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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2001

|o | 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 0-30822

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SYNAVANT Inc.

(Exact name of Registrant as specified in its Charter)

Delaware(State of Incorporation)

22-2940965(I.R.S. Employer Identification No.)


3445 Peachtree Road, Suite 1400
Atlanta, Georgia 30326(Address of principal office, including zip code)

(404) 841-4000(Registrant's telephone number, including area code)

Securities
Registered pursuant to Section 12(b) of the Act: None

Securities
Registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /x/

The
aggregate market value of the voting stock and non-voting common equity held by nonaffiliates of the Registrant at March 1, 2002 was approximately $48,202,090
based on $3.20 per share, the closing price of the common stock as quoted on the Nasdaq National Market.

The
number of shares of the Registrant's common stock outstanding at March 1, 2002, was 15,063,153 shares.

DOCUMENT INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2002 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the
Registrant's 2001 fiscal year end are incorporated by reference into Part III of this report.

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TABLE OF CONTENTS

|           |          |                                                                                       | PAGE
|---------- | -------- | ------------------------------------------------------------------------------------- | ----
|PART I     |          | 2                                                                                    
|           | ITEM 1.  | BUSINESS                                                                              |     
|           | ITEM 2.  | PROPERTIES                                                                            |     
|           | ITEM 3.  | LEGAL PROCEEDINGS                                                                     |     
|           | ITEM 4.  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |     
|PART II    |          | 16                                                                                   
|           | ITEM 5.  | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                              |     
|           | ITEM 6.  | SELECTED FINANCIAL DATA                                                               |     
|           | ITEM 7.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |     
|           | ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |     
|           | ITEM 8.  | FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA                                            |     
|           | ITEM 9.  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  |     
|PART III   |          | 60                                                                                   
|           | ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                    |     
|           | ITEM 11. | EXECUTIVE COMPENSATION                                                                |     
|           | ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |     
|           | ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |     
|PART IV    |          | 60                                                                                   
|           | ITEM 14. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                       |     
|SIGNATURES |          | 63                                                                                   

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PART I

ITEM 1. BUSINESS

SYNAVANT Inc. (referred to hereafter as "SYNAVANT" or the "Company") serves the biopharmaceutical and healthcare industries through its three core business
categories: implementing and supporting pharmaceutical-specific customer relationship management ("CRM") solutions, developing interactive marketing programs and medical professional databases, and
offering strategic consulting services that support clinical research, sales and marketing decision-making and program implementation. SYNAVANT is composed of the automated sales and marketing support
businesses which were formerly part of IMS HEALTH INCORPORATED ("IMS HEALTH") which operated under the name IMS HEALTH Strategic Technologies, Inc. ("ST"); certain other former foreign
subsidiaries of IMS HEALTH; substantially all of IMS HEALTH's former interactive and direct marketing businesses, including the business of Clark-O'Neill, Inc. ("Clark O'Neill"), formerly a
wholly owned subsidiary of IMS HEALTH; and a 51% interest in Permail Pty., Ltd. ("Permail"). Shares of SYNAVANT were distributed to shareholders of IMS HEALTH following the conveyance of assets
and stock of entities comprising the SYNAVANT business into SYNAVANT Inc., a Delaware corporation.

SYNAVANT BUSINESS OPPORTUNITY

There are four main strategic issues facing biopharmaceutical and healthcare companies today:



In
the future, biopharmaceutical and healthcare companies will be seeking business partners to help them determine appropriate strategies to succeed in these areas. They will be looking
to integrate their clinical, sales and marketing strategies and to optimize their promotional spending. They will be striving to leverage the maximum return on their technology investments and achieve
the maximum value from their relationships with their own customers.

In
March 2000, IMS HEALTH announced the spin-off of SYNAVANT. The vision was to create a new global biopharmaceutical and healthcare solutions company, SYNAVANT, that
combined the sales force automation ("SFA") and database services competencies of ST with the interactive marketing capabilities of Clark-O'Neill, Permail and the Company's foreign subsidiaries.
Interactive marketing programs such as Single Source Sampling (a cooperative program to mail drug samples to physicians) and Rep Triggered Mail (customer sales representative mailings targeted to
physicians) could be integrated into the sales force effectiveness positioning of ST to create a unique value proposition for its biopharmaceutical customers in the expanding CRM space.

In
fourth-quarter 2001, SYNAVANT added a third business category to its core competencies: Global Strategic Solutions ("GSS"). The GSS consulting team leverages the historical experience
from the interactive marketing and technology businesses to create new innovative solutions for biopharmaceutical customers. CRM Readiness Review and Promotional Optimization Modelling are examples of
new value streams that will be created from core business integration with strategic consulting competencies.

