IMS Health Holdings, Inc. (Form: 10-Q, Received: 07/28/2016 16:21:22)

‘

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36381

IMS HEALTH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

27-1335689

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

83 Wooster Heights Road, Danbury, CT 06810

(Address of principal executive offices and Zip Code)

(203) 448-4600

(Registrant’s telephone number, including area code)

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Class		Number of Shares Outstanding
Common Stock $0.01 par value		329,214,721 shares outstanding as of July 22, 2016

IMS HEALTH HOLDINGS, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	2

	Condensed Consolidated Statements of Financial Position as of June 30, 2016 and December 31, 2015	2

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015	3

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	4

	Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2016 and 2015	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 6.	Exhibits	32

SIGNATURES		33

P ART I—FINANCIAL INFORMATION

Item 1. Financial Statements

IMS HEALTH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited)

	June 30,			December 31,
(in millions, except per share data)	2016			2015
Assets
Current Assets:
Cash and cash equivalents	$	368		$	396
Accounts receivable, net		557			508
Other current assets		218			188
Total Current Assets		1,143			1,092
Property, plant and equipment, at cost		337			314
Less accumulated depreciation		(162	)		(147	)
Property, plant and equipment, net		175			167
Computer software, net		334			309
Goodwill		3,917			3,604
Other identifiable intangibles, net		2,241			2,178
Other assets		129			109
Total Assets	$	7,939		$	7,459

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	117		$	163
Accrued and other current liabilities		592			611
Current portion of long-term debt		82			59
Deferred revenues		233			200
Total Current Liabilities		1,024			1,033
Postretirement and postemployment benefits		109			109
Long-term debt		4,417			4,136
Deferred tax liability		549			526
Other liabilities		94			83
Total Liabilities		6,193			5,887

Commitments and Contingencies (Note 11)

Stockholders’ Equity:
Common Stock, $0.01 par value, 700.0 shares authorized, 342.6 and 341.8 shares issued at June 30, 2016 and December 31, 2015, respectively		3			3
Capital in excess of par		2,051			2,038
Retained earnings		275			208
Treasury stock, at cost, 13.6 and 12.6 shares at June 30, 2016 and December 31, 2015, respectively		(353	)		(327	)
Accumulated other comprehensive loss		(230	)		(350	)
Total Stockholders’ Equity		1,746			1,572
Total Liabilities and Stockholders’ Equity	$	7,939		$	7,459

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

IMS HEALTH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except per share data)	2016			2015			2016			2015
Revenue	$	802		$	742		$	1,576		$	1,374
Information		383			374			759			728
Technology services		419			368			817			646
Operating costs of information, exclusive of depreciation and amortization		175			169			335			326
Direct and incremental costs of technology services, exclusive of depreciation and amortization		240			195			462			333
Selling and administrative expenses, exclusive of depreciation and amortization		168			180			345			317
Depreciation and amortization		88			81			175			177
Severance, impairment and other charges		52			21			67			34
Operating Income		79			96			192			187
Interest income		1			1			2			1
Interest expense		(47	)		(43	)		(93	)		(80	)
Other income (loss), net		(2	)		6			(7	)		10
Non-Operating Loss, Net		(48	)		(36	)		(98	)		(69	)
Income before income taxes		31			60			94			118
(Provision for) benefit from income taxes		(7	)		(13	)		(27	)		227
Net Income	$	24		$	47		$	67		$	345

Earnings per Share Attributable to Common Stockholders:
Basic	$	0.07		$	0.14		$	0.20		$	1.03
Diluted	$	0.07		$	0.14		$	0.20		$	1.01
Weighted-Average Common Shares Outstanding:
Basic		328.8			331.6			328.7			333.6
Diluted		335.5			340.0			335.6			342.6

Comprehensive Income:
Net Income	$	24		$	47		$	67		$	345
Cumulative translation adjustment (net of taxes of $(16) and $27 for the three months ended and $4 and $(21) for the six months ended, respectively)	$	60		$	23		$	131		$	(54	)
Unrealized (losses) gains on derivatives (net of taxes of $2 and $— for the three months ended and $7 and $(1) for the six months ended, respectively)		(4	)		—			(11	)		1
Losses (gains) on derivative instruments, reclassified into earnings (net of taxes of $(1) and $3 for the three months ended and $ — and $5 for the six months ended, respectively)		1			(4	)		—			(8	)
Other Comprehensive Income (Loss)	$	57		$	19		$	120		$	(61	)
Total Comprehensive Income	$	81		$	66		$	187		$	284

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

IMS HEALTH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended
	June 30,
(in millions)	2016			2015
Cash Flows from Operating Activities:
Net Income	$	67		$	345
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Depreciation and amortization		175			177
Deferred income taxes		(11	)		(270	)
Non-cash stock-based compensation charges		15			14
Non-cash gains on derivative instruments		(12	)		(11	)
Non-cash amortization of debt original issue discount and issuance costs		6			5
Loss on Venezuela remeasurement		2			7
Excess tax benefits from stock-based compensation		(3	)		(19	)
Other		(1	)		3
Change in assets and liabilities, excluding effects from acquisitions and dispositions:
Net increase in current assets		(59	)		(11	)
Net decrease in current liabilities		(63	)		(21	)
Increase in pension assets (net of liabilities)		(5	)		(5	)
(Increase) decrease in other long-term assets (net of other long-term liabilities)		(15	)		1
Net Cash Provided by Operating Activities		96			215

Cash Flows from Investing Activities:
Capital expenditures		(32	)		(25	)
Additions to computer software		(60	)		(53	)
Payments for acquisitions of businesses, net of cash acquired		(279	)		(373	)
Other investing activities, net		(1	)		—
Net Cash Used in Investing Activities		(372	)		(451	)

Cash Flows from Financing Activities:
Borrowings under revolving credit facility		306			204
Repayments of revolving credit facility		(289	)		(202	)
Proceeds from issuance of debt		300			496
Repayments of debt		(38	)		(27	)
Debt-related fees		—			(5	)
Contingent consideration and deferred purchase price payments		(7	)		(4	)
Proceeds from equity plan activity		2			23
Payments for treasury stock		(29	)		(300	)
Excess tax benefits from stock-based compensation		3			19
Other financing activities		(7	)		(1	)
Net Cash Provided by Financing Activities		241			203

Effect of Exchange Rate Changes on Cash and Cash Equivalents		7			(9	)
Decrease in Cash and Cash Equivalents		(28	)		(42	)
Cash and Cash Equivalents, Beginning of Period		396			390
Cash and Cash Equivalents, End of Period	$	368		$	348

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

IMS HEALTH HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in millions)	Shares Common Stock			Shares Treasury Stock			Common Stock		Treasury Stock			Capital in Excess of Par			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance, December 31, 2015		341.8	⁽¹⁾		(12.6	)	$	3	$	(327	)	$	2,038		$	208		$	(350	)	$	1,572
Net income																67						67
Issuances of common stock and vesting of restricted stock		0.8								(1	)		(5	)								(6	)
Repurchases of common stock					(1.0	)				(25	)											(25	)
Stock-based compensation expense													15									15
Net tax benefit on stock-based compensation													3									3
Other comprehensive income (loss), net of tax																			120			120
Balance, June 30, 2016		342.6			(13.6	)	$	3	$	(353	)	$	2,051		$	275		$	(230	)	$	1,746

(in millions)	Shares Common Stock			Shares Treasury Stock			Common Stock		Treasury Stock			Capital in Excess of Par			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance, December 31, 2014		335.6			(0.8	)	$	3	$	(10	)	$	1,975		$	(209	)	$	(217	)	$	1,542
Net income																345						345
Issuances of common stock		4.6											24									24
Repurchases of common stock					(11.1	)				(300	)											(300	)
Stock-based compensation expense													14									14
Net tax benefit on stock-based compensation													19									19
Other comprehensive income (loss), net of tax																			(61	)		(61	)
Balance, June 30, 2015		340.2			(11.9	)	$	3	$	(310	)	$	2,032		$	136		$	(278	)	$	1,583

⁽¹⁾ Shares of common stock at December 31, 2015 were revised to include 0.9 million restricted shares granted on December 31, 2015.

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Basis of Presentation and Recently Issued Accounting Standards

Background

IMS Health Holdings, Inc. (the “Company”) is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. The Company has one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media. For information offerings, the Company receives data without patient identifiers and standardizes, organizes, structures and integrates this data by applying its sophisticated analytics and leveraging its global technology infrastructure to help its clients run their organizations more efficiently and make better decisions to improve their operational and financial performance. The Company has a presence in over 100 countries and generated 61% of its 2015 revenue from outside the United States.

The Company serves key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s information and technology services offerings, which it has developed with significant investment over its 60+ year history, are deeply integrated into its clients’ workflow.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The Condensed Consolidated Financial Statements do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, all of which are of a normal recurring nature, considered necessary for a fair statement of financial position, results of operations and comprehensive income, cash flows and stockholders’ equity for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. The December 31, 2015 Condensed Consolidated Statement of Financial Position was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and related notes of IMS Health Holdings, Inc. included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain prior year amounts have been reclassified to conform to the 2016 presentation. Amounts presented in the Condensed Consolidated Financial Statements may not add due to rounding.

Merger with Quintiles Transnational Holdings, Inc.

On May 3, 2016, the Company and Quintiles Transnational Holdings Inc. (“Quintiles”) entered into a definitive merger agreement, pursuant to which the companies will be combined. The merged company will be renamed Quintiles IMS Holdings, Inc. Under the terms of the merger agreement, the Company’s shareholders will receive 0.3840 shares of Quintiles common stock for each share of IMS common stock. Upon completion of the merger, the Company’s shareholders will own approximately 51.4 percent of the shares of the combined company on a fully diluted basis and Quintiles shareholders will own approximately 48.6 percent of the combined company on a fully diluted basis. The transaction is subject to customary closing conditions, including regulatory approvals and approval by both IMS and Quintiles shareholders, and is expected to close early in the fourth quarter of 2016.

Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies certain aspects of accounting for share-based payments to employees, including the requirement for companies to recognize the income tax effects of awards in the income statement when the awards vest or are settled. Additionally, companies can elect to estimate forfeitures or recognize when they occur. The guidance is effective for the Company’s interim and annual periods beginning January 1, 2017. Earlier adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2014, the FASB issued revised guidance on the recognition of revenue from contracts with customers. The guidance provides that revenue should be recognized for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires enhanced disclosures. In August 2015, the FASB delayed the effective date of the guidance. In March 2016, the FASB issued further guidance on assessing whether an entity is a principal or an agent in a revenue transaction, which impacts whether an entity reports revenue on a

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

gross or net basis. Additionally, in 2016, the FASB issued implementation guidance for the revenue standard, including guidance on identifying performance obligations. These revenue standards are effective for the Company’s inte rim and annual periods beginning January 1, 2018. Earlier adoption is permitted. The Company is currently evaluating the impact of these standards on its consolidated financial statements, as well as the method of transition it will use in adopting the new standards.

In February 2016, the FASB issued updated guidance on leases. The guidance requires a lessee to recognize a right-of-use asset and a lease liability on the statement of financial position for all leases with terms more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The guidance is effective for the Company’s interim and annual periods beginning January 1, 2019. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach, which requires application of the new guidance at the beginning of the earliest comparative period presented . The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

In May 2015, the FASB updated the accounting standards related to fair value measurement for investments that are measured at net asset value. The update eliminates the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share as a practical expedient. Adoption of this guidance on January 1, 2016 only impacts disclosures related to certain assets held by its pension plans and did not impact the Company’s consolidated financial results.

In April 2015, the FASB issued guidance to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Under the new guidance, if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquis ition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. Adoption of this guidance on January 1, 2016, which is applied prospectively, did not have a material impact on our consolidated financial statements.

Note 2. Acquisitions

The Company makes acquisitions to enhance its capabilities and offerings in certain areas, including technology services.

The Company completed five unrelated individually immaterial acquisitions during the first six months of 2016, one of which occurred in the second quarter of 2016. These acquisitions expanded the Company’s existing capabilities in technology services offerings, and to a lesser degree, information offerings. The purchase price allocations for these acquisitions will be finalized after the completion of the valuation of certain intangible assets and any adjustments to the preliminary purchase price allocation are not expected to have a material impact on the Company’s results of operations. The Condensed Consolidated Financial Statements include the results of the acquisitions subsequent to closing. As these acquisitions were immaterial to the Company’s operating results both individually and in the aggregate, pro forma results of operations are not provided. The following table provides certain financial information for these acquisitions, including the preliminary allocation of the aggregate purchase price to certain tangible and intangible assets acquired and goodwill.

	Amortization	June 30,
(in millions)	Period	2016
Total cost of acquisitions, net of cash acquired		$	281
Acquisition-related costs			4

Amounts recorded in the Condensed Consolidated Statements of Financial Position:
Goodwill		$	217
Portion of goodwill deductible for tax purposes			—
Computer software	5-10 years		21
Intangible assets:
Client relationships	10 years	$	50
Databases	5 years		28
Trade names	10 years		4
Total intangible assets		$	82

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

During the second quarter of 2016, the Company recorded an adjustment to its preliminary purchase price allocation as well as related deferred tax effects, which reduced the amount allocated to client relationships by $17 million for an acquisition that occurred in the first quarter of 2016.

Goodwill is attributable to the value of the synergies between the acquired companies and IMS Health.

Cegedim Acquisition

In April 2015, the Company completed the acquisition of certain customer relationship management (“CRM”) and strategic data businesses of Cegedim, SA (“Cegedim” and the “Cegedim acquisition”). Cegedim is a global technology and services company specializing in healthcare whose offerings help pharmaceutical companies manage their sales and marketing operations.

The following pro forma information presents the financial results as if the acquisition of Cegedim had occurred on January 1, 2014, with pro forma adjustments to give effect to an increase in Selling and administrative expenses in 2014 for acquisition-related costs, additional depreciation and amortization for fair value adjustments of property, plant and equipment and intangible assets, an increase in interest expense from acquisition financing, and related tax effects. The pro forma results do not include any anticipated cost synergies, costs or other effects of the planned integration of Cegedim. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred for the period presented below had the Cegedim acquisition been completed on January 1, 2014, nor are they indicative of the future operating results of the Company.

	Six Months Ended June 30, 2015
(in millions)	Six Months Ended June 30, 2015
Revenues	$	1,492
Net income		346
Basic earnings per share		1.04
Diluted earnings per share		1.01

Contingent Consideration

Under the terms of certain acquisition-related purchase agreements, the Company may be required to pay additional amounts as contingent consideration based on the achievement of certain financial performance related metrics, ranging from $0 to $37 million through 2018. The Company’s contingent consideration recorded on the balance sheet was approximately $22 million and $28 million at June 30, 2016 and December 31, 2015, respectively. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy (see Note 5) and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends. Changes in the fair value estimates are included in Selling and administrative expenses.

Note 3. Goodwill

The following table sets forth changes in the Company’s goodwill for the six months ended June 30, 2016.

