary			Subsidiary
Three Months Ended August 31, 2001 (in thousands)	Corporation			Guarantors			Non-Guarantors			Consolidated
Cash flows from operating activities:
Net income (loss)	$	7,131		$	2,194		$	(294	)	$	9,031
Adjustments to reconcile net income (loss) to cash provided by operating activities:		7,152			3,351			(2,182	)		8,321
Changes in assets and liabilities which provided (used) cash, net of the effects of acquisitions:		(12,450	)		(2,910	)		9,076			(6,284	)
Net cash provided by operating activities		1,833			2,635			6,600			11,068
Cash flows from investing activities:		(2,666	)		(843	)		(827	)		(4,336	)
Cash flows from financing activities:		266			(1,349	)		(44	)		(1,127	)
Cash flows from discontinued operations:		—			—			1,207			1,207
Increase (decrease) in cash and cash equivalents		(567	)		443			6,936			6,812
Cash and cash equivalents, beginning of period		10,695			72			1,653			12,420
Cash and cash equivalents, end of period	$	10,128		$	515		$	8,589		$	19,232

Balance Sheet as of			NDCHealth		Subsidiary		Subsidiary
August 30, 2002 (in thousands)			Corporation		Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents		$	2,660	$	1,128	$	1,490	$	—		$	5,278
	Accounts receivable			33,659		41,523		4,509		(4,923	)		74,768
	Income taxes			8,811		321		5,420		1,587			16,139
	Prepaid expenses and other current assets			22,691		9,688		2,787		(9,443	)		25,723
		Total current assets		67,821		52,660		14,206		(12,779	)		121,908
Property and equipment, net				50,188		54,047		4,578		—			108,813
Intangible assets, net				153,373		122,789		47,190		57,152			380,504
Investments				390,521		—		7,739		(384,458	)		13,802
Intercompany receivables				123,588		—		—		(123,588	)		—
Other				29,816		3,568		21,286		(19,975	)		34,695
		Total Assets	$	815,307	$	233,064	$	94,999	$	(483,648	)	$	659,722
Liabilities and Stockholders’ Equity
Current liabilities:
	Line of credit		$	91,000	$	—	$	—	$	—		$	91,000
	Short-term borrowings			—		11,375		—		—			11,375
	Current portion of long-term debt			5,827		1,836		3		(440	)		7,226
	Accounts payable and accrued liabilities			34,376		25,491		11,820		(8,109	)		63,578
	Deferred income			5,574		15,319		983		—			21,876
		Total current liabilities		136,777		54,021		12,806		(8,549	)		195,055
Long-term liabilities				189,233		120,264		13,255		(150,251	)		172,501
		Total liabilities		326,010		174,285		26,061		(158,800	)		367,556
Minority interest in equity of subsidiaries				—		121		10,131		11,339			21,591
Stockholders’ equity				489,297		58,658		58,807		(336,187	)		270,575
Total Liabilities and Stockholders’ Equity			$	815,307	$	233,064	$	94,999	$	(483,648	)	$	659,722

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EX-99.1

Text of press release dated October 29, 2002

EX-99.2.(A)

Introduction to Pro Forma Information

EX-99.2.(B)

Pro Forma Combined Statement of Operations

EX-99.2.(C)

Notes to Pro Forma Combined Statement of Operation

EX-99.3

Supplemental Consolidated Financial Information