While
each of SYNAVANT's three core business categories (CRM software implementation and post-implementation services, interactive marketing and database services and
strategic consulting services) comprises services that meet specific customer needs and may be delivered independently

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from each other, their value to the customer is increased substantially when they are combined, or integrated, with each other. It is the Company's view that these integrated services are SYNAVANT's
differentiator in the market. Through its strategic asset integration process, that leverages SYNAVANT's capabilities across these three areas, SYNAVANT is a solutions provider capable of delivering
integrated services that provide significant value to customers.

As
well as driving value for customers, SYNAVANT's competency enhances its ability to cross-sell its services within each customer and generate more opportunities.

SYNAVANT's SOLUTIONS

SYNAVANT's services are comprised of strategic technology services, strategic consulting, and interactive marketing and database services. The Company reports
strategic technology services and strategic consulting as Software Services and interactive marketing and database services as Interactive Marketing on its Consolidated Statement of Operations.

Strategic
technology services include a set of services that provide value to customers in three general areas: software, system implementation and system support.

SYNAVANT
offers several software products to enable SFA. Cornerstone is a legacy product used in the U.S. by several pharmaceutical companies to support their sales forces.
A handheld product, PhasTraksm, is also available that connects remote users using a personal digital assistant ("PDA") device. PremièreSM is another
SYNAVANT SFA tool used by many European, Canadian, and Latin American pharmaceutical companies. Lastly, SYNAVANT created a proprietary analytical tool, AnalyzerSM, which helps
pharmaceutical sales representatives, managers and head office staff manage, view and analyze market data and information that is generated from these systems.

System
implementation services are a core competency and service offered by SYNAVANT to support large-scale software implementations for the healthcare marketplace. SYNAVANT can
implement its proprietary systems or other software systems such as integrated CRM solutions (e.g., the Siebel Systems'eBusiness suite for the life
sciences market, includingePharma, eClinical, eMedical and Employee Relationship Management applications).

Post
implementation system support services combine several key areas of customer value: help desk and other web-based customer support, hardware maintenance, asset
management, training, and facilities management.

SYNAVANT's
global interactive marketing services comprise offerings developed to help pharmaceutical brand managers promote their products to targeted physicians effectively. Sampling
services range from targeted sample solicitation to doctors to custom sample fulfillment programs. Medical Dialogue is a service that influences doctor prescribing in a
peer-to-peer environment using skilled healthcare professionals. Doctor call centers, circulation management for medical publishers, custom physician list generation, and
direct marketing programs complete the competencies harnessed in this business category.

SYNAVANT's
major database service offering is PharbaseSM. PharbaseSM is a repository of comprehensive physician and other healthcare professional profile
information for several major markets around the world. In many countries it is recognized as the most accurate reference database due to its usage by
government agencies for regulatory communications to physicians. Pharmaceutical companies rely on PharbaseSM to accurately manage customer level information. Pharbase is not available in
the U.S.

SYNAVANT's
strategic consulting division, Global Strategic Solutions (GSS), was created at the end of 2001 to leverage SYNAVANT's historical experience in technology implementation and
pharmaceutical promotion with the consulting skills of the new team. This team is focused on helping

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pharmaceutical companies become more customer focused to realize the potential from their technology, sales and marketing investments within the context of the overall vision and direction of their
business. It also helps pharmaceutical companies by driving new value streams and maximizing the effectiveness of their brand promotion and customer relationships.

PARTNERSHIPS AND ALLIANCES

An important element of SYNAVANT's business model involves working with key partners. It is essential to have the right alliance agreements in place to enable
both parties to maximize the value of their complementary skills and services.

SYNAVANT
continues to form alliances with appropriate partners, including certain "Big 5' consulting groups, to deliver new and essential services to target customers. Of paramount
importance is the value the alliance brings customers and therefore SYNAVANT's choice of partner may vary from customer to customer. By combining SYNAVANT's intellectual property and ongoing,
long-term service capabilities with complementary back-end technology implementation expertise from other consulting organizations, SYNAVANT is able to deliver a total solution
to the customer.

SIEBEL ALLIANCE

On July 14, 2000, SYNAVANT entered into a strategic alliance (the "Alliance") with Siebel Systems Inc. ("Siebel"), a leading provider of eBusiness
application software. Through the Alliance, the companies intended to jointly develop, market and sell pharmaceutical and healthcare related versions of Siebel's eBusiness software applications as
part of a joint offering.

As
part of the Alliance, SYNAVANT and Siebel entered into: (1) a Value Added Industry Remarketer Agreement (the "Reseller Agreement"), (2) a Siebel Alliance Program Master
Agreement (the "Alliance Agreement"), and (3) a license of certain Siebel software for SYNAVANT's internal use. Pursuant to the Reseller Agreement, Siebel appointed SYNAVANT as a
non-exclusive distributor of certain Siebel licensed software. Under the Agreement, SYNAVANT had the right to distribute Siebel software products to companies in the life sciences industry
(e.g., pharmaceutical, biotechnology and healthcare
companies) worldwide in conjunction with SYNAVANT's own proprietary software and services. As part of the arrangement, Siebel and SYNAVANT shared in the fees generated from the licensing of the Siebel
software when contracted by SYNAVANT as part of a joint offering. The Alliance Agreement has been superceded by a new Siebel Alliance Program Master Agreement ("the Revised Alliance Agreement")
entered into by SYNAVANT and Siebel on December 31, 2001.