(in millions)	Goodwill
Balance at December 31, 2015	$	3,604
Goodwill assigned in purchase price allocations (see Note 2)		217
Foreign currency translation adjustments and other		96
Balance at June 30, 2016	$	3,917

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

Note 4. Severance, Impairment and Other Charges

As a result of ongoing cost reduction efforts, the Company recorded severance charges consisting of global workforce reductions to streamline its organization. The following table sets forth the activity in the Company’s severance-related reserves for the six months ended June 30, 2016:

(in millions)	2016 Plan ⁽¹⁾			2015 Plan ⁽²⁾
Balance, December 31, 2015	$	—		$	51
Charges		65			—
Cash payments		(5	)		(28	)
Foreign exchange and other		(1	)		1
Balance, June 30, 2016	$	59		$	24

⁽¹⁾

In the first quarter of 2016, the Company implemented a restructuring plan (the “2016 Plan”) and recorded a pre-tax severance charge of $15 million. In the second quarter of 2016, the Company recorded an additional pre-tax severance charge of $50 million. The second quarter charge primarily resulted from the elimination of redundant roles in conjunction with the integration of Cegedim. The Company expects that cash outlays related to the 2016 Plan will be substantially complete by the end of 2018.

⁽²⁾

In the first quarter of 2015, the Company implemented a restructuring plan (the “2015 Plan”) and recorded a pre-tax severance charge of $12 million. In the second quarter of 2015, the Company recorded an additional pre-tax severance charge of $15 million. An additional $49 million was recorded over the remainder of 2015. The Company expects that cash outlays related to the 2015 Plan will be substantially complete by the end of 2017.

Other charges

During the six months ended June 30, 2016, the Company recorded impairment charges of $2 million, the majority of which related to impaired leases for properties.

During the six months ended June 30, 2015, the Company recorded impairment charges of $7 million, $6 million of which was recorded in the second quarter of 2015. The $7 million charge is primarily comprised of the write-off of the value of computer software that was no longer in use and contract-related charges for which the Company will not realize any future economic benefits.

Note 5. Derivatives and Fair Value

Foreign Exchange Risk Management

The Company transacts business in more than 100 countries and is subject to risks associated with fluctuating foreign exchange rates. The Company’s objective is to reduce earnings and cash flow volatility associated with foreign exchange rate movements. Accordingly, the Company enters into foreign currency forward contracts to minimize the impact of foreign exchange movements on non–functional currency assets and liabilities and to hedge non-U.S. Dollar anticipated royalties (“Royalty Hedging”). It is the Company’s policy to enter into foreign currency transactions only to the extent necessary to meet its objectives as stated above. The Company does not enter into foreign currency transactions for investment or speculative purposes. The principal currencies hedged are the Euro, the Japanese Yen, the Swiss Franc and the Canadian Dollar.

The forward contracts entered into for balance sheet risk management purposes are not designated as hedges and are carried at fair value, with changes in the fair value recorded to Other income (loss), net in the Condensed Consolidated Statements of Comprehensive Income. These contracts do not subject the Company to material balance sheet risk because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged.

The forward contracts entered into for Royalty Hedging purposes are designated as hedges and are carried at fair value, with changes in the fair value recorded to Accumulated Other Comprehensive Income (Loss) (“AOCI”). The change in fair value is reclassified from AOCI to earnings in the quarter in which the hedged royalty is paid. These contracts have various expiration dates through September 2016.

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

The following table details the components of foreign exchange gain (loss) included in Other income (loss), n et on the Condensed Consolidated Statements of Comprehensive Income:

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2016			2015			2016			2015
Revaluation of other non-functional currency assets and liabilities ⁽¹⁾		4			(3	)		(3	)		(3	)
Effect of derivatives		(6	)		9			(3	)		13
Total foreign exchange gain (loss)	$	(2	)	$	6		$	(6	)	$	10

⁽¹⁾

The three months ended June 30, 2016 included a charge of $1 million related to the remeasurement of the Company’s Venezuelan Bolívar account balances. The six months ended June 30, 2016 and 2015 included charges of $2 million and $7 million, respectively, also related to the remeasurement of the Company’s Venezuelan Bolívar account balances.

Net Investment Risk Management

The Company designates its foreign currency denominated debt as a hedge of its net investment in foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the U.S. Dollar. As of June 30, 2016, these borrowings (net of original issue discount) were €1,120 million ($1,244 million). The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in the cumulative translation adjustment component of AOCI with the related offset in long-term debt. Those amounts would be reclassified from AOCI to earnings upon the sale or substantial liquidation of these net investments. The amount of foreign exchange gains (losses) related to the net investment hedge included in cumulative translation adjustment were $32 million and $(50) million for the three months ended June 30, 2016 and 2015, respectively, and $(20) million and $72 million for the six months ended June 30, 2016 and 2015, respectively.

Interest Rate Risk Management

The Company purchases interest rate caps and has entered into interest rate swap agreements for purposes of managing its risk in interest rate fluctuations.

In 2014, the Company purchased U.S. Dollar denominated interest rate caps (“2014 Caps”) at strike rates ranging between 2% and 3%. These caps expire at various times between April 2017 and April 2019 and are designated as cash flow hedges.

The Company also entered into U.S. Dollar and Euro denominated interest rate swap agreements in 2014 (“2014 Swaps”) to hedge interest rate exposure on its borrowings. The 2014 swaps expire at various times from March 2017 through March 2021. On these agreements, the Company pays a fixed rate ranging from 1.4% to 2.1% and receives a variable rate of interest equal to the greater of three-month U.S. Dollar London Interbank Offered Rate (“LIBOR”) or three-month Euro Interbank Offered Rate (“EURIBOR”), and 1%. The 2014 Swaps are designated as cash flow hedges. The Company also entered into interest rate swap agreements in 2010 (“2010 Swaps”) to hedge interest rate exposure on its borrowings. The 2010 Swaps expired at various times through January 2016. On these agreements, the Company paid a fixed rate ranging from 3% to 3.3% and received a variable rate of interest equal to the three-month LIBOR. The 2010 Swaps were not designated as cash flow hedges.

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

The fair values of derivative instruments in the Condensed Consolidated Statements of Financial Position are as follows:



		June 30, 2016						December 31, 2015
		Fair Value of Derivative				U.S. Dollar Notional		Fair Value of Derivative				U.S. Dollar Notional
(in millions)	Balance Sheet Caption	Asset		Liability		U.S. Dollar Notional		Asset		Liability		U.S. Dollar Notional
Derivatives Designated as Hedging Instruments:
Foreign exchange contracts	Accounts receivable/ Accounts payable	$	1	$	11	$	185	$	4	$	2	$	178
Interest rate caps	Non-Current Assets		—		—		1,000		4		—		1,000
Interest rate swaps	See below ⁽¹⁾		—		12		522		—		10		517
Derivatives not Designated as Hedging Instruments:
Foreign exchange contracts	Accounts receivable/ Accounts payable		2		6		213		3		—		148
Interest rate swaps	See below ⁽¹⁾		—		—		—		—		1		100
Total Derivatives		$	3	$	29			$	11	$	13

⁽¹⁾	$12 million included in Other liabilities at June 30, 2016 and $1 million included in Accrued and other current liabilities and $10 million included in Other liabilities at December 31, 2015 in the Condensed Consolidated Statements of Financial Position.

For derivatives designated as hedges, the Company assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives are highly effective in offsetting changes in fair values or cash flows of hedged items. If it is determined that a derivative ceases to be highly effective as a hedge, the Company will discontinue hedge accounting with respect to that derivative prospectively. When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction, and reclassifies gains or losses that were accumulated in AOCI to earnings in Other income (loss), net for foreign exchange derivatives and interest expense for interest rate derivatives on the Condensed Consolidated Statements of Comprehensive Income. Cash flows are classified consistent with the underlying hedged item.

The effects of derivative instruments in cash flow hedging relationships on the Condensed Consolidated Statements of Comprehensive Income are as follows:

(in millions)	Effect of Derivatives on Financial Performance
	Amount of Income/(Loss) Recognized in AOCI						Location of Income/(Loss) Reclassified from AOCI into Earnings	Amount of Income/(Loss) Reclassified from AOCI into Earnings
Three Months Ended June 30,	2016			2015				2016			2015
Foreign exchange contracts	$	(5	)	$	(3	)	Other income (loss), net	$	(3	)	$	7
Interest rate derivatives		(1	)		3		Interest expense		—			—

Six Months Ended June 30,	2016			2015				2016			2015
Foreign exchange contracts	$	(13	)	$	4		Other income (loss), net	$	(1	)	$	13
Interest rate derivatives		(5	)		(1	)	Interest expense		—			—

The pre-tax gain recognized in other income (loss), net for foreign exchange contracts not designated as hedging instruments was $(4) million and $2 million for the three months ended June 30, 2016 and 2015, respectively, and $(3) million and $– million for the six months ended June 30, 2016 and 2015, respectively.

Changes in the fair value of derivatives that are designated as cash flow hedges are recorded in AOCI to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. The Company expects $20 million of pre-tax unrealized losses related to its foreign exchange contracts and interest rate derivatives included in AOCI at June 30, 2016 to be reclassified into earnings within the next twelve months.

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

Fair Value Disclosures

The Company is subject to authoritative guidance which requires a three-level hierarchy for disclosure of fair value measurements as follows:

Level 1 —	Quoted prices in active markets for identical assets or liabilities.

Level 2 —	Quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3 —	Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The carrying values of cash, cash equivalents, restricted cash, accounts receivable and accounts payable approximated their fair values at June 30, 2016 and December 31, 2015 due to the short-term nature of these instruments. At June 30, 2016 and December 31, 2015, the fair value of total debt approximated $4,564 million and $4,229 million, respectively, as determined under Level 2 measurements based on quoted prices for these financial instruments.

Recurring Measurements

The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated:

	Basis of Fair Value Measurements
	June 30, 2016
(in millions)	Level 1		Level 2		Level 3		Total
Assets
Derivatives	$	—	$	3		—	$	3
Total	$	—	$	3	$	—	$	3
Liabilities
Contingent consideration	$	—	$	—	$	22	$	22
Derivatives		—		29		—		29
Total	$	—	$	29	$	22	$	51

	December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets
Derivatives	$	—	$	11	$	—	$	11
Total	$	—	$	11	$	—	$	11
Liabilities
Contingent consideration	$	—	$	—	$	28	$	28
Derivatives		—		13		—		13
Total	$	—	$	13	$	28	$	41

Derivatives consist of foreign exchange contracts and interest rate caps and swaps. The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates. The fair value of the interest rate caps and swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities.

The following table summarizes Level 3 acquisition-related contingent consideration liabilities (see Note 2) carried at fair value on a recurring basis with the use of unobservable inputs for the period indicated.

(in millions)	Contingent Consideration Liabilities
Balance at December 31, 2015	$	28
New acquisitions		2
Cash payments		(6	)
Changes in fair value estimates and foreign currency translation adjustments		(2	)
Balance at June 30, 2016	$	22

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

Note 6. Debt

The following table summarizes the Company’s debt at the dates indicated:

	June 30,			December 31,
(in millions)	2016			2015
Senior Secured Credit Facilities:
Senior Secured Term A Loan due 2019—USD LIBOR at average floating rates of 2.88%	$	763		$	484
Senior Secured Term A Loan due 2019—EUR LIBOR at average floating rates of 2.25%		133			135
Senior Secured Term B Loan due 2021—USD LIBOR at average floating rates of 3.50%		1,708			1,717
Senior Secured Term B Loan due 2021—EUR LIBOR at average floating rates of 3.75%		811			802
Revolving Credit Facility due 2019:
U.S. Dollar denominated borrowings—USD LIBOR at average floating rates of 2.78%		345			328
4.125% Senior Notes due 2023 - Euro denominated		305			300
6.00% Senior Notes due 2020 - U.S. Dollar denominated		500			500
Principal Amount of Debt		4,565			4,266
Less: Debt Issuance Costs and Unamortized Discounts		(66	)		(71	)
Total Debt	$	4,499		$	4,195

Scheduled principal payments due on the Company’s debt as of June 30, 2016 for the remainder of 2016 and thereafter were as follows:

	Year
(in millions)	2016		2017		2018		2019		2020		Thereafter		Total
Debt	$	38	$	94	$	119	$	1,080	$	526	$	2,708	$	4,565

Senior Secured Credit Facilities

In January 2016, IMS Health Incorporated (“IMS Health”), an indirect wholly owned subsidiary of the Company, entered into an amendment (the “2016 Amendment”) to the Third Amended and Restated Credit and Guaranty Agreement, dated as of March 17, 2014, among IMS Health, IMS AG and IMS Japan K.K., as co-borrowers, Healthcare Technology Intermediate Holdings, Inc., Bank of America, N.A. and the other lenders party thereto (as amended by the 2016 Amendment, the “Credit Agreement” and, together with the related security and other documents for the senior secured term loan facilities and the senior secured revolving facility, the “Senior Secured Credit Facilities”). The 2016 Amendment increased outstanding commitments under the Company’s existing Term A loans by $300 million. The proceeds from the additional Term A loans were used for general corporate purposes, including funding acquisitions and repaying existing loans under IMS Health’s senior secured revolving credit facility. As a result of the 2016 Amendment, the Company incurred $2 million of fees; of which $1 million was recorded in Other income (loss), net during the first quarter of 2016 and $1 million will be amortized to interest expense.

At June 30, 2016, the Company had an aggregate $500 million revolving credit facility, of which $155 million was unused.

Note 7. Pension and Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company’s pension benefits.

	Pension Benefits
	U.S. plans						Non-U.S. plans						U.S. plans						Non-U.S. plans
	Three Months Ended June 30,												Six Months Ended June 30,
(in millions)	2016			2015			2016			2015			2016			2015			2016			2015
Service cost	$	3		$	3		$	2		$	2		$	6		$	6		$	4		$	4
Interest cost		3			3			2			3			6			6			4			5
Expected return on plan assets		(6	)		(5	)		(3	)		(3	)		(12	)		(11	)		(6	)		(6	)
Net periodic benefit cost	$	—		$	1		$	1		$	2		$	—		$	1		$	2		$	3

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

The Company’s net periodic benefit credit for its postretirement benefits was less than $1 million for the three and six months ended June 30, 2016 and 2015, respectively. During the six months ended June 30, 2016, the Company contributed approximately $9 million to its pension and postretirement benefit plans and expects to contribute an additional $3 million for the remainder of 2016.

Note 8. Stockholders’ Equity

Share Repurchase

On December 16, 2015, the Company’s board of directors approved a $250 million common stock repurchase authorization. Through December 31, 2015, the Company had purchased 670 thousand shares of its common stock having an aggregate value of approximately $17 million at an average price of $25.70 per share. In the second quarter of 2016, the Company purchased 1 million shares of its common stock having an aggregate value of approximately $25 million at an average price of $25.42 per share. These share repurchases were funded through a combination of cash and borrowings under the Company’s revolving credit facility. The repurchase authorization does not have a specified expiration date and can be modified, suspended or discontinued at any time. As of June 30, 2016, approximately $207 million is available to purchase shares under the December 2015 authorization.

On May 3, 2015, the Company’s board of directors authorized a $300 million common stock repurchase program. In connection with that program, on May 12, 2015, the Company purchased 11.1 million shares of its common stock from the underwriters of the Secondary Offering (as defined below) having an aggregate value of approximately $300 million at $27.0875 per share, equal to the midpoint between the public offering price and the price paid by the underwriters to the Selling Stockholders (as defined below) for the shares sold in the Secondary Offering. The share repurchase was funded through a combination of available cash, borrowings from its revolving credit facility and additional term loans under its Senior Secured Credit Facilities.

Secondary Offering

On May 12, 2015, existing shareholders of the Company (collectively, the “Selling Stockholders”) completed the sale of 57.97 million shares of the Company’s common stock at a public offering price of $27.50 per share, including 6.87 million shares that were offered and sold by the Selling Stockholders pursuant to the full exercise of the underwriter’s option to purchase additional shares. These transactions are collectively referred to as the “Secondary Offering.” The Company did not sell any stock in, or receive any proceeds from, the Secondary Offering. The Company incurred $1 million of expenses in the second quarter of 2015 related to the Secondary Offering, which were included in Selling and administrative expenses.

Note 9. Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the components of AOCI, net of tax, for the periods indicated:

(in millions)	Cumulative Translation Adjustment			Unrealized Gains (Losses) on Derivative Instruments			Unamortized Pension and Other Benefits Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2015	$	(287	)	$	(15	)	$	(48	)	$	(350	)
Other comprehensive income (loss) before reclassifications		131			(11	)		—			120
Amounts reclassified into earnings		—			—			—			—
Other comprehensive income (loss)		131			(11	)		—			120
Balance, June 30, 2016	$	(156	)	$	(26	)	$	(48	)	$	(230	)

(in millions)	Cumulative Translation Adjustment			Unrealized Gains (Losses) on Derivative Instruments			Unamortized Pension and Other Benefits Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2014	$	(169	)	$	(1	)	$	(47	)	$	(217	)
Other comprehensive income (loss) before reclassifications		(54	)		1			—			(53	)
Amounts reclassified into earnings		—			(8	)		—			(8	)
Other comprehensive income (loss)		(54	)		(7	)		—			(61	)
Balance, June 30, 2015	$	(223	)	$	(8	)	$	(47	)	$	(278	)

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

Note 10. Income Taxes

The Company operates in more than 100 countries around the world and its earnings are taxed at the applicable income tax rate in each of these countries. As required, the Company computes interim taxes based on an estimated annual effective tax rate.

The Company recorded a provision for income taxes of $7 million and $27 million for the three and six months ended June 30, 2016, respectively. The tax expense in both periods was favorably impacted as a result of profits generated in non-U.S. tax jurisdictions with lower tax rates than the U.S. statutory tax rate.

The Company recorded a provision for income taxes of $13 million and a benefit from income taxes of $227 million for the three and six months ended June 30, 2015, respectively. The tax expense in the three months ended June 30, 2015 was favorably impacted as a result of profits generated in non-U.S. tax jurisdictions with lower tax rates than the U.S. statutory tax rate. Historically, the Company provided deferred taxes with respect to all of the unremitted earnings of its non-U.S. subsidiaries. The tax benefit for the six months ended June 30, 2015 was favorably impacted as the Company began asserting as of the beginning of 2015, with certain exceptions, that the unremitted earnings of its non-U.S. subsidiaries will be indefinitely reinvested. As a result of this change in assertion, the Company reversed a previously established deferred tax liability of $256 million as a discrete benefit in the first quarter of 2015.

Note 11. Contingencies

The Company and its subsidiaries are involved in legal and tax proceedings, claims and litigation arising in the ordinary course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded reserves in the Condensed Consolidated Financial Statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. However, even in many instances where the Company has recorded an estimated liability, the Company is unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect the Company’s results of operations, financial position or cash flows. As additional information becomes available, the Company adjusts its assessments and estimates of such liabilities accordingly.

The Company routinely enters into agreements with its suppliers to acquire data and with its clients to sell data, all in the normal course of business. In these agreements, the Company sometimes agrees to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims related to the use of the data. The Company has not accrued a liability with respect to these matters, as the exposure is considered remote.

Based on its review of the latest information available, management does not expect the impact of pending legal and tax proceedings, claims and litigation, either individually or in the aggregate, to have a material adverse effect on the Company’s results of operations, cash flows or financial position. However, one or more unfavorable outcomes in any claim or litigation against the Company could have a material adverse effect for the period in which it is resolved. The following is a summary of certain legal matters involving the Company.

IMS Health Government Solutions Voluntary Disclosure Program Participation

The Company’s wholly-owned subsidiary, IMS Government Solutions Inc. (“IMS Government Solutions”), is primarily engaged in providing services and products under contracts with the U.S. government. U.S. government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the U.S. government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. U.S. government investigations, whether relating to these contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and may result in no adverse action against the Company.

IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract (the “GSA Contract”) which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). The potential noncompliance arose from three primary areas: first, at the direction of the government, work performed under one task order was invoiced under

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

another task order without the appropriate modifications to the orders being made; second, personnel who did not meet strict compliance with the labor categories component of the qualification requirements of the GSA Contract were assigned to contracts; and third, certain discounts that were given to commercial customers were not also offered to the government, in alleged violation of the GSA Contract’s Price Reductions Clause. Upon discovery of the potential noncompliance, the Company bega n remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and was accepted into the Department of Defense Voluntary Disclosure Program. The Company filed its Voluntary Disclosure Program Report (“Disclosure Report”) on A ugust 29, 2008. Based on the Company’s findings as disclosed in the Disclosure Report, the Company recorded a reserve of approximately $4 million for this matter in 2008. During 2010, the Company recorded an additional reserve of approximately $2 million a s a result of its ongoing investigation relating to this matter. In September 2014, the General Services Administration offered to settle the third matter described above (i.e., the Price Reductions Clause aspect of the Disclosure Report) for $1.5 million, in-line with the amount the Company had recorded for this area of potential noncompliance. On April 23, 2015, the Company and the government executed the settlement agreement and made the $1.5 million payment. The Company is currently unable to determine the outcome of the remaining matters pending the resolution of the Voluntary Disclosure Program process and its ultimate liability arising from these matters could exceed its current reserves.

Symphony Health Solutions Litigation

On July 24, 2013, Symphony Health Solutions and two of its subsidiaries (collectively “Symphony”) filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against IMS Health alleging anticompetitive business practices in violation of the Sherman Antitrust Act and Pennsylvania State law. IMS Health asserted various counterclaims in that lawsuit. On December 20, 2013, IMS Health filed a lawsuit in the U.S. District Court for the District of Delaware against Symphony for infringement of three patents seeking injunctive relief and damages. In late 2015, the Company and Symphony entered into a settlement agreement whereby each of the parties agreed to terminate their respective lawsuits, and these lawsuits were dismissed with prejudice in January, 2016.

Note 12. Operations by Business Segment

Operating segments are defined as components of an enterprise about which financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision-making groups, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company operates a globally consistent business model, offering clients in the healthcare industry with comprehensive solutions to measure and improve their performance.

The Company maintains regional geographic management who are responsible for bringing the Company’s full suite of offerings to their respective markets and to facilitate local execution of its global strategies. However, the Company maintains global leaders for the majority of its critical business processes; and the most significant performance evaluations and resource allocations made by the Company’s chief operating decision maker is made on a global basis. As such, the Company has concluded that it maintains one operating and reportable segment.

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

Geographic Financial Information:

The following represents selected geographic information for the regions in which the Company operates.

(in millions)	Americas ⁽¹⁾		EMEA ⁽²⁾		Asia Pacific ⁽³⁾		Corporate & Other			Total
Three Months Ended June 30,
2016
Revenue ⁽⁴⁾	$	375	$	313	$	114	$	—		$	802
Operating income (loss) ⁽⁵⁾		50		71		31		(73	)		79
2015
Revenue ⁽⁴⁾	$	330	$	302	$	110	$	—		$	742
Operating income (loss) ⁽⁵⁾		44		61		30		(39	)		96

Six Months Ended June 30,
2016
Revenue ⁽⁴⁾	$	728	$	620	$	228	$	—		$	1,576
Operating income (loss) ⁽⁵⁾		95		137		66		(106	)		192

2015
Revenue ⁽⁴⁾	$	623	$	534	$	217	$	—		$	1,374
Operating income (loss) ⁽⁵⁾		111		119		69		(112	)		187

The Company periodically reviews and makes changes to its geographic reporting classifications. As a result of these changes, prior years’ geographic financial information was reclassified to conform to the current year presentation. The reclassifications did not change previously reported condensed consolidated results of operations.

⁽¹⁾	Americas includes the United States, Canada and Latin America. Revenue in the United States was $325 million and $278 million for the three months ended June 30, 2016 and 2015, respectively, and $630 million and $523 million for the six months ended June 30, 2016 and 2015, respectively.

⁽²⁾	EMEA includes countries in Europe, the Middle East and Africa, and the countries of India, Sri Lanka and Bangladesh.

⁽³⁾

Asia Pacific includes Japan, Australia and other countries in the Asia Pacific region, excluding India, Sri Lanka and Bangladesh. Revenue in Japan was $61 million and $59 million for the three months ended June 30, 2016 and 2015, respectively, and $125 million and $123 million for the six months ended June 30, 2016 and 2015, respectively.

⁽⁴⁾	Revenue relates to external clients and is primarily based on the location of the client. Revenue for the geographic regions includes the impact of foreign exchange in converting results into U.S. Dollars.

⁽⁵⁾

Operating income (loss) for the three geographic regions does not reflect the allocation of certain expenses that are maintained in Corporate and Other and as such, is not a true measure of the respective regions’ profitability. The Operating income (loss) amounts for the geographic regions include the impact of foreign exchange in converting results into U.S. dollars. The following presents the depreciation and amortization expense for certain intangible assets recorded in connection with a merger transaction completed in 2010 by region that are included in Corporate and Other:

(in millions)	Americas		EMEA		Asia Pacific
Three Months Ended June 30,
2016	$	19	$	4	$	6
2015		19		4		5
Six Months Ended June 30,
2016		37		8		12
2015		46		18		13

Note 13. Earnings per Share

Basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed, when the result is dilutive, using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of employee stock options and restricted stock units.

Employee stock options, restricted stock units and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include restricted stock units and the dilutive effect of in-the-money options which is calculated based on the average share price for each fiscal period using the treasury

IMS HEALTH HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements - Continued

(unaudited)

stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recogni zed, and the amount of benefits that would be recorded in additional paid-in capital when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

The following table presents the composition of basic and diluted weighted average shares outstanding:

	Three Months Ended June 30,				Six Months Ended June 30,
(Shares in millions)	2016		2015		2016		2015
Basic weighted-average common shares outstanding		328.8		331.6		328.7		333.6
Effect of dilutive stock-based awards		6.7		8.4		6.9		9.0
Diluted weighted-average common shares outstanding		335.5		340.0		335.6		342.6

Shares excluded from computation of diluted earnings per share:
Weighted average potential common shares excluded from computation due to anti-dilutive effect		4.1		—		3.7		—

I tem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements (unaudited) and related notes and with the audited Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. This discussion and analysis includes forward-looking statements that involve risks and uncertainties. You should read the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2015 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The terms “Company,” “IMS,” “we,” “our” or “us,” as used herein, refer to IMS Health Holdings, Inc. and its consolidated subsidiaries unless otherwise stated or indicated by context. Amounts presented may not add due to rounding.

Background

We are a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. We have one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media. We standardize, organize, structure and integrate this data by applying our sophisticated analytics and leveraging our global technology infrastructure to help our clients run their organizations more efficiently and make better decisions to improve their operational and financial performance. We have a presence in over 100 countries and we generated 61% of our 2015 revenue from outside the United States.

We serve key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. Our information and technology services offerings, which we have developed with significant investment over our 60+ year history, are deeply integrated into our clients’ workflow.

Proposed Merger

On May 3, 2016, IMS and Quintiles Transnational Holdings Inc. (“Quintiles”) entered into a definitive merger agreement, pursuant to which the companies will be combined. The merged company will be renamed Quintiles IMS Holdings, Inc. Under the terms of the merger agreement, our shareholders will receive 0.3840 shares of Quintiles common stock for each share of IMS common stock. Upon completion of the merger, our shareholders will own approximately 51.4 percent of the shares of the combined company on a fully diluted basis and Quintiles shareholders will own approximately 48.6 percent of the combined company on a fully diluted basis. The transaction is subject to customary closing conditions, including regulatory approvals and approval by both our and Quintiles shareholders, and is expected to close early in the fourth quarter of 2016.

Acquisitions

We make acquisitions to enhance our capabilities and offerings in certain areas, including technology services.

During the six months ended June 30, 2016, we completed five unrelated individually immaterial acquisitions, one of which occurred in the second quarter of 2016. The total cost of these acquisitions, net of cash acquired, was approximately $281 million. The purchase price allocations for these acquisitions will be finalized after the completion of the valuation of certain intangible assets and any adjustments to the preliminary purchase price allocations are not expected to have a material impact on our results of operations. The results of operations of the acquired businesses have been included in our consolidated results of operations since the date of their acquisition and were not significant to our condensed consolidated results of operations.

On April 1, 2015, we completed the acquisition of certain customer relationship management and strategic data businesses of Cegedim, SA (“Cegedim” and the “Cegedim acquisition”) for a total purchase price, after a working capital adjustment, of approximately $445 million.

See Note 2 to our Condensed Consolidated Financial Statements for additional information with respect to these acquisitions.

Results excluding the Effects of Foreign Currency Translation and Certain Charges

We report results in U.S. Dollars, but we do business on a global basis. Exchange rate fluctuations affect the U.S. Dollar value of foreign currency revenue and expenses and may have a significant effect on our results. The discussion of our financial results in this report includes comparisons with the prior year in constant currency terms, using consistent exchange rates. We believe this

information facilitates comparison of the underlying results over time. During the three months ended June 30, 2016, the U.S. Dollar was generally stronger against the other currencies in which we transact business as compared to the three months ended June 30, 2015, except for the Euro and Japanese Yen. During the first six months of 2016, the U.S. Dollar was generally stronger against the other currencies in which we transact business as compared to the f irst six months of 2015, except for the Japanese Yen. The revenue growth at actual currency rates was lower than the growth at constant currency exchange rates during the three and six months ended June 30, 2016. See “—How Exchange Rates Affect our Results ” and “—Quantitative and Qualitative Disclosures about Market Risk” below for a more complete discussion regarding the impact of foreign currency translation on our business.