Under
the Revised Alliance, SYNAVANT and Siebel have agreed to terminate the Reseller Agreement, revise the Alliance Agreement and to continue the license of certain Siebel software for
SYNAVANT's internal use. In addition to terminating the Reseller Agreement, the Revised Alliance also results in the following:



A
chief difference between this new partner status and the previous one is that SYNAVANT is no longer a Siebel Value Added Reseller ("VAR") and therefore no longer sells Siebel licenses.
This

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eliminates any channel conflict for license sales, allowing SYNAVANT to concentrate on delivering its core competencies of consulting, implementation and support services for Siebel technology in a
manner that achieves high value. Another important benefit of this new partner status is that SYNAVANT has additional rights to implement and support Siebel's eMedical,eClinical and ERM applications, providing a broader revenue opportunity from the life sciences
area.

RESEARCH AND DEVELOPMENT

Research and development expenses totaled $8.6 million, $12.6 million, and $13.2 million for the years ended December 31, 2001, 2000
and 1999, respectively. While historical development efforts have focused on legacy and next generation core proprietary SFA applications, future efforts will be focused on the development of a
broader set of proprietary applications that are compatible with Siebel's ePharma technology platform. These CRM applications are expected to expand the focus of the Company's traditional SFA efforts
(sales and marketing) into other areas including call centers, web sites, and clinical trials, as well as CRM solutions for medical device companies.

FOREIGN OPERATIONS

SYNAVANT and its subsidiaries engage in a significant portion of their business outside of the United States. SYNAVANT's foreign operations are subject to the
usual risks inherent in carrying on business outside of the United States, including fluctuations in relative currency values, possible nationalization, expropriation, price controls and other
restrictive government actions. SYNAVANT believes that the risk of nationalization or expropriation is reduced because its products are software, services and information, rather than the production
of products that require manufacturing facilities or the use of natural resources.

INTELLECTUAL PROPERTY

SYNAVANT owns and controls a number of trade secrets, confidential information, trademarks, trade names, copyrights, and other intellectual property rights which,
in the aggregate, are of material importance to its business. SYNAVANT is licensed to use certain technology and other intellectual property rights owned and controlled by others, and similarly, other
companies are licensed to use certain technology and other intellectual property rights owned and controlled by SYNAVANT. The names of SYNAVANT's and its subsidiaries' products and services referred
to herein are trademarks, service marks, registered trademarks or registered service marks owned by or licensed to SYNAVANT or one of its subsidiaries.

CUSTOMERS

Sales to the pharmaceutical industry accounted for substantially all of SYNAVANT's revenue in 2001. Substantially all major pharmaceutical companies are customers
of SYNAVANT, and many of the companies use SYNAVANT's products and subscribe to its services in several countries. SYNAVANT's customer base is broad in scope and enables it to avoid dependence on any
single customer. None of SYNAVANT's customers accounted for more than 10% of its gross revenues in 2001, 2000 or 1999.

COMPETITION

SYNAVANT has competition from other automated sales, marketing and clinical research support technology companies that offer sales force automation and customer
relationship management solutions and enterprise-wide solutions, as well as competition from the in-house capabilities of its customers. SYNAVANT also faces competition from
many vendors that market and sell sales force automation solutions in the consumer packaged goods industry. In addition, SYNAVANT competes with various companies that provide support and interactive
marketing services similar to its own

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services. Generally, competition has arisen on a country or regional basis. For example, in the United States, certain SYNAVANT solutions and services, including its Cornerstone
application and SiebeleBusiness solutions compete with the products and services of Dendrite International Inc.("Dendrite"), and in Europe
certain SYNAVANT solutions and services, including its PharbaseSM database, PremiereSM application and SiebeleBusiness
solutions, compete with the products and services of Cegedim SA ("Cegedim") and Binleys (part of the Wilmington Group plc), as well as Dendrite. Integration of services and the variety of solutions
offered by SYNAVANT help to create a unique value proposition. Quality, breadth of solutions, integration of services and speed of delivery of information services and products are the principal
methods of competition in SYNAVANT's market.

In
addition, when the Company entered into the initial Siebel Alliance, it announced that it would discontinue the enhancement and development of its Cornerstone and
PremiereSM products and begin migrating its customer base to a Siebel solution instead of internally developing a next generation product offering. Although the Revised Siebel Alliance
eliminated the restrictions on development of SYNAVANT's proprietary products, the Company estimates that during 2002, customers representing between 15% to 20% of its worldwide revenue base will be
evaluating and concluding on which software products will be utilized by its sales force in future years. Should customers select alternative services providers for Siebel ePharma implementation or
support services, the Company would expect the impact of these decisions to be substantially offset by the expanded business opportunities from the revised Siebel Alliance, growth in the interactive
marketing business, and new services offered through GSS.