We also discuss below our revenue, operating income, operating costs of information, direct and incremental costs of technology services, selling and administrative expenses and operating margins excluding stock-based compensation related charges, acquisition-related charges, restructuring and related charges, secondary offering expenses and purchase accounting adjustments as a supplement to our results presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We believe providing these non-GAAP measures is useful as it facilitates comparisons across the periods presented and more clearly indicates trends. Management uses these non-GAAP measures in its global decision making, including developing budgets and managing expenditures.

Results of Operations

Summary of Results

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2016			2015			2016			2015
Revenue	$	802		$	742		$	1,576		$	1,374
Information		383			374			759			728
Technology services		419			368			817			646
Operating costs of information, exclusive of depreciation and amortization		175			169			335			326
Direct and incremental costs of technology services, exclusive of depreciation and amortization		240			195			462			333
Selling and administrative expenses, exclusive of depreciation and amortization		168			180			345			317
Depreciation and amortization		88			81			175			177
Severance, impairment and other charges		52			21			67			34
Operating Income		79			96			192			187
Interest income		1			1			2			1
Interest expense		(47	)		(43	)		(93	)		(80	)
Other income (loss), net		(2	)		6			(7	)		10
Non-Operating Loss, Net		(48	)		(36	)		(98	)		(69	)
Income before income taxes		31			60			94			118
(Provision for) benefit from income taxes		(7	)		(13	)		(27	)		227
Net Income	$	24		$	47		$	67		$	345

Net Income (Loss) to Adjusted EBITDA Reconciliation

We have included a presentation of Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) because we believe it provides additional information regarding our performance and our ability to service our debt. In addition, management believes that Adjusted EBITDA is useful to facilitate operating performance comparisons from period to period by excluding certain non-cash items, such as the impact of depreciation and amortization and the impact of stock-based compensation related charges, and certain variable charges, such as acquisition-related expenses, restructuring charges and secondary offering expenses. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we also use this metric for business planning purposes and in evaluating business opportunities. In addition, management believes Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other parties in evaluating peer companies as a measure of financial performance and debt-service capabilities.

Adjusted EBITDA is not presented in accordance with U.S. GAAP, and our computation of Adjusted EBITDA may vary from those used by other companies. In evaluating Adjusted EBITDA, you should be aware that in the future we will likely incur expenses similar to some of the adjustments in this presentation. The presentation of Adjusted EBITDA should not be construed as indicating that our future results will be unaffected by these expenses or by any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to net income or loss, operating income or loss, cash flows from operating activities or any other measures

of operating performance, liquidity or indebtedness derived in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and it sh ould not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2016			2015			2016			2015
Net Income	$	24		$	47		$	67		$	345
Provision for (benefit from) income taxes		7			13			27			(227	)
Other (income) loss, net		2			(6	)		7			(10	)
Interest expense		47			43			93			80
Interest income		(1	)		(1	)		(2	)		(1	)
Depreciation and amortization		88			81			175			177
Deferred revenue purchase accounting adjustments		2			2			3			3
Stock-based compensation related charges ⁽¹⁾		8			8			15			14
Restructuring and related charges ⁽²⁾		51			21			67			35
Merger and acquisition-related charges ⁽³⁾		10			11			22			19
Secondary offering expenses		—			1			—			1
Adjusted EBITDA	$	238		$	220		$	474		$	436

⁽¹⁾	Stock-based compensation related charges are included in Operating costs of information, Direct and incremental costs of technology services and Selling and administrative expenses as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2016		2015		2016		2015
Operating costs of information, exclusive of depreciation and amortization	$	2	$	—	$	3	$	1
Direct and incremental costs of technology services, exclusive of depreciation and amortization		—		1		1		1
Selling and administrative expenses, exclusive of depreciation and amortization		6		7		11		12

⁽²⁾

Restructuring and related charges includes severance and impairment charges and the cost of employee and third-party charges related to dual running costs for knowledge transfer activities. Dual running costs for knowledge transfer activities of less than $1 million for both the three months ended June 30, 2016 and 2015 and less than $1 million and $1 million for the six months ended June 30, 2016 and 2015, respectively, are included primarily in Operating costs of information and Selling and administrative expenses.

⁽³⁾	Merger and acquisition-related charges are included primarily in Selling and administrative expenses.

Revenue

Total revenue increased 8.1% to $802 million for the three months ended June 30, 2016 compared to $742 million in the same quarter in the prior year, and grew 8.4% on a constant currency basis, as the U.S. Dollar strengthened against most other currencies in which we transact business. Revenue from our information offerings increased 2.5% in the second quarter of 2016 and grew 2.6% on a constant currency basis over the same period. Revenue from our technology services offerings increased 13.8% in the second quarter of 2016 and grew 14.3% on a constant currency basis over the same quarter in the prior year. The constant currency increase in information offerings revenue primarily resulted from growth in the United States, partially offset by lower revenues in the Asia Pacific region. The constant currency increase in technology services revenue primarily resulted from the acquisition of AlphaImpactRx, a U.S.-based provider of primary market research solutions acquired in January 2016, and growth in technology and applications and work flow analytics offerings, led by the United States and EMEA (Europe, the Middle East, Africa, India, Sri Lanka and Bangladesh).

Total revenue increased 14.7% to $1,576 million for the six months ended June 30, 2016 compared to $1,374 million in the same period in the prior year, and grew 16.1% on a constant currency basis, as the U.S. Dollar strengthened against most other currencies in which we transact business. Revenue from our information offerings increased 4.2% in the first six months of 2016 and grew 5.7% on a constant currency basis over the same period. Revenue from our technology services offerings increased 26.6% in the first six months of 2016 and grew 27.8% on a constant currency basis over the same period in the prior year. The constant currency increase in information offerings revenue primarily resulted from the Cegedim acquisition, which closed on April 1, 2015. The constant currency increase in technology services revenue primarily resulted from the Cegedim acquisition; the acquisition of AlphaImpactRx; and growth in technology and applications and work flow analytics offerings, led by the United States and EMEA.

Operating Costs of Information, exclusive of Depreciation and Amortization

Operating costs of information offerings increased $6 million, or 3.0%, in the three months ended June 30, 2016 compared to the same quarter in the prior year. Excluding the favorable effect of foreign currency translation of $1 million, as well as stock-based compensation related charges, restructuring and related charges and acquisition-related charges, operating costs of information

increased 3.3% in the second quarter of 2016 compared to the second quarter of 2015. The constant currency increase in operating costs of information was primarily due to an increase in data costs, partially offset by lower third-party service provider fees of approximately $4 million .

Operating costs of information offerings increased $9 million, or 2.8%, in the six months ended June 30, 2016 compared to the same period in the prior year. Excluding the favorable effect of foreign currency translation of $6 million, as well as stock-based compensation related charges, restructuring and related charges and acquisition-related charges, operating costs of information increased 4.2% in the first six months of 2016 compared to the first six months of 2015. The constant currency increase in operating costs of information was primarily due to an increase in data costs.

Direct and Incremental Costs of Technology Services, exclusive of Depreciation and Amortization

Direct and incremental costs of technology services offerings grew $45 million, or 22.5%, in the three months ended June 30, 2016 compared to the same quarter in the prior year. Excluding the favorable effect of foreign currency translation of less than $1 million, stock-based compensation related charges, restructuring and related charges and acquisition-related charges, direct and incremental costs of technology services grew 22.7% in the second quarter of 2016 compared to the second quarter of 2015. The constant currency increase in direct and incremental costs of technology services was driven primarily by increased compensation costs of approximately $17 million in part due to the AlphaImpactRx acquisition and to support the growth in our technology services offerings. Additionally, increases in third-party service provider fees of approximately $8 million and data costs directly related to technology services, both in part due to the AlphaImpactRx acquisition, contributed to the growth as compared to the second quarter of 2015.

Direct and incremental costs of technology services offerings increased $129 million, or 38.6%, in the six months ended June 30, 2016 compared to the same period in the prior year. Excluding the favorable effect of foreign currency translation of $6 million, as well as stock-based compensation related charges, restructuring and related charges and acquisition-related charges, direct and incremental costs of technology services grew 40.4% in the first six months of 2016 compared to the first six months of 2015. The constant currency increase in direct and incremental costs of technology services was driven primarily by increased compensation costs of $62 million, largely due to the Cegedim and AlphaImpactRx acquisitions and to support the growth in our technology services offerings. Additionally, increases in third-party service provider fees of approximately $24 million, data costs directly related to technology services, and infrastructure expense of $8 million, all in part due to the Cegedim acquisition, contributed to the growth as compared to the first six months of 2015.

Selling and Administrative Expenses, exclusive of Depreciation and Amortization

Selling and administrative expenses decreased $12 million, or 5.6%, in the three months ended June 30, 2016 compared to the same quarter in the prior year. Excluding the favorable effect of foreign currency translation of $3 million, as well as stock-based compensation related charges, restructuring and related charges, acquisition-related charges and secondary offering expenses, selling and administrative expenses decreased 1.9% in the second quarter of 2016 compared to second quarter of 2015. Selling and administrative expenses in constant currency reflected lower compensation expense.

Selling and administrative expenses increased $28 million, or 8.9%, in the six months ended June 30, 2016 compared to the same period in the prior year. Excluding the favorable effect of foreign currency translation of $9 million, as well as stock-based compensation related charges, restructuring and related charges, acquisition-related charges and secondary offering expenses, selling and administrative expenses grew 13.5% in the first six months of 2016 compared to first six months of 2015. Selling and administrative expenses in constant currency reflected higher compensation expense and higher occupancy expense of approximately $9 million compared to the first six months of 2015, both of which were largely due to the Cegedim acquisition.

Depreciation and Amortization

Depreciation and amortization expense increased $7 million, or 8.5%, in the three months ended June 30, 2016 and decreased $2 million, or 1.1%, in the six months ended June 30, 2016 as compared to the respective prior year periods. The increase for the second quarter was primarily due to additional depreciation and amortization expense related to the acquisitions occurring since June 2015. The decrease for the year to date period was primarily due to certain intangible assets recorded in connection with a merger transaction completed in 2010 that became fully amortized during the first quarter of 2015, partially offset by additional depreciation and amortization expense related to the acquisitions occurring over the last year, including Cegedim.

Severance, Impairment and Other Charges

Severance, impairment and other charges for the three months ended June 30, 2016 and 2015 were primarily comprised of severance. See Severance, Impairment and Other Charges below for further information.

Operating Income (Loss)

Operating income was $79 million in the three months ended June 30, 2016, a decrease of $17 million compared to the same quarter in the prior year. Operating income for the second quarter of 2016 decreased $20 million in constant currency terms compared to the second quarter of 2015. Absent the impact of stock-based compensation related charges, acquisition-related charges, restructuring and related charges, purchase accounting adjustments and secondary offering expenses, operating income increased 12.8% at reported foreign currency rates and increased 9.7% on a constant currency basis for the second quarter of 2016. The increase in operating income on a constant currency basis was a result of higher revenues, partially offset by increases in operating expenses to support the revenue growth and higher depreciation and amortization expense.

Operating income was $192 million in the six months ended June 30, 2016, an increase of $5 million compared to the same period in the prior year. Operating income for the first six months of 2016 increased $1 million in constant currency terms compared to the first six months of 2015. Absent the impact of stock-based compensation related charges, acquisition-related charges, restructuring and related charges, purchase accounting adjustments and secondary offering expenses, operating income increased 10.8% at reported foreign currency rates and increased 9.3% on a constant currency basis for the first six months of 2016. The increase in operating income on a constant currency basis was a result of higher revenues, partially offset by increases in operating expenses to support the revenue growth.

Trends in Operating Margins

Operating margins decreased to 9.9% for the three months ended June 30, 2016 from 12.9% for the three months ended June 30, 2015. Margins in both periods were negatively impacted by the effects of foreign currency translation, stock-based compensation related charges, acquisition-related charges, restructuring and related charges and purchase accounting adjustments, and secondary offering expenses in 2015. Excluding the effects of foreign currency translation and these charges, operating margins were 22.5% and 22.3% in the second quarter of 2016 and 2015, respectively. The period over period decrease in operating margin was primarily due to the lower profitability of the acquired AlphaImpactRx businesses and the mix of products sold.

Operating margins decreased to 12.2% for the six months ended June 30, 2016 from 13.6% for the six months ended June 30, 2015. Margins in both periods were negatively impacted by the effects of foreign currency translation, stock-based compensation related charges, acquisition-related charges, restructuring and related charges and purchase accounting adjustments, and secondary offering expenses in 2015. Excluding the effects of foreign currency translation and these charges, operating margins were 22.9% and 24.3% in the first six months of 2016 and 2015, respectively. The period over period decrease in operating margin was primarily due to the lower profitability of the acquired Cegedim and AlphaImpactRx businesses and the mix of products sold.

Non-Operating Loss, net

Non-operating loss, net was $48 million in the three months ended June 30, 2016, an increase of $12 million compared to the same quarter in the prior year. Interest expense, net of interest income, was $4 million higher than in the second quarter of 2015 primarily due to increased commitments under our existing Term A loans. The hedge of non-U.S. Dollar anticipated royalties resulted in a $3 million loss in the second quarter of 2016 compared to a $6 million gain in the prior year quarter.

Non-operating loss, net was $98 million in the six months ended June 30, 2016, an increase of $29 million compared to the same period in the prior year. Interest expense, net of interest income, was $12 million higher than in the first six months of 2015 primarily due to the issuance of €275 million senior notes on March 30, 2015 in anticipation of the Cegedim acquisition and increased commitments under our existing Term A loans. The hedge of non-U.S. Dollar anticipated royalties resulted in a $1 million loss in the first six months of 2016 compared to a $13 million gain in the prior year period. Additionally, the impact of all other foreign exchange, including the revaluation and settlement of non-functional currency assets and liabilities, hedging costs and foreign exchange contracts not designated as hedging instruments, was a $4 million loss in the first six months of 2016, compared to a $4 million gain in the comparable prior year period. Offsetting these increases in non-operating loss was $5 million of lower charges related to the remeasurement of our Venezuelan Bolívar account balances.

Taxes

We operate in more than 100 countries around the world and our earnings are taxed at the applicable income tax rate in each of these countries. As required, we compute interim taxes based on an estimated annual effective tax rate.

We recorded a provision for income taxes of $7 million and $13 million for the three months ended June 30, 2016 and 2015, respectively, which resulted in an effective tax rate of 22.6% and 22.2%. The effective tax rate for both periods was favorably impacted as a result of profits generated in non-U.S. tax jurisdictions with lower tax rates than the U.S. statutory tax rate.

We recorded a provision for income taxes of $27 million and a benefit from income taxes of $227 million for the six months ended June 30, 2016 and 2015, respectively, which resulted in an effective tax rate expense of 28.7% and effective tax rate benefit o f 192.2%, respectively. The effective tax rate expense for the six months ended June 30, 2016 was favorably impacted as a result of profits generated in non-U.S. tax jurisdictions with lower tax rates than the U.S. statutory tax rate. The effective tax rat e benefit for the six months ended June 30, 2015 was primarily due to changing our assertion related to unremitted earnings of its non-U.S. subsidiaries . As of the beginning of 2015, we began asserting, with certain exceptions, that the unremitted earnings of our non-U.S. subsidiaries are indefinitely reinvested. As a result of this change in assertion, we reversed a previously established deferred tax liability of $256 million as a discrete benefit to the first quarter of 2015. If the $256 million discrete benefit related to the change in assertion was not recorded in the first quarter of 2015, the effective tax rate would have been 25.2% for the six months ended June 30, 2015.

Operations by Geographic Region

Operating segments are defined as components of an enterprise about which financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision-making groups, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We operate a globally consistent business model, offering clients in the healthcare industry with comprehensive solutions to measure and improve their performance.

We maintain regional geographic management who are responsible for bringing our full suite of offerings to their respective markets and to facilitate local execution of our global strategies. However, we maintain global leaders for the majority of our critical business processes; and the most significant performance evaluations and resource allocations made by our chief operating decision maker are made on a global basis. As such, we have concluded that we maintain one operating and reportable segment.

The following represents selected geographic information for the regions in which we operate.

(in millions)	Americas ⁽¹⁾		EMEA ⁽²⁾		Asia Pacific ⁽³⁾		Corporate & Other			Total
Three Months Ended June 30,
2016
Revenue ⁽⁴⁾	$	375	$	313	$	114	$	—		$	802
Operating income (loss) ⁽⁵⁾		50		71		31		(73	)		79
2015
Revenue ⁽⁴⁾	$	330	$	302	$	110	$	—		$	742
Operating income (loss) ⁽⁵⁾		44		61		30		(39	)		96

Six Months Ended June 30,
2016
Revenue ⁽⁴⁾	$	728	$	620	$	228	$	—		$	1,576
Operating income (loss) ⁽⁵⁾		95		137		66		(106	)		192

2015
Revenue ⁽⁴⁾	$	623	$	534	$	217	$	—		$	1,374
Operating income (loss) ⁽⁵⁾		111		119		69		(112	)		187

We periodically review and make changes to our geographic reporting classifications. As a result of these changes, prior years’ geographic financial information was reclassified to conform to the current year presentation. The reclassifications did not change previously reported condensed consolidated results of operations.

⁽¹⁾	Americas includes the United States, Canada and Latin America. Revenue in the United States was $325 million and $278 million for the second quarters of 2016 and 2015, respectively, and $630 million and $523 million for the first six months of 2016 and 2015, respectively.

⁽²⁾	EMEA includes countries in Europe, the Middle East and Africa, and the countries of India, Sri Lanka and Bangladesh.

⁽³⁾

Asia Pacific includes Japan, Australia and other countries in the Asia Pacific region, excluding India, Sri Lanka and Bangladesh. Revenue in Japan was $61 million and $59 million for the second quarters of 2016 and 2015, respectively, and $125 million and $123 million for the first six months of 2016 and 2015, respectively.

⁽⁴⁾	Revenue relates to external clients and is primarily based on the location of the client. Revenue for the geographic regions includes the impact of foreign exchange in converting results into U.S. Dollars.

⁽⁵⁾

Operating income (loss) for the three geographic regions does not reflect the allocation of certain expenses that are maintained in Corporate and Other and as such, is not a true measure o f the respective regions’ profitability. The Operating income (loss) amounts for the geographic regions include the impact of foreign exchange in converting results into U.S. dollars. The following presents the depreciation and amortization expense for cer tain intangible assets recorded in connection with a merger transaction completed in 2010 by region that are included in Corporate and Other:

(in millions)	Americas		EMEA		Asia Pacific
Three Months Ended June 30,
2016	$	19	$	4	$	6
2015		19		4		5
Six Months Ended June 30,
2016		37		8		12
2015		46		18		13

Americas Region

Revenue in the Americas region grew 13.9% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, revenue grew 15.3% in the second quarter of 2016 compared to the second quarter of 2015. The constant currency increase in revenues was primarily due to the AlphaImpactRx acquisition, growth in information offerings, and work flow analytics and technology and applications offerings within technology services. Revenue in the Americas region grew 16.9% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, revenue grew 18.7% in the first six months of 2016 compared to the first six months of 2015. The constant currency increase in revenues was primarily due to the Cegedim and AlphaImpactRx acquisitions, growth in information offerings, and work flow analytics and technology and applications offerings within technology services.

Operating income in the Americas region increased 12.6% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, operating income increased 13.2% in the second quarter of 2016 compared to the second quarter of 2015. The increase in constant currency operating income was a result of revenue growth, partially offset by higher operating expenses of $44 million, in part due to the AlphaImpactRx acquisition and continued investments in the region to drive revenue growth. Operating income in the Americas region decreased 14.8% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, operating income decreased 13.5% in the first six months of 2016 compared to the first six months of 2015. The decrease in constant currency operating income was a result of higher operating expenses of $131 million, largely due to continued investments in the region to drive revenue growth and the Cegedim and AlphaImpactRx acquisitions, partially offset by revenue growth.

EMEA Region

Revenue in the EMEA region grew 3.5% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, revenue grew 4.2% in the second quarter of 2016 compared to the second quarter of 2015. The increase in revenues on a constant currency basis was primarily due to growth in our technology and applications and work flow analytics offerings within technology services. Revenue in the EMEA region grew 16.3% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, revenue grew 18.3% in the first six months of 2016 compared to the first six months of 2015. The increase in revenues was primarily due to the Cegedim acquisition and, on a constant currency basis, by growth in technology and applications offerings within technology services.

Operating income in the EMEA region increased 15.1% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, operating income increased 15.5% in the second quarter of 2016 compared to the second quarter of 2015. The increase in constant currency operating income was a result of strong revenue growth in the region; partially offset by higher operating expenses of $3 million. Operating income in the EMEA region increased 15.4% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, operating income increased 17.3% in the first six months of 2016 compared to the first six months of 2015. The increase in constant currency operating income was a result of strong revenue growth in the region; partially offset by higher operating expenses of $77 million, in part due to the Cegedim acquisition.

Asia Pacific Region

Revenue in the Asia Pacific region grew 3.3% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, revenue decreased 0.4% in the second quarter of 2016 compared to the second quarter of 2015. The decrease in revenues on a constant currency basis was primarily due to lower revenues from information offerings, partially offset by growth in consulting services and technology and applications within technology services. Revenue in the Asia Pacific region grew 4.9% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, revenue grew 3.3% in the first six months of 2016 compared to the first six months of 2015. The increase in revenues was primarily

due to the Cegedim acquisition and growth in consulting services and technology and applications within technology services, partially offset by lower revenues from information offerings.

Operating income in the Asia Pacific region increased 4.5% in the three months ended June 30, 2016 compared to the same quarter in the prior year. On a constant currency basis, operating income declined 4.0% in the second quarter of 2016 compared to the second quarter of 2015. The decrease in constant currency operating income was primarily the result of lower revenues and higher operating expenses of $1 million. Operating income in the Asia Pacific region declined 4.2% in the six months ended June 30, 2016 compared to the same period in the prior year. On a constant currency basis, operating income declined 8.4% in the first six months of 2016 compared to the first six months of 2015. The decrease in constant currency operating income was primarily a result of higher operating expenses of $13 million, largely due to continued investments in the region to drive growth and the Cegedim acquisition, partially offset by the revenue increase.

How Exchange Rates Affect our Results

We operate globally, deriving a significant portion of our operating income from non-U.S. operations. As a result, fluctuations in the value of foreign currencies in which we transact business relative to the U.S. Dollar may increase the volatility of U.S. Dollar operating results. We enter into foreign currency forward contracts to partially offset the effect of currency fluctuations and the impact of these forward contracts is reflected in Other income (loss), net on the Condensed Consolidated Statements of Comprehensive Income. Foreign currency translation decreased our U.S. Dollar revenue growth by approximately 0.3 percentage points in the second quarter of 2016 and 1.4 percentage points in the first six months of 2016 and decreased our operating income decline by 2.8 percentage points in the second quarter of 2016 and increased our operating income growth by 2.1 percentage points for the first six months of 2016.

Non-U.S. monetary assets are maintained in currencies other than the U.S. Dollar, principally the Swiss Franc, Euro and the Japanese Yen, and as such, the reported values of these assets may be significantly affected by fluctuations in foreign exchange rates. At June 30, 2016, the Swiss Franc, Euro and Japanese Yen exchange rates were stronger against the U.S. Dollar compared to December 31, 2015. Where monetary assets are held in the functional currency of the local entity, changes in the value of these currencies relative to the U.S. Dollar are reflected in accumulated other comprehensive income in the Condensed Consolidated Statements of Financial Position. The effect of exchange rate changes, which included charges taken for our Venezuelan operations in the first six months of 2016 and 2015, increased the U.S. Dollar amount of cash and cash equivalents by $7 million during the first six months of 2016 and decreased it by $9 million in the comparable prior year period.

Liquidity and Capital Resources

We fund our liquidity needs for capital investment, working capital, and other financial commitments through cash flow from operations and our Senior Secured Credit Facilities (as defined below). At June 30, 2016, cash and cash equivalents were $368 million and the principal amount of our total indebtedness was $4,565 million. Additionally, we had $155 million available for borrowing under our secured revolving credit facility. In the last two calendar years combined, we have generated strong net cash provided by operating activities of $600 million. In addition to operating cash flows, other factors that affect our overall management of liquidity include capital expenditures, software development costs, acquisitions, debt service requirements, adequacy of our revolving credit facility and access to the capital markets.

We believe we will have available resources to meet both our short-term and long-term liquidity requirements, including our debt service. We expect that the cash flow from our operations, combined with existing cash and amounts available under the secured revolving credit facility, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, restructuring obligations and capital spending over the next year. In addition, we do not intend to use non-U.S. cash and cash equivalents to meet U.S. liquidity needs to the extent those earnings are permanently reinvested. While our board of directors reviews our dividend policy from time to time, we currently do not intend to pay dividends in the foreseeable future. In addition, we may, from time to time, purchase, repay, redeem or retire any of our outstanding debt or equity securities in privately negotiated or open market transactions, by tender offer or otherwise.

Cash Flows

Cash and cash equivalents decreased $28 million to $368 million at June 30, 2016 compared to $396 million at December 31, 2015. The decrease reflects cash used in investing activities of $372 million, mostly offset by cash provided by financing activities of $241 million and operating activities of $96 million and an increase in cash of $7 million due to the effect of exchange rate changes.

Net cash provided by operating activities amounted to $96 million for the six months ended June 30, 2016 compared to $215 million for the six months ended June 30, 2015. Cash flows from operating activities for the first six months of 2016 reflects lower cash-related net income of $13 million and unfavorable working capital movements of $90 million, primarily due to the timing of the collection of accounts receivable, approximately $40 million in timing of cash flows related to loyalty card programs we administer on

behalf of our customers, which were acquired in the second and third quarters of 2015 , and higher severance payments of approximately $19 million in the first six months of 2016. Additionally, we made a prepayment of approximately $15 million as an investment in specialty data. Income tax payments, net of refunds, and interest payments wer e approximately $7 million higher in the first half of 2016 compared to the same period in 2015.

Net cash used in investing activities amounted to $372 million for the six months ended June 30, 2016, a decrease in cash used of $79 million compared to the six months ended June 30, 2015. The decrease is primarily due to lower payments for acquisitions in the first half of 2016 as compared to the same period in the prior year.

Net cash provided by financing activities amounted to $241 million for the six months ended June 30, 2016, an increase of $38 million compared to the six months ended June 30, 2015. Net cash provided during the six months ended June 30, 2016 was primarily driven by proceeds from increased commitments under our existing Term A loans of $279 million, net of repayments, partially offset by repurchases of $29 million of our common stock. Net cash provided by financing activities for the first six months of 2015 included the issuance of 4.125% Senior Notes in March 2015 and additional term loans resulting from an amendment to our Senior Secured Credit Facilities in May 2015 totaling $471 million, net of repayments, partially offset by $300 million in share repurchases.

Share Repurchase

On December 16, 2015, our board of directors approved a $250 million common stock repurchase authorization. Our share repurchase authorization has been developed to buy opportunistically, when we believe that our share price provides us with an attractive use of our cash flow and debt capacity. Through December 31, 2015, we had purchased 670 thousand shares of our common stock having an aggregate value of approximately $17 million at an average price of $25.70 per share. In the second quarter of 2016, we purchased 1 million shares of our common stock having an aggregate value of approximately $25 million at an average price of $25.42 per share. These share repurchases were funded through a combination of cash and borrowings under our revolving credit facility. The repurchase authorization does not have a specified expiration date and can be modified, suspended or discontinued at any time. As of June 30, 2016, approximately $207 million is available to purchase shares under the December 2015 authorization.

On May 3, 2015, our board of directors authorized a $300 million common stock repurchase program. In connection with that program, on May 12, 2015, we purchased 11.1 million shares of our common stock having an aggregate value of approximately $300 million at $27.0875 per share. The share repurchase was funded through a combination of available cash, borrowings under our revolving credit facility and additional term loans under our Senior Secured Credit Facilities.

Debt

Senior Secured Credit Facilities

In January 2016, IMS Health Incorporated (“IMS Health”), our indirect wholly-owned subsidiary, entered into an amendment (the “2016 Amendment”) to the Third Amended and Restated Credit and Guaranty Agreement, dated as of March 17, 2014, among IMS Health, IMS AG and IMS Japan K.K., as co-borrowers, Healthcare Technology Intermediate Holdings, Inc., Bank of America, N.A. and the other lenders party thereto (as amended by the 2016 Amendment, the “Credit Agreement” and, together with the related security and other documents for the senior secured term loan facilities and the senior secured revolving facility, the “Senior Secured Credit Facilities”). The 2016 Amendment increased outstanding commitments under our existing Term A loans by $300 million. The proceeds from the additional Term A loans were used for general corporate purposes, including funding acquisitions and repaying existing loans under our senior secured revolving credit facility. As a result of the 2016 Amendment, we incurred $2 million of fees; of which $1 million was recorded in Other income (loss), net during the first quarter of 2016 and $1 million will be amortized to interest expense.

At June 30, 2016, we had an aggregate $500 million revolving credit facility, of which $155 million was unused.

See Note 6 to our Condensed Consolidated Financial Statements for further information on our debt.

Severance, Impairment and Other Charges

As a result of ongoing cost reduction efforts, we recorded severance charges consisting of global workforce reductions to streamline our organization. The following table sets forth the activity in our severance-related reserves for the six months ended June 30, 2016:

(in millions)	2016 Plan ⁽¹⁾			2015 Plan ⁽²⁾
Balance, December 31, 2015	$	—		$	51
Charges		65			—
Cash payments		(5	)		(28	)
Foreign exchange and other		(1	)		1
Balance, June 30, 2016	$	59		$	24

⁽¹⁾

In the first quarter of 2016, we implemented a restructuring plan (the “2016 Plan”) and recorded a pre-tax severance charge of $15 million. In the second quarter of 2016, we recorded an additional pre-tax severance charge of $50 million. The second quarter charge primarily resulted from the elimination of redundant roles in conjunction with the integration of Cegedim. We anticipate that there may be further charges recorded under the 2016 Plan during the remainder of fiscal year 2016. We expect that cash outlays related to the 2016 Plan will be substantially complete by the end of 2018.