EMPLOYEES

As of December 31, 2001, SYNAVANT had approximately 1,400 employees in 23 countries. Of these, approximately 500 are located in the United States, and none
of these are represented by labor unions. In Germany, SYNAVANT has a European Workers' Council, which is a legal requirement in that country. SYNAVANT believes that, generally, relations with its
employees are good and have been maintained in a normal and customary manner.

Factors That May Affect Future Performance

In addition to other information in this annual report on Form 10-K, the following risk factors should be carefully
considered in evaluating our Company and our business because such factors currently may have a significant impact on our business, operating results and financial condition. As a result of the risk
factors set forth below, actual results could differ materially from those projected in any forward-looking statements.

COMPETITION FROM OTHER PROVIDERS OF CUSTOMER RELATIONSHIP MANAGEMENT SOLUTIONS MAY REDUCE DEMAND FOR OUR PRODUCTS AND SERVICES OR CAUSE US TO REDUCE THE PRICE OF OUR PRODUCTS
AND SERVICES.

We
compete with other companies that sell sales force software products and services and interactive marketing services that specifically target the pharmaceutical industry. We also face
competition from many vendors that market and sell CRM solutions in the consumer packaged goods industry. In addition, we compete with various companies that provide support services and interactive
marketing services similar to our services.

We
may not compete effectively in our markets. Competitive pressure may result in our reducing the price of our products and services, which would negatively affect our revenues and
operating margins. If we are unable to compete effectively in our markets, our business, results of operations and financial condition would be materially and adversely affected.

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Increased
competition is anticipated based on the growing strategic focus on Customer Relationship Management ("CRM") and the success of Siebel's E-Business solutions. Large
established companies, such as Oracle, SAP and Microsoft, that are well established providers of ERP software solutions are expected to offer new CRM solutions that may compete with SYNAVANT solutions
based on Siebel technology.

The
Company typically contracts with customers for a three year license and support agreement for software products. At the end of the contract the customer may renew their agreement,
normally for a one to two year period. Past experience has indicated that the Company's customers typically reassess these contracts every three to five years. As customers reassess their
requirements, the Company may not be able to renew the agreements, and may not be selected to provide implementation and/or support services even if a Siebel solution is selected by the customer. The
Company estimates that during 2002, between 15% to 20% of its worldwide revenue base will be evaluating and concluding on which software products will be utilized by its sales force in future years.

Some
of our competitors and potential competitors are part of large corporate groups and have longer operating histories and significantly greater financial, sales and marketing,
technology and other resources than we have. In the event that we are unable to compete successfully with these companies, it could have a material adverse effect on our business, operating results or
financial condition.

IF OUR REVISED ALLIANCE WITH SIEBEL IS UNSUCCESSFUL, OUR BUSINESS MAY SUFFER MATERIALLY.

You
should note the following risk factors relating to our alliance with Siebel:



WE MAY NEED ADDITIONAL FINANCING TO MEET OUR FUTURE CAPITAL REQUIREMENTS.

We invest in research and development as well as in capital projects to enhance existing products and services and develop new products and services in response
to technological and marketplace changes. As of December 31, 2001, the Company had cash and cash equivalents of $9.6 million and availability under the revolving credit facility with
Foothill Capital Corporation (See Item 7Liquidity and Capital Resources Section). To the extent that we need additional funding in the future to finance our operations and capital
expenditures, we may not be able to access the capital markets or otherwise obtain necessary financing, or to obtain such financing in a timely manner or on commercially favorable terms. In the event
that we satisfy our financing needs through the issuance of additional equity securities, such issuance would be dilutive to existing stockholders.

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THE LOSS OF OUR KEY PERSONNEL COULD NEGATIVELY IMPACT OUR BUSINESS AND RESULTS OF OPERATIONS.

Our
success depends on our continuing ability to attract, hire, train and retain a substantial number of highly skilled managerial, technical, sales, marketing and customer support
personnel. In particular, our Chairman and Chief Executive Officer, Wayne P. Yetter, is integral to our future success and is not currently bound by an employment agreement. Competition for qualified
personnel is intense, and we may fail to retain our key employees or to attract or retain other highly qualified personnel. Even if we are able to attract qualified personnel, new hires frequently
require extensive training before they achieve desired levels of productivity. If we are unable to hire or fail to retain competent personnel, our business, results of operations and financial
condition could be materially and adversely affected. None of our key employees is bound by an employment agreement.

OUR FAILURE TO INTRODUCE NEW OR ENHANCED PRODUCTS IN A TIMELY MANNER COULD RENDER OUR PRODUCTS OBSOLETE AND UNMARKETABLE.

We
compete in businesses that develop and market sophisticated information systems, software and other technology. We expect that these systems, software and other technology will be
subject to refinements as such systems and underlying technologies are upgraded and advanced. As various systems and technologies become outdated, we may not be able to enhance or replace them, to
enhance or replace them as quickly as our competition, or to develop and market new or enhanced products and services in the future on schedule and on a cost-effective basis. Our failure
to develop and market new or enhanced products that compete with other available products could materially and adversely affect our business, results of operations and financial condition.

Our
success will depend in part upon our ability to:



DEFECTS IN OUR PRODUCTS COULD DELAY MARKET ADOPTION OF OUR SOFTWARE OR CAUSE US TO COMMIT SIGNIFICANT RESOURCES TO REMEDIAL EFFORTS.

Software
products frequently contain errors or failures, especially when first introduced or when new versions or enhancements are released. We could be forced to delay the commercial
release of products until software problems have been corrected. We could lose revenues as a result of software errors or defects. Our products are intended for use in sales and marketing applications
that may be critical to a customer's business. As a result, we expect that customers and potential customers will have a greater sensitivity to product defects than the market for software products
generally. Testing errors may also be found in new products, enhancements or releases after commencement of commercial shipments, resulting in loss of revenue or delay in market acceptance, damage to
our reputation, or increased service and warranty costs, any of which could have a material adverse effect on our business, operating results or financial condition. The foregoing would also be
applicable to Siebel products around which future services would be based. With respect to such products, we would also depend on Siebel for the correction of errors and the delivery of any required
modifications relating to such products.

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OUR SUCCESS DEPENDS ON THE STRENGTH OF THE PHARMACEUTICAL INDUSTRY.

Our products and services are primarily used in connection with the marketing and sale of prescription-only drugs. The market for
prescription-only drugs is undergoing a number of significant changes, including:



Our
failure to respond effectively to any or all of these and other changes in the marketplace for prescription-only drugs could have a material and adverse effect on our
business, operating results and financial condition.

SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY AND ANNUAL OPERATING RESULTS MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.

We
believe that our quarterly and annual operating results could fluctuate significantly in the future, and our results of operations could fall below the expectations of securities
analysts and investors. If this occurs or if market analysts perceive that it will occur, our market value could decrease substantially. The selection of a CRM software product and service partners
often entails an extended decision-making process because of the strategic implications and substantial costs associated with a customer's license of the software and project implementation. As a
result, the decision-making process typically takes nine to eighteen months, although in some cases it may take even longer. Accordingly, we cannot control or predict the timing of our execution of
contracts with customers. In addition, an implementation process of three to nine months is customary before the software is rolled out to a customer's sales force. Other factors may cause significant
fluctuations in our quarterly and annual operating results, including:



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We
establish expenditure levels for product development, sales and marketing and other operating expenses based in large part on expected future revenues and anticipated competitive
conditions. In particular, we frequently add staff in advance of new business to permit adequate time for training. If the new business is delayed or cancelled, we will incur expenses without the
associated revenues. In addition, we may increase sales and marketing expenses if competitive pressures become greater than we currently anticipate. Because only a small portion of expenses varies
directly with actual revenues in the near term, operating results and profitability are likely to be adversely and disproportionately affected if revenues fall below expectations.

AS WE EXPAND OUR INTERNATIONAL SALES AND MARKETING ACTIVITIES, OUR BUSINESS WILL BE MORE SUSCEPTIBLE TO NUMEROUS RISKS ASSOCIATED WITH INTERNATIONAL
OPERATIONS.

We
operate globally, deriving 43.7%, 45.2% and 48.1% of our revenues in 2001, 2000 and 1999, respectively, from foreign operations. As a result, fluctuations in the value of foreign
currencies relative to the U.S. dollar may increase the volatility of our operating results. To be successful, we believe we must expand our operations in emerging markets such as eastern Europe,
Mexico, South America and Asia and hire additional international personnel. As a result, we expect to commit resources to expand our international sales and marketing activities. If successful, we
will be subject to a number of risks associated with international business activities. These risks generally include:



EXPOSURE TO CERTAIN DISTRIBUTION LIABILITIES MAY MATERIALLY AND ADVERSELY AFFECT US.

We
are subject to certain material liabilities associated with certain matters relating to activities prior to the Distribution (See Note 10 to the Consolidated Financial
Statements). As a condition to our spin-off
from IMS HEALTH, we are required to undertake to be jointly and severally liable to certain corporate predecessors of IMS HEALTH for IMS HEALTH's obligations under certain agreements with such
entities, including potential liability relating to a complaint filed against such entities alleging violations of federal antitrust laws and seeking $350 million in damages. Pursuant to our
agreement with IMS HEALTH, IMS HEALTH will indemnify the Company for any liability we incur in connection with such Distribution liabilities in excess of $9.0 million, which has been recorded
in the consolidated financial statements. Any failure of IMS HEALTH to fulfill its indemnification obligations that resulted in our obligation to fund a substantial portion of such excess liabilities
could have a material adverse effect on our business, operating results and financial condition.

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WE MAY BE UNABLE TO GENERATE SUFFICIENT CASH FLOWS TO ADEQUATELY FUND CERTAIN DISTRIBUTION LIABILITIES

If we incur the Distribution liability of up to $9.0 million, pursuant to our agreement with IMS HEALTH, in connection with the alleged violations of
federal antitrust laws by our corporate predecessors, our cash flows may need to be over and above our projected income in order to meet our financial obligations. There is no assurance that we will
have a sufficient amount of pre-tax income to meet our financial obligations in respect to such Distribution liabilities, which could have a material and adverse effect on our business,
operating results and financial condition.

WE MAY BE SUBJECT TO TAXATION IF THE SPIN-OFF DOES NOT QUALIFY AS A TAX FREE TRANSACTION

If the distribution of SYNAVANT shares of common stock to IMS HEALTH shareholders, pursuant to the spin-off, were not to qualify under
Section 355 of the Internal Revenue Code, the aggregate corporate tax liability could be approximately $100 million and SYNAVANT could be severally liable for such tax. In the event that
SYNAVANT were obligated to fund a substantial portion of such liability, it would have a material adverse effect on SYNAVANT'S financial condition. Moreover, each IMS HEALTH stockholder that received
shares of SYNAVANT common stock in the spin-off would be treated as if such stockholder had received a taxable distribution in an amount equal to the fair market value of the SYNAVANT
common stock received.

GOVERNMENTAL REGULATION MAY MATERIALLY AND ADVERSELY AFFECT OUR ABILITY TO DISTRIBUTE CONTROLLED SUBSTANCES THROUGH THE MAIL.

We
currently distribute controlled substances to doctors' offices through the mail as part of certain interactive marketing programs we provide on behalf of pharmaceutical manufacturers.
It is important to our business that this practice of distributing prescription-only drugs continues. Future legislation may
restrict our ability to provide these types of services. If any such legislation is enacted, it could have a material and adverse effect on our business, operating results and financial condition.

WE RELY ON OUR ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY.

We rely on a combination of trade secret, copyright and trademark laws, non-disclosure and other contractual agreements, and technical measures to
protect our proprietary technology. The steps we have taken or will take in the future may not prevent misappropriation of our technology. Further, protective actions we have taken or will take in the
future may not prevent competitors from developing products with features similar to our products. In addition, effective copyright and trade secret protection may be unavailable or limited in certain
foreign countries. Despite our efforts to protect our products' proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as
proprietary. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend
against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could harm our business, operating results and financial condition.

CLAIMS AGAINST US REGARDING OUR PROPRIETARY TECHNOLOGY COULD REQUIRE US TO PAY LICENSING OR ROYALTY FEES OR TO MODIFY OR DISCONTINUE OUR PRODUCTS.

Any
claim that our products infringe on the intellectual property rights of others could materially and adversely affect our business, results of operations and financial condition.
Because knowledge of a third party's patent rights is not required for a determination of patent infringement and because the United States Patent and Trademark Office is issuing new patents on an
ongoing basis, infringement claims against us are a continuing risk.

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Infringement
claims against us could cause product release delays, require us to redesign our products or require us to enter into royalty or license agreements. These agreements may be
unavailable on acceptable terms. Litigation, regardless of the outcome, could result in substantial cost, divert management attention and delay or reduce customer purchases. Claims of infringement are
becoming increasingly common as the software industry matures and as courts apply expanded legal protections to software products. Third parties may assert infringement claims against us regarding our
proprietary technology and intellectual property licensed from others. Generally, third-party software licensors indemnify us from claims of infringement. However, licensors may be unable to indemnify
us fully for such claims, if at all.

If
a court determines that one of our products violates a third party's patent or other intellectual property rights, there is a material risk that the revenue from the sale of the
infringing product will be significantly reduced or eliminated, as we may have to:



In
addition, if a court finds that one of our products infringes a third party's patent or other intellectual property rights, then we may be liable to that third party for actual
damages and attorneys' fees. If a court finds that we willfully infringed on a third party's patent, the third party may be able to recover treble damages, plus attorneys' fees and costs.

OUR CERTIFICATE OF INCORPORATION, OUR BYLAWS AND OUR AGREEMENT WITH IMS HEALTH CONTAIN PROVISIONS THAT MAY DISCOURAGE A TAKEOVER.