⁽²⁾

In the first quarter of 2015, we implemented a restructuring plan (the “2015 Plan”) and recorded a pre-tax severance charge of $12 million. In the second quarter of 2015, we recorded an additional pre-tax severance charge of $15 million. An additional $49 million was recorded over the remainder of 2015. We expect that cash outlays related to the 2015 Plan will be substantially complete by the end of 2017.

Other charges

During the six months ended June 30, 2016, we recorded impairment charges of $2 million, the majority of which related to impaired leases for properties.

During the six months ended June 30, 2015, we recorded impairment charges of $7 million, $6 million of which was recorded in the second quarter of 2015. The $7 million charge is primarily comprised of the write-off of the value of computer software that was no longer in use and contract-related charges for which we will not realize any future economic benefits.

Contingencies

We are exposed to certain known contingencies that are material to our investors. The facts and circumstances surrounding these contingencies and a discussion of their effect on us are included in Note 11 to our Condensed Consolidated Financial Statements. These contingencies may have a material effect on our liquidity, capital resources or results of operations. In addition, even where our reserves are adequate, the incurrence of any of these liabilities may have a material effect on our liquidity and the amount of cash available to us for other purposes.

Management believes that we have made appropriate arrangements in respect of the future effect on us of these known contingencies. Management also believes that the amount of cash available to us from our operations, together with cash from financing, will be sufficient for us to pay any known contingencies as they become due without materially affecting our ability to conduct our operations and invest in the growth of our business.

Contractual Obligations

Following the increase in outstanding commitments under our existing Term A loans by $300 million pursuant to the 2016 Amendment, our future scheduled debt principal payments and estimated interest payments, based on rates as of June 30, 2016, are $126 million for the remainder of 2016, $559 million for 2017-2018, $1,868 million for 2019-2020 and $2,761 million thereafter.

Recently Issued Accounting Standards

Information relating to recently issued accounting standards is included in Note 1 to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, as well as other written reports and oral statements that we make from time to time, includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor guarantees that the future results, plans, intentions or expectations expressed or implied will be achieved. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “ongoing,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:

plans for future growth and other business development activities, including acquisitions;

plans for capital expenditures;

expectations for market and industry growth;

financing sources;

share repurchases and dividends;

the effects of regulation and competition;

foreign currency conversion;

the impact of litigation, government inquiries and investigations; and

all other statements regarding our intent, plans, beliefs or expectations or those of our directors or officers.

Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including regulatory, competitive and other factors, which may cause actual financial or operating results or the timing of events to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to:

our data suppliers might restrict our use of or refuse to license data, which could lead to our inability to provide certain offerings;

failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and our ability to meet our growth objectives;

we may be unsuccessful at investing in growth opportunities;

our ability to complete the proposed merger with Quintiles Transnational Holdings Inc. on anticipated terms and timing and to achieve anticipated synergies;

our ability to successfully integrate our business with Quintiles Transnational Holdings Inc., and any acquired business, and manage risks associated therewith;

any potential adverse reactions (including litigation), any disruptions or changes to business relationships resulting from the announcement or completion of the merger with Quintiles Transnational Holdings Inc.;

we may not close other announced transactions in the indicated time frames or at all, and may not successfully integrate our acquisition targets or for other reasons may not achieve expected benefits of our acquisition transactions;

imposition of restrictions on our current and future activities under data protection and privacy laws;

breaches or misuse of our or our outsourcing partners’ security or communications systems could expose us, our clients, our data suppliers or others to risk of loss;

hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements;

consolidation in the industries in which our clients operate may reduce the volume of offerings purchased by consolidated clients following an acquisition or merger;

our ability to protect our in tellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights;

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, including the June 23, 2016 referendum in the United Kingdom recommending the exit of its membership in the European Union (Brexit), which has resulted in volatility in global stock markets and foreign exchange rates. The outcome of tariff, trade, regulatory and other negotiations, which could take several years to resolve, may adversely affect our operations and financial results due to increased risks associated with the potential uncertainty and consequences that may follow Brexit, including further volatility in foreign exchange rates;

general economic conditions in the markets in which we operate, including financial market conditions; and

the other risks identified in our Annual Report on Form 10-K and any subsequent filings we make with the Securities and Exchange Commission.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Report. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our quantitative and qualitative disclosures about market risk during the six months ended June 30, 2016 as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 4. Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits to the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2016 (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective.

(b)	Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

P ART II—OTHER INFORMATION

Item 1. Legal Proceedings

On May 16, 2016, a putative stockholder class action lawsuit ( Chiu v. Bousbib et al. , C.A. No. 12340-CB) was filed in the Court of Chancery of the State of Delaware against the members of the IMS Health board of directors. An amended complaint in the Chiu action was filed on June 29, 2016. In general, the complaint alleges that the members of the IMS Health board of directors breached their fiduciary duties to IMS Health stockholders by, among other things, approving the proposed transaction for inadequate consideration and pursuant to an unfair and conflicted process. The amended complaint further alleges that the Registration Statement on Form S-4 filed June 3, 2016 in connection with the proposed transaction is materially misleading. The plaintiff seeks, among other things, injunctive relief prohibiting consummation of the transaction, rescissionary damages in the event the proposed transaction is consummated, and an award of attorneys’ fees and expenses. On July 1, 2016, the plaintiff filed a motion for a preliminary injunction seeking to enjoin the defendants from consummating the proposed transaction. The defendants have not yet responded to the plaintiff’s motion. We believe plaintiff’s allegations are without merit, reject all claims raised by plaintiff and intend to vigorously defend this matter.

Except for the update set forth above, there have been no material changes to the information set forth under the heading “Legal Proceedings” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Additionally, see Note 11, Contingencies, to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In addition to the risk factors set forth in Part I — Item 1A — “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “10-K”), investors should consider the following risk factors arising from our intention to combine with Quintiles Transnational Holdings Inc. (“Quintiles”) through a “merger of equals” business combination (the “merger”). On May 3, 2016, we entered into a definitive merger agreement (the “merger agreement”) with Quintiles. Pursuant to the terms of the merger agreement, we will be merged with and into Quintiles. Upon completion of the merger, the separate corporate existence of IMS Health will cease, and Quintiles will continue as the surviving corporation (the “Surviving Corporation”) in the merger. Following a stockholder vote by both companies, the merger is expected to close early in the fourth quarter of 2016 , although we cannot assure you that the transaction will close during that time or at all. The risk factors below should be read in conjunction with the risk factors set forth in the 10-K and the other information contained in this report as our business, financial condition or results of operations could be adversely affected if any of these risks actually occur.

Failure to complete the merger could negatively impact our stock prices and our future business and financial results.

If the merger is not completed for any reason, including as a result of our or Quintiles’ stockholders failing to approve the applicable proposals, our ongoing businesses may be materially adversely affected and, without realizing any of the benefits of having completed the merger, we would be subject to a number of risks, including the following:

we may experience negative reactions from the financial markets, including negative impacts on their respective stock prices;

we and our respective subsidiaries may experience negative reactions from their respective clients, suppliers, regulators, vendors and employees;

we will still be required to pay certain significant costs relating to the merger, such as legal, accounting, financial advisor and printing fees;

we may be required to pay one or more cash termination fees as required by the merger agreement;

the merger agreement places certain restrictions on the conduct of the respective businesses, which may have delayed or prevented us from undertaking business opportunities that, absent the merger agreement, we may have been pursued;

matters relating to the merger (including integration planning) require substantial commitments of time and resources by our management, which could have resulted in the distraction of our management from ongoing business operations and pursuing other opportunities that could have been beneficial to the applicable company; and

litigation related to any failure to complete the merger or related to any enforcement proceeding commenced against us to perform their respective obligations under the merger agreement.

If the merger is not completed, the risks described above may materialize and they may have a material adverse effect on our results of operations, cash flows, financial position and stock prices.

Completion of the merger is subject to a number of cond itions, which, if not satisfied or waived, may result in termination of the merger agreement.

The merger agreement contains a number of conditions to completion of the merger, including, among others:

receipt of our requisite shareholder approval;

receipt of the requisite Quintiles stockholder approval;

the termination or expiration of any applicable waiting period under applicable law and any required waiting periods, clearances, consents or approvals under certain foreign antitrust laws having expired or been obtained;

the absence of any temporary restraining order, preliminary or permanent injunction or other judgment, order or decree issued by any court of competent jurisdiction or other legal restraint that prohibits or makes illegal the completion of the merger;

the effectiveness of the Registration Statement on Form S-4, as amended (Registration No. 333-211794) and the absence of a stop order or proceedings threatened or initiated by the SEC for that purpose;

the accuracy of the representations and warranties made in the merger agreement by us, subject to certain materiality thresholds, and each party having performed, in all material respects, all obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger; and

the non-occurrence of any fact, circumstance, development, event, change, occurrence or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on either party.

Many of the conditions to completion of the merger are not within our control, and we cannot predict when or if these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to March 31, 2017, it is possible that the merger agreement may be terminated. Although we have agreed in the merger agreement to use reasonable best efforts, subject to certain limitations, to complete the merger in the most expeditious manner practicable, these and other conditions to completion of the merger may fail to be satisfied.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides detail about our share repurchases during the three months ended June 30, 2016.

Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of Shares Purchased Under Publicly Announced Programs		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs ⁽¹⁾
	(in millions, except per share data)
April 1, 2016 – April 30, 2016	—	$	—	—	$	—
May 1, 2016 – May 31, 2016	—		—	—		—
June 1, 2016 – June 30, 2016	1.0		25.42	1.0		207.3
Total	1.0	$	25.42	1.0	$	207.3

⁽¹⁾

On December 16, 2015, the board of directors authorized a $250 million common stock repurchase program. The repurchase authorization does not have a specified expiration date and can be modified, suspended or discontinued at any time. See Note 8 to our Condensed Consolidated Financial Statements for further details.

I tem 6. Exhibits

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed
Herewith

Form

File No.

Exhibit

Filing Date

3.1

Amended and Restated Certificate of Incorporation of IMS Health Holdings, Inc.

8-K

001-36381

3.1

April 9, 2014

3.2

Amended and Restated Bylaws of IMS Health Holdings, Inc.

8-K

001-36381

3.2

April 9, 2014

10.1

IMS Health Incorporated Employee Protection Plan and Summary Plan Description (as Amended and Restated Effective January 1, 2014).

10.2

First Amendment to the IMS Health Incorporated Employee Protection Plan and Summary Plan Description (effective June 1, 2016).

10.3

Fourth Amendment to the IMS Health Incorporated Retirement Excess Plan (effective May 3, 2016).

31.1

Certification of Chief Executive Officer and President, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Senior Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer and President, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Senior Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Statements of Financial Position, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Stockholders’ Equity, and (v) Notes to Condensed Consolidated Financial Statements.

S IGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized on July 28, 2016.

IMS HEALTH HOLDINGS, INC.

/s/ Ronald E. Bruehlman

Ronald E. Bruehlman

Senior Vice President and Chief Financial Officer

(On behalf of the Registrant and as Principal Financial Officer)

Exhibit 10.1

IMS Health Incorporated

Employee Protection Plan and Summary Plan Description

As Amended and Restated Effective January 1, 2014

I. Administrative Information

Plan Administration

The Employee Benefits Committee (the "Committee"), a committee of management employees of IMS Health Incorporated (the "Corporation"), is named as the Plan Administrator under the IMS Health Incorporated Employee Protection Plan (the "Plan"). As such, it has the exclusive right, power and authority to interpret the provisions of the Plan and to conclusively decide any questions arising in connection with the administration of, and any claim for severance benefits under, the Plan. All such determinations by the Plan Administrator shall be final and binding on all parties. Without limiting the generality of the foregoing, such authority shall include the discretionary power:

· To make and enforce such rules and regulations as the Plan Administrator deems necessary or proper for the efficient administration of the Plan;

· To interpret the Plan, the Plan Administrator's interpretation of the Plan to be final and conclusive on all persons claiming benefits under the Plan;

· To decide all questions, including questions of fact, concerning the Plan and the eligibility of any person to participate in, and receive benefits under, the Plan;

· To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and

· To establish procedures, forms and time frames with respect to elections and other matters under the Plan.

Right to Amend and Terminate

The Corporation currently intends to continue the Plan indefinitely, but reserves the right to amend, modify, or terminate any and all provisions of the Plan and any benefits payable under the Plan at any time without further obligation; provided, however, that during a Change in Control Period, the Corporation may not terminate the Plan, nor may the Corporation modify or amend the Plan in a manner that reduces the compensation or benefits otherwise payable under the Plan, nor may the Corporation modify or amend the Plan in a manner that materially adversely affects the rights of a person who has started to receive compensation or benefits under the Plan. Any amendment, modification or termination of the Plan may be made by action of the Corporation's Board of Directors, the Committee or their delegatees.

Not an Employment Contract

Participation in the Plan does not confer any rights to continued employment with the Corporation or any of its subsidiaries or affiliates.

EPP 2014 Restatement Final

Non-Assignment of Benefit

Benefits under the Plan may not be assigned, pledged or otherwise transferred. If, for example, an employee owes money to someone, he or she may not give that person the right to collect from the Plan any benefit which may be payable.

Prior Policies

Except for any restrictive covenant, confidentiality and/or arbitration or dispute resolution agreements entered into by an employee and the Corporation (which agreements shall remain in full force and effect), this Plan supersedes any and all prior severance plans, policies, arrangements, or practices of the Corporation (whether written or unwritten, express or implied) relating to any subject matter covered by the Plan. Notwithstanding the preceding sentence, the Plan does not affect the severance provisions of (a) any written individual employment agreement between an employee and the Corporation which results in such employee not being an Eligible Employee hereunder; (b) any change-in-control agreement; and (c) any other agreement entered into between an employee and the Corporation which expressly supersedes the provisions of this Plan (i.e., by naming this Plan) and which remains in effect at the date of such employee's termination of employment.

Offsets and Termination of Severance Benefits

Benefits payable under the Plan are not intended to duplicate such benefits as pay-in-lieu-of-notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, the requirements of any works council or labor organization or applicable laws, such as the WARN Act. Should such other benefits be payable, your benefits under this Plan will be reduced accordingly or, alternatively, benefits previously paid under this Plan will be treated as having been paid to satisfy such other benefit obligations. In either case, the Plan Administrator, in its sole discretion, will determine how to apply this provision and may override other provisions in this Plan in doing so.

The "Salary Continuation Period" described below will end and salary and benefits payable under this Plan will cease upon the earlier of: (a) the end of the Salary Continuation Period; (b) your reemployment by the Corporation or any subsidiary or affiliate of the Corporation; or (c) your earning compensation under any employment or compensatory arrangement for services provided to any party other than the Corporation (including as an employee, consultant, sole proprietor, security holder, or otherwise in an arrangement in which anything of value is earned or accrued based on your services).

If you are reemployed by the Corporation after having received Salary Continuation under the Plan or any previous severance plan of the Corporation or its predecessor companies, any Years of Service taken into account for purposes of determining such Salary Continuation will be disregarded in determining any future Salary Continuation or Benefits Continuation to which you may become entitled upon a subsequent Eligible Termination.

EPP 2014 Restatement Final

Claims Procedures

Your local Human Resources department reviews and authorizes the payment of benefits under this Plan for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding the payment of Plan benefits should be directed to your local Human Resources department. If you feel that you are not receiving benefits that are due, you must notify the Plan Administrator in writing. If the claim for benefits is denied (in whole or in part), you will be notified electronically or in writing within 90 days (180 days if the Plan Administrator notifies you within the 90-day period of a need for an extension) of receiving the claim. The notice of denial will state the reason for the denial, the pertinent Plan provisions upon which the denial is based, any additional information which may be needed and the reason such additional information (if any) is needed. In addition, you will be given an explanation of the Plan's claims review procedures and the time limits applicable to such procedures, including a statement that you have a right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") following an adverse benefit determination on review.

If you wish to have a denied claim further reviewed, you must send a written request for review to the Plan Administrator at 83 Wooster Heights Road. Danbury, CT 06810, within 60 days after your initial claim is denied. You may submit written comments, documents, records and other information relating to the claim to the Plan Administrator. Your claim for review will be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

The Plan Administrator will render a decision on the claim no later than 60 days after its receipt of your request for review. However, if the Plan Administrator finds it necessary, due to special circumstances, to extend this period and notifies you electronically or in writing, the decision will be rendered as soon as practicable, but in no event later than 120 days after your request for review. The Plan Administrator's decision will be provided electronically or in writing. Such decision will be written in a manner calculated to be understood by you and will include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that you have a right to bring a civil action under Section 502(a) of ERISA and that you are entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to your claim for benefits. A document is relevant to your claim for benefits if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

You may not institute any action or proceeding in any state or federal court of law or equity, or before any administrative tribunal or arbitrator, for a claim for benefits under the Plan until you have first exhausted the procedures set forth above. No action or proceeding at all may be brought in state or federal court or before any administrative tribunal or arbitrator for benefits under this Plan after one year from the date of the Plan Administrator's final decision on your claim as described above.

- 3 -

EPP 2014 Restatement Final

Statement of ERISA Rights

As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:

Examine, without charge, at the Plan Administrator's office, all Plan documents, including copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions.

Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may request a reasonable charge for the copies.

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of employee benefit plans. The people who operate your Plan, called "fiduciaries," have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may discriminate against you in any way for the purpose of preventing you from obtaining a benefit or exercising your rights under ERISA. If your claim for benefits is denied in whole or in part you must receive a written explanation of the reasons for the denial. You have the right to have the Plan Administrator review and reconsider your claim.

Under ERISA, there are steps you can take to enforce your rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court but any such suit must be filed within one year from the date of the Plan Administrator's final decision on your claim. If it should happen that you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

If you have any questions about your Plan, you should contact your local Human Resources department. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

Right to Withhold Taxes

The Corporation may cause such amounts to be withheld from any payment made under the Plan as it determines necessary to fulfill any federal, state or local wage or compensation withholding requirements.

- 4 -

EPP 2014 Restatement Final

Unfunded Plan

The Corporation will make all payments under the Plan, and pay all expenses of the Plan, from its general assets. Nothing contained in the Plan will give any employee any interest in any property of the Corporation or any of its subsidiaries or affiliates.

Governing Law

The provisions of the Plan will be construed, administered and enforced according to applicable federal law and the laws of the State of Connecticut, without regard to its conflict of law rules and with regard to its statutes of limitations.

Compliance with Section 409A

Interpretation Consistent with Section 409A

Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and the Treasury regulations thereunder (the "Regulations") and the Corporation shall have no right to accelerate or make any payment under this Plan except to the extent permitted under Section 409A of the Code. The Corporation shall have no obligation, however, to reimburse any employee for any tax penalty or interest payable or provide a gross-up payment in connection with any tax liability of such employee under Section 409A of the Code except that this provision shall not apply in the event of the Corporation's negligence or willful disregard in its interpretation of the application of Section 409A of the Code and the Regulations to the Plan, which negligence or willful disregard causes a Plan participant to become subject to a tax penalty or interest payable under Section 409A of the Code, in which case the Corporation will reimburse the participant on an after-tax basis for any such tax penalty or interest not later than the last day of the participant's taxable year next following the participant's taxable year in which the participant remits the applicable taxes and interest.

Exemptions from Section 409A

A Plan participant's right to salary continuation payments under this Plan shall be treated at all times as a right to a series of separate payments under Section 1.409A-2(b)(2)(iii) of the

Regulations. It is intended that: (a) all payments made under this Plan on or before the 15th day of the third month following the end of the participant's taxable year in which the participant terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations (the "Exempt Short-Term Deferral Payments"); and (b) payments under this Plan, in excess of the Exempt Short-Term Deferral Payments, that are made on or before the last day of the second taxable year of the participant following the participant's taxable year in which the participant terminates employment in an aggregate amount not exceeding two times the lesser of: (i) the sum of the participant's annualized compensation based on the participant's annual rate of pay for the participant's taxable year preceding the taxable year in which the participant terminates employment (adjusted for any increase during that year that was expected to continue indefinitely if the participant had not terminated employment); or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(1 7) of the Code for the year in which the participant terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for payments under a separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the Regulations.

- 5 -

EPP 2014 Restatement Final

Specific Plan Information

Plan Name

The IMS Health Incorporated Employee Protection Plan

Plan Type

Welfare/Severance Plan

Type of Administration
Self Administered

Plan Year

January 1 to December 31

Name and Address of Plan Sponsor

IMS Health Incorporated
83 Wooster Heights Road
Danbury, CT 06810

Name, Address and Telephone Number of Plan Administrator

The Employee Benefits Committee

Attention: General Counsel

IMS Health Incorporated

83 Wooster Heights Road

Danbury, CT 06810

203-448-4600

Agent for Service of Legal Process
IMS Health Incorporated

Service of legal process may also be
made upon the Plan Administrator
(see address above)

Source of Financing of Benefits

The general assets of the Corporation

Effective Date of this Amendment and Restatement of the Plan
January 1,2014

Employer Identification Number
06-1506026

Plan Number
506

- 6 -

EPP 2014 Restatement Final

II. Plan Terms

Introduction

The Plan provides severance benefits to eligible employees of the Corporation.

Plan Coverage

The Plan covers all full-time salaried employees and regular part-time salaried employees of the Corporation and any affiliated company that the Committee has designated to participate in the Plan (collectively referred to as the "Corporation") who incur an "Eligible Termination" (as defined below). These employees are referred to in this summary as "Eligible Employees." Notwithstanding the foregoing, (a) an employee who has entered into an agreement with the Corporation which expressly excludes such employee from participation in this Plan (e.g., by naming this Plan or excluding participation in Company-sponsored severance plans generally) and which remains in effect at the date of such employee's termination of employment shall not be an Eligible Employee; and (b) an employee who otherwise would qualify but who is not on the United States payroll shall be an Eligible Employee only if so determined by the Plan Administrator, and such Eligible Employee, and any employee of an affiliated company who qualifies as an Eligible Employee shall be subject to such additional terms and limitations as the Plan Administrator may consider necessary or advisable; and (c) a worker who has signed an agreement with the Corporation stating that he or she is not eligible to participate in the Plan and any worker that the Corporation treats as an independent contractor, during the period that the worker is so treated, regardless of whether such worker may be determined to be an employee by administrative, judicial or other decision, shall not be an Eligible Employee; and (d) effective January 1,2012, an employee of SDI Health LLC on December 31, 2011 shall not be an Eligible Employee until November 1, 2012; and (e) effective June 30, 2012, an employee of DecisionView, Inc. on June 30, 2012 shall not be an Eligible Employee until April 20, 2013. Each Eligible Employee shall be designated as within one of the groups specified as "Selected Executives," "Level A," "Level B," or "Level C" as described in Section III below.

Eligible Termination

Severance benefits are only payable under this Plan if an Eligible Employee incurs an "Eligible Termination." An Eligible Termination means an involuntary termination of an Eligible Employee's employment by the Corporation for any reason except that an involuntary termination for "Cause", as defined below, will not constitute an Eligible Termination and in the case of any Eligible Employee designated as within Level A, B or C as described in Section III below, an involuntary termination due to unsatisfactory performance will not constitute an Eligible Termination unless otherwise determined by the Plan Administrator in its sole discretion.

The foregoing notwithstanding, an Eligible Termination shall not include (a) a unilateral resignation; or (b) any termination where an offer of employment is made to the Eligible Employee of a comparable position at the Corporation. Solely for the purpose of determining whether an Eligible Employee has received an offer of a comparable position in connection with a Business Unit Acquisition (as defined below), an Eligible Employee shall be considered to have received such an offer if the offer is for employment with the entity that engaged in such Business Unit Acquisition, the compensation payable pursuant to such offer is not less than 100% of such Eligible Employee's base Salary with the Company immediately prior to the Business Unit Acquisition and the principle

- 7 -

EPP 2014 Restatement Final

place of employment under such offer is not more than 30 miles away from such Eligible Employee's principle pla ce of employment with the Corporation immediately prior to the Business Unit Acquisition. The determination of whether an Eligible Employee has received an offer of a comparable position under any other circumstances shall be determined by the Plan Adminis trator, in its sole discretion.

"Business Unit Acquisition" for purposes of this Plan means the acquisition by an entity unrelated to the Corporation of substantially all of the assets of a business unit of the Corporation.

"Cause" for purposes of this Plan means:

(a)	Willful malfeasance or willful misconduct by the Eligible Employee in connection with his or her employment;

(b)	Continuing failure to perform such duties as are requested by any employee to whom the Eligible Employee reports, directly or indirectly or by the Board of Directors of the Corporation;

(c)	Failure by the Eligible Employee to observe material policies of the Corporation; or

(d)	The commission by the Eligible Employee of (i) any felony or (ii) any misdemeanor involving moral turpitude.

Severance Benefits

If an Eligible Employee incurs an Eligible Termination not within a Change in Control Period, he or she will be entitled to the Salary Continuation and benefits described in Section III below for the period specified in Section III. If the Eligible Termination occurs within a Change in Control Period, the Eligible Employee shall be entitled to receive Salary Continuation in an amount equal to 130% of the amount determined in accordance with Section III for the period specified in Section III and benefits for the period specified in Section III, except as otherwise provided below; provided, however, that if the Corporation and the Eligible Employee have entered into a change in control agreement or other agreement specifically providing for severance payments and benefits upon specified terminations following a change in control of the Corporation which is in effect at the date of the Eligible Termination (whether or not severance payments and benefits are actually payable under such other agreement), no Salary Continuation or benefits will be payable to the Eligible Employee under this Plan. Under certain limited circumstances, however, the Chief Executive Officer of the Corporation (or other officers to whom authority is delegated) may alter the provisions of the Plan (by, for example, increasing or reducing benefits otherwise payable under the Plan), but not the time or form of payment of those benefits, in a manner that complies with Section 409A of the Code. Severance benefits under the Plan may not, in any event, exceed the limitations imposed by ERISA on severance payable under welfare benefit plans.

- 8 -

EPP 2014 Restatement Final

arrangement under which such services will be provided, prior to or upon commencement of such employment or arrangement, including the date as of which such employment or ser vices commenced. The Corporation shall be entitled to take any and all reasonable actions to recover from the Eligible Employee (or his or her successor in interest) any payments made and the fair market value of any benefits provided to the Eligible Emplo yee with respect to which the Eligible Employee is not entitled pursuant to this (or any other) section of the Plan. The Eligible Employee (or his or her successor in interest) shall pay: (1) all costs and expenses (including, but not limited to, attorneys ' fees, investigation costs, and collection agency fees) incurred by the Corporation in enforcing its rights under this (or any other) section of the Plan; and (2) interest, based on the prime rate (as published in the Wall Street Journal as of the date th e payment was made or the benefit provided) plus 2%, on any amounts recovered from the date such amounts were paid or provided to the Eligible Employee (or his or her successor in interest) to the date of recovery by the Corporation. Unless otherwise deter mined by the Plan Administrator, the amount of Salary payable during the period specified in Section III below shall be reduced by each of the following amounts applicable to the Eligible Employee (but not reduced to an amount less than zero):

the amount of any sign-on bonus or any other amount(s) paid by the Corporation to the Eligible Employee (other than the payment of base Salary, performance-related incentives, or reimbursement of business-related expenses incurred by the Eligible Employee) in connection with the Eligible Employee's commencement of employment, if such payment(s) occurred within twelve months of the date of the Eligible Termination,

the amount of any severance payments, termination payments or any other amounts paid or payable to the Eligible Employee arising from or relating to the termination of employment of the Eligible Employee by the Corporation on account of pay-in-lieu-of- notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, the requirements of any works council or labor organization or applicable laws, such as the WARN Act.

If reduced in accordance with this paragraph, the aggregate amount of Salary payable during the period specified in Section III shall be payable proportionately over the period during which Salary Continuation is to be paid, as specified in Section III.

The payment of severance benefits in excess of two weeks of Salary and benefits, as provided in Section III, is conditioned upon the signing of a release and agreement and such other documents that the Plan Administrator may require in a form approved by the Plan Administrator. The release and agreement will require an Eligible Employee's waiver of all claims, legal and contractual, against the Corporation, its subsidiaries and affiliates. In addition, it may require, among other things, that for the greater of a period of one year following termination or through the end of the Salary Continuation Period described below, the Eligible Employee (a) be reasonably available to consult and cooperate with the Corporation on various matters and (b) not compete with the Corporation, its subsidiaries and affiliates, or recruit or solicit their customers or employees. The release and agreement will be provided to the Eligible Employee as soon as administratively practicable following the Eligible Termination and must be executed and returned to the Corporation eight days before the date of commencement of payment of severance and benefits in excess of two weeks of Salary and benefits. (In order to satisfy the exemption from Section 409A of the Code described above, the date of commencement of payment of severance and benefits in excess of two weeks of Salary and benefits shall be on or before the earlier of: (i) the 90 ^th day following the

- 9 -

EPP 2014 Restatement Final

Eligible Termination, determined in the sole discretion of the Plan Administrator; or (ii) March 15 ^th of the calendar year following the year in which the Eligible Termination occurred.)

IMPORTANT: If an Eligible Employee does not sign the release and agreement, he or she will not be entitled to any benefits under the Plan in excess of two weeks of Salary and benefits and will have NO RIGHT to any other severance benefits under the Plan. If the release and agreement is signed, the payment of severance benefits may be delayed until the end of any period during which an employee is permitted by law to revoke a signed release. An Eligible Employee's obligation under the agreement continues for the greater of one year following termination or through the Salary Continuation Period, even if Salary Continuation ends prior to expiration of this period.