Our
Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws contain provisions that may have the effect of discouraging an acquisition of control
of the Company not approved by our Board of Directors. Such provisions may also have the effect of discouraging third parties from making proposals involving an acquisition or change of control of the
Company, although such proposals, if made, might be considered desirable by a majority of our stockholders. Such provisions could further have the effect of making it more difficult for third parties
to cause the replacement of our Board of Directors. These provisions include:



These
provisions have been designed to enable us to develop our businesses and foster our long-term growth without disruptions caused by the threat of a takeover not deemed
by our Board of Directors to be in the best interests of us and our stockholders. In addition, under the Distribution Agreement we entered into with IMS HEALTH, we agree that until August 31,
2002 we will not,

12

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among other things, merge or consolidate with another corporation, sell or transfer all or substantially all of our assets, or take any other action which would result in one or more persons
acquiring a 50 percent or greater interest in us, unless, before taking such action, we obtain a written opinion of a law firm or a ruling from the Internal Revenue Service that such action
will not affect the tax-free treatment of the distribution. Such provisions may have the effect of discouraging third parties from making proposals involving an acquisition or change of
control of the Company.

We
have a stockholder rights plan that is designed to protect our stockholders in the event of an unsolicited offer and other takeover tactics that, in the opinion of our Board of
Directors, could impair the Board's ability to represent stockholder interests. The provisions of our stockholder rights plan may render an unsolicited takeover of the Company more difficult or less
likely to occur or might prevent such a takeover.

Pursuant
to the Distribution Agreement with IMS HEALTH, we are each subject to certain non-competition arrangements that restrict our respective business activities for a
specified period after the distribution. Pursuant to the terms of the Distribution Agreement, the restrictions would generally be binding on an entity that acquires us or is the survivor in a business
combination with the Company. Such restrictions may have the effect of discouraging third parties from making proposals involving an acquisition or change in control of the Company. We are also
subject to the provisions of Delaware corporate law, which may restrict certain business combination transactions.

Where You Can Find More Information

At your request, we will provide you, without charge, a copy of any exhibits to this annual report on Form 10-K. If you want an exhibit or more
information, call, write or e-mail us at:



Our
fiscal year ends on December 31. We file annual, quarterly, and special reports, proxy statements and other information with the Securities and Exchange Commission. You may
read and copy any reports, statements, or other information we file at the SEC's public reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from commercial document retrieval services
and at the Web site maintained by the SEC at http://www.sec.gov.

13

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ITEM 2. PROPERTIES

SYNAVANT's real property is geographically distributed to meet sales and operating requirements worldwide. Most of SYNAVANT's properties are leased from third
parties. SYNAVANT owns only one parcel of real property, which represents less than 2% of the aggregate space utilized by SYNAVANT. SYNAVANT's properties are generally considered to be both suitable
and adequate to meet current operating requirements and virtually all space is being utilized. Set forth below is a summary of the properties that SYNAVANT leases from third parties:

|Location                            |  | Approx. Area
(in sq. feet) |  | Use                                                  |  | Expiration Date
|----------------------------------- |  | -------------------------- |  | ---------------------------------------------------- |  | ---------------
|Atlanta, Georgia                    |  | 75,484                     |  | Headquarters/Distribution/
Sales/Support/Development |  | 8/31/07        
|Sydney, Australia                   |  | 14,530                     |  | Sales/Support                                        |  | 6/30/06        
|Wien, Austria                       |  | 2,492                      |  | Sales/Support                                        |  | 12/31/02       
|Drogenbos, Belgium                  |  | 37,319                     |  | Sales/Support/Development                            |  | 6/30/09        
|Sao Paulo, Brazil                   |  | 6,415                      |  | Sales/Support                                        |  | 8/31/03        
|Toronto, Ontario, Canada            |  | 27,364                     |  | Sales/Support                                        |  | 9/30/02        
|Ismaning, Germany                   |  | 9,567                      |  | Sales/Support                                        |  | 2/28/03        
|Athens, Greece                      |  | 3,552                      |  | Sales/Support                                        |  | 3/14/03        
|Istanbul, Turkey                    |  | 915                        |  | Sales/Support                                        |  | 6/15/02        
|Naarden, Netherlands                |  | 11,377                     |  | Sales/Support                                        |  | 6/30/03        
|Singapore                           |  | 700                        |  | Sales/Support                                        |  | 7/14/02        
|Madrid, Spain                       |  | 16,200                     |  | Sales/Support                                        |  | 7/01/05        
|Lisbon, Portugal                    |  | 6,100                      |  | Sales/Support                                        |  | 6/01/06        
|Tokyo, Japan                        |  | 2,640                      |  | Sales/Support                                        |  | 12/31/02       
|Leatherhead, Surrey, United Kingdom |  | 8,000                      |  | Sales/Support                                        |  | 5/12/02        
|Rugby, Warwickshire, United Kingdom |  | 32,000                     |  | Sales/Support                                        |  | 11/30/02       
|Norcross, Georgia                   |  | 56,884                     |  | Sales/Support                                        |  | 8/31/07        
|Fairview, New Jersey                |  | 195,184                    |  | Sales/Support/Distribution                           |  | 3/31/03        
|Totowa, New Jersey                  |  | 136,855                    |  | Distribution                                         |  | 1/31/11        
|Wayne, New Jersey                   |  | 50,902                     |  | Sales/Support                                        |  | 2/28/12        
|Viroflay, France                    |  | 13,885                     |  | Sales/Support                                        |  | 9/15/04        
|Milan, Italy                        |  | 9,850                      |  | Sales/Support                                        |  | 8/31/05        

ITEM 3. LEGAL PROCEEDINGS

SYNAVANT has from time to time been involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the
outcome of all current proceedings, claims and litigation will not materially affect SYNAVANT's consolidated financial position.

In
addition, as discussed below, SYNAVANT is subject to certain other contingencies of which it is jointly and severally liable with IMS HEALTH. However, IMS HEALTH and SYNAVANT have
agreed that SYNAVANT's share of such liabilities will not exceed $9.0 million, and IMS HEALTH has agreed to indemnify SYNAVANT for any liability it incurs in connection with such contingent
liabilities in excess of such amount. In the event that IMS HEALTH does not fulfill such indemnification obligations, SYNAVANT could be liable for an amount in excess of $9.0 million in
connection with such contingent liabilities. While it is highly unlikely, in the event that SYNAVANT were obligated to fund a substantial portion of such liabilities, it would have a material adverse
effect on SYNAVANT's financial condition and results of operations. In addition, SYNAVANT and IMS HEALTH have agreed that SYNAVANT will not be required to make any payment in connection with this
commitment until at least January 1, 2005.

14

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Under
the terms of the distribution agreements relating to the 1996 spin-off of IMS HEALTH's predecessor, Cognizant Corporation ("Cognizant"), from The Dun &
Bradstreet Corporation ("D&B") and relating to the 1998 spin of IMS HEALTH from Cognizant, as a condition to the distribution, IMS HEALTH and any company that it spins off, including SYNAVANT, are
required to undertake to be jointly and severally liable to D&B, A.C. Nielsen Company and Cognizant for IMS HEALTH's obligations under the 1996 Distribution Agreement and the 1998 Distribution
Agreement. Such obligations include potential tax liability relating to the aforementioned spin-offs and relating to certain global tax planning initiatives entered into by Cognizant, D&B
and IMS HEALTH, and potential liability relating to the IRI Action.

Set
forth below is a description of the IRI Action:

On
July 29, 1996, Information Resources, Inc. ("IRI") filed a complaint in the United States District Court for the Southern District of New York, naming as defendants D&B,
A.C. Nielsen Company and I.M.S. International Inc. (a predecessor of IMS HEALTH) (the "IRI Action"). The complaint alleges various violations of the United States antitrust laws, including
alleged violations of Sections 1 and 2 of the Sherman Act. The complaint also alleges a claim of tortious interference with a contract and a claim of tortious interference with a prospective business
relationship. These latter claims relate to the acquisition by defendants of Survey Research Group Limited ("SRG"). IRI alleges that SRG violated an alleged agreement with IRI when it agreed to be
acquired by defendants and that the defendants induced SRG to breach that agreement. IRI's complaint alleges damages in excess of $350 million, which amount IRI has asked to be trebled under
the antitrust laws. IRI also seeks punitive damages in an unspecified amount. On October 15, 1996, defendants moved for an order dismissing all claims in the complaint. On May 6, 1997,
the United States District Court for the Southern District of New York issued a decision dismissing IRI's claim of attempted monopolization in the United States, with leave to
replead within sixty days. The Court denied defendants' motion with respect to the remaining claims in the complaint. On June 3, 1997, defendants filed an answer denying the material
allegations in IRI's complaint, and A.C. Nielsen Company filed a counterclaim alleging that IRI has made false and misleading statements about its services and commercial activities. On July 7,
1997, IRI filed an amended and restated complaint repleading its alleged claim of attempted monopolization in the United States and realleging its other claims. On August 18, 1997, defendants
moved for an order dismissing the amended claims. On December 1, 1997, the court denied the motion and, on December 16, 1997, defendants filed a supplemental answer denying the remaining
material allegations of the amended complaint. On December 22, 1999, defendants filed a motion for partial summary judgment seeking to dismiss IRI's non-U.S. antitrust claims. On
July 12, 2000, the court granted the motion dismissing claims of injury suffered from activities in foreign markets where IRI operated through subsidiaries or companies owned by joint ventures
or "relationships" with local companies. This ruling is currently on appeal. Discovery is continuing in this matter.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY

None.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock has been listed on the Nasdaq National Market since September 1, 2000, when it began regular way trading on the effective date of our
spin-off. Our Nasdaq National Market symbol is "SNVT." Except