Anything in this Plan to the contrary notwithstanding, payment of Salary Continuation that is not exempt from compliance with Section 409A of the Code to any Specified Employee upon separation from service shall not be made before the date that is six months after the date of separation from service (or, if earlier, the date of death of such Specified Employee). Any Salary Continuation payment which is subject to the six-month delay in payment described in this paragraph will be adjusted to reflect the deferred payment date by multiplying the delayed payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365. The adjusted payment shall be made at the beginning of the seventh month following the Specified Employee's separation from service.

Certain terms are used in the description of Plan benefits contained in this summary. These terms, and their meanings, are as follows:

"Annual Incentive" means an incentive, the amount of which is based on performance conditions and eligibility rules of the respective IMS plan over a one-year period.

"Sales Incentive" means an incentive, the amount of which is based on performance conditions and eligibility rules of the respective IMS plan under a one-year period.

"Benefits Continuation" means the continuation of medical, dental and life benefits that are paid over the Salary Continuation Period, as described in Section III.

"Change in Control" means the occurrence of one of the following events:

(a) any "Person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the Corporation, any trustee or other fiduciary holding securities under an employee benefit plan of the Corporation, or any corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock in the Corporation) becomes the "Beneficial Owners" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then-outstanding securities;

(b) during any period of 24 months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the board of directors of the Corporation (the "Board"), and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Corporation to effect a transaction described in paragraphs (a),

- 10 -

EPP 2014 Restatement Final

(c), or (d) of this definition, (ii) a director nominated by any Person (including the Corporation) who publicly announces an inten tion to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control, or (iii) a director nominated by any Person who is the Beneficial Owner, directly o r indirectly, of securities of the Corporation representing 10% or more of the combined voting power of the Corporation's securities) whose election by the Board or nomination for election by the Corporation's stockholders was approved in advance by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority the reof;

(c) any transaction (or series of transactions) is consummated under which the Corporation is merged or consolidated with any other company, other than a merger or consolidation (i) which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation and (ii) after which no Person holds 20% or more of the combined voting power of the then-outstanding securities of the Corporation or such surviving entity;

(d) a sale or disposition by the Corporation of all or substantially all of the Corporation's assets is consummated or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation; or

(e) the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

"Change in Control Period" means the period beginning upon a Change in Control and ending at the end of the 12th month following the Change in Control.

"Salary" means an Eligible Employee's annual base Salary in effect at the time of an Eligible Termination except, for purposes of determining the amount payable during the Salary Continuation Period, the Plan Administrator may, in its sole discretion, include an additional cash amount as part of the amount of Salary, in order to reflect any periodic payment being received as compensation by the Eligible Employee in addition to Salary immediately prior to termination and to ensure comparability of benefits among Eligible Employees receiving benefits under the Plan.

"Salary Continuation" means the Salary that is paid over the Salary Continuation Period.

"Salary Continuation Period" means the total number of weeks over which Salary Continuation is payable. The Salary Continuation Period will begin immediately following the Eligible Termination, subject to the Eligible Employee's execution and return of the release and agreement described above for Salary Continuation in excess of two weeks.

"Specified Employee" means an employee who satisfies the requirements for being designated a "key employee" under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year.

- 11 -

EPP 2014 Restatement Final

"Year of Service" means each full and partial year of employment with the Corporation. Service will also include periods of employment prior to th e reorganization of Dun & Bradstreet or Cognizant Corporation to the extent they were taken into account under the Dun & Bradstreet and Cognizant Career Transition Plans prior to such reorganization. All partial years of employment will be aggregated to de termine an Eligible Employee's total Years of Service under the Plan. Prior periods of employment with companies that are acquired or become affiliated with the Corporation will not be taken into account unless expressly approved by the Plan Administrator. For purposes of determining Salary Continuation and Benefits Continuation payable to an Eligible Employee who is re-employed by the Corporation, Years of Service taken into account for purposes of determining any Salary Continuation previously paid to suc h re employed Eligible Employee under the Plan or any previous severance plan of the Corporation or its predecessor companies shall be disregarded in determining such Eligible Employee's Salary Continuation and Benefits Continuation upon an Eligible Termin ation following such re employment.

III. Salary and Benefits Continuation Information

Salary Continuation

An Eligible Employee who has an Eligible Termination will be assigned to a Designated Group as follows:

Designated Group	Participation Criteria	Salary Range
Selected Executives	Persons who have entered into N/A Change in Control Agreements

A	Persons who have not entered into Change in Control Agreements	Salary greater than or equal to $150,000

	Persons who have not entered into Change in Control Agreements	Salary between $75,000 and $149,000

	All other Eligible Employees	Salary less than $75,000

- 12 -

EPP 2014 Restatement Final

An Eligible Employee's Designated Group assignment will determine the period of Salary and Benefits Continuation upon an Eligible Termination in accordance with the following table:

	Selected Executives	Group A	Group B	Group C
Less than 1 Year	26 weeks of	16 weeks of	8 weeks of Salary	4 weeks of Salary
of Service	Salary and	Salary and	and Benefits	and Benefits
	Benefits	Benefits	Continuation	Continuation
	Continuation	Continuation
One or more	1.5 weeks of	1.5 weeks of	1 week of	I week of Salary
Years of Service	Salary and	Salary and	Salary and	and Benefits
	Benefits	Benefits	Benefits	Continuation per
	Continuation	Continuation per	Continuation per	$10,000 of Salary
	per $10,000	$10,000 of Salary	$10,000 of Salary	plus
	of Salary plus	plus	plus	1.5 weeks of
	3 weeks of	2 weeks of	2 weeks of	Salary and
	Salary and	Salary and	Salary and	Benefits
	Benefits	Benefits	Benefits	Continuation for
	Continuation	Continuation for	Continuation for	each Year of
	for each Year of Service, subject to minimum and maximum	each Year of Service, subject to minimum and maximum	each Year of Service, subject to minimum and maximum	Service, subject to minimum and maximum


Minimum	26 weeks	16 weeks	8 weeks	4 weeks
Maximum	104 weeks	78 weeks	52 weeks	52 weeks

Salary will be payable semi-monthly throughout the Salary Continuation Period. The amount of the semi-monthly payments will be at your annualized Salary rate.

Sample Calculation

If an employee has 16 Years of Service with the Corporation and is earning a Salary equal to $110,000 at the time of an Eligible Termination, the employee will receive semimonthly payments at the annualized rate of $110,000 as below:

1.0 x ($1 10,000/$10,000) = 11 weeks

plus

2.0 x 16 = 32.0 weeks

Resulting in a total of 43 weeks of Salary

- 13 -

EPP 2014 Restatement Final

Benefits Continuation

Medical, dental and life insurance benefits will continue throughout the Salary Continuation Period at the levels in effect for the Eligible Employee immediately prior to the Eligible Termination but in no event greater than the levels in effect for active employees generally during the Salary Continuation Period, provided that the Eligible Employee shall pay the employee portion of any required premium or contribution and that continuation of any medical flexible spending accounts will be on an after-tax basis only. Any period during which an Eligible Employee and his or her dependents may be entitled to continued medical coverage following an Eligible Termination pursuant to federal or state laws will commence as of the Eligible Termination and not the end of the Salary Continuation Period.

Eligible Employees do not accrue or earn vacation or time-off benefits during the Salary Continuation Period.

Termination of Salary and Benefits Continuation

The Salary Continuation Period described herein will end and salary and benefits payable under this Plan will cease upon the earlier of: (a) the end of the Salary Continuation Period; (b) the Eligible Employee's reemployment by the Corporation or any subsidiary or affiliate of the Corporation; or (c) the Eligible Employee's earning compensation under any employment or compensatory arrangement for services provided to any party other than the Corporation (including as an employee, consultant, sole proprietor, security holder, or otherwise in an arrangement in which anything of value is earned or accrued based on the Eligible Employee's services). The Eligible Employee must inform the Plan Administrator of any such employment or other arrangement under which such services will be provided, prior to or upon commencement of such employment or arrangement, including the date as of which such employment or services commenced. The Corporation shall be entitled to take any and all reasonable actions to recover from the Eligible Employee (or his or her successor in interest) any payments made and the fair market value of any benefits provided to the Eligible Employee with respect to which the Eligible Employee is not entitled pursuant to this (or any other) section of the Plan. The Eligible Employee (or his or her successor in interest) shall pay: (I) all costs and expenses (including, but not limited to, attorneys' fees, investigation costs, and collection agency fees) incurred by the Corporation in enforcing its rights under this (or any other) section of the Plan; and (2) interest, based on the prime rate (as published in the Wall Street Journal as of the date the payment was made or the benefit provided) plus 2%, on any amounts recovered from the date such amounts were paid or provided to the Eligible Employee (or his or her successor in interest) to the date of recovery by the Corporation.

Annual Incentives

If you were an eligible participant of the IMS Annual Incentive Plan (AIP) or IMS Business Development Plan (BD) for more than 6 full months during the plan year, you may be eligible to receive a prorated award. This does not mean you are guaranteed to receive an award or any particular payment amount, as incentive awards are subject to funding and an assessment of your performance by management on all plan components. If applicable, your incentive target will be prorated based on the number of days worked and the effective date of any change(s) to base salary and/or target percentage during the plan year. All applicable awards will be paid in the March timeframe in the year following the plan year.

- 14 -

EPP 2014 Restatement Final

Sales Incentives

An eligible participant whose termination occurs during the performance period may be eligible to receive a prorated incentive award for the performance period in which the termination occurred. If applicable, your incentive target will be prorated based on the number of days worked during the performance period. The amount payable will be subject to plan performance applicable to you and will be paid at the time the incentive payments would have been paid if an Eligible Termination had not occurred.

Stock Options

Upon termination of employment, any and all exercisable (vested) stock options held by an Eligible Employee either shall forfeit, or will remain exercisable for a limited period of time as set forth in the applicable stock option plan(s) and grant agreement distributed to plan participants. Unvested stock options shall forfeit immediately upon termination of employment.

Outplacement Services

An Eligible Employee will be entitled to such reasonable outplacement services as may be provided by the Corporation. The Corporation will inform all Eligible Employees of the availability of outplacement services. Any such outplacement services provided to an Eligible Employee will not extend beyond the last day of the second calendar year following the calendar year in which the Eligible Employee's Eligible Termination occurred, provided that any reimbursement for outplacement expenses may be paid by the last day of the third calendar year following the calendar year in which the Eligible Employee's Eligible Termination occurred.

Death During Salary Continuation Period

In the event of an Eligible Employee's death during the Salary Continuation Period, the Salary Continuation and Incentive amounts will continue to be paid to the Eligible Employee's estate at the time or times otherwise provided for in this Plan. The payment of all other benefits under the Plan will cease.

No Further Grants

Following an Eligible Employee's termination of employment and in accordance with the applicable plans and programs, no new grants, awards or contributions will be made to, by or on behalf of him or her under any plan or program of the Corporation including, but not limited to, an Incentive Plan and any stock option, retirement or savings plan. In addition, participation in all Corporation benefit plans (other than the medical, dental and life insurance coverage which may be continued under this Plan) will cease upon termination of employment.

- 15 -

EPP 2014 Restatement Final

Exhibit 10.2

FIRST AMENDMENT

TO THE

IMS HEALTH INCORPORATED EMPLOYEE PROTECTION PLAN

(as amended and restated effective January 1, 2014)

Effective as of the date written below, the IMS Health Incorporated Employee Protection Plan (the “Plan”), as amended and restated effective January 1, 2014 is amended as follows:

The definition of “ Change in Control” is amended to include the following paragraph immediately after subparagraph (e):

“Notwithstanding anything in the Plan to the contrary, in no event shall the execution of the Agreement and Plan of Merger by and between IMS Health Holdings, Inc. and Quintiles Transnational Holdings Inc. dated May 3, 2016, as may be amended, the announcement of the potential transaction contemplated by such agreement nor the consummation of the transaction contemplated by such agreement, constitute a Change in Control for purposes of the Plan.”

In all other respects the Plan remains in full force and effect.

The Leadership Development and Compensation Committee of the IMS Health Holdings, Inc. Board of Directors has caused this instrument of amendment to be executed this first day of June, 2016.


Very truly yours,

IMS HEALTH INCORPORATED

By:	/s/ Harvey A. Ashman
	Name: Harvey A. Ashman
	Title: Secretary

Exhibit 10.3

Fourth Amendment
to the
IMS HEALTH INCORPORATED RETIREMENT EXCESS PLAN

This AMENDMENT NO. 4, dated as of May 3, 2016 (this “ Amendment ”), to that certain IMS Health Incorporated Retirement Excess Plan, as amended and restated effective January 1, 2005, as amended on March 17, 2009, December 8, 2009 and April 5, 2011 (the “ Plan ”).

W I T N E S S E T H:

WHEREAS the board of directors of IMS Health Incorporated (the “ Company ”) desires to amend Section 3.6(a)(ii) of the Plan.

NOW THEREFORE, it is hereby acknowledged and agreed that:

1. Defined Terms . Capitalized terms used herein, but not defined herein, have the respective meanings ascribed thereto in the Plan.

2. Amendment .

Section 3.6(a)(ii) of the Plan is hereby amended by adding the following to the end of such section:

“Notwithstanding the foregoing, in no event shall the execution of the Agreement and Plan of Merger by and between IMS Health Holdings, Inc. and Quintiles Transnational Holdings Inc. dated May 3, 2016, as may be amended, the announcement of the potential transaction contemplated by such agreement nor the consummation of the transaction contemplated by such agreement, constitute a Potential Change in Control or a Change in Control for purposes of the Plan.”

3. Reference to and Effect on the Plan . Except as specifically amended herein, the Plan shall remain in full force and effect and is hereby ratified and confirmed. All references in the Plan to the “Plan” shall mean the Plan as amended by this Amendment.

4. Effectiveness . This Amendment shall become effective as of the date this Amendment is approved by the board of directors of the Company.

[Signature Page to Follow]


Very truly yours,

IMS HEALTH INCORPORATED

By:	/s/ Harvey A. Ashman
	Name: Harvey A. Ashman
	Title: Secretary

Effective Date: May 3, 2016

Exhibit 31.1

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Ari Bousbib, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of IMS Health Holdings, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

/s/ Ari Bousbib

Ari Bousbib

Chairman, Chief Executive Officer & President

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Ronald E. Bruehlman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IMS Health Holdings, Inc. (the “registrant”);

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 28, 2016

/s/ Ronald E. Bruehlman

Ronald E. Bruehlman

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of IMS Health Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2016 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ari Bousbib, Chairman, Chief Executive Officer & President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: July 28, 2016

/s/ Ari Bousbib

Ari Bousbib

Chairman, Chief Executive Officer & President

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of IMS Health Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2016 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald E. Bruehlman, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: July 28, 2016

/s/ Ronald E. Bruehlman

Ronald E. Bruehlman

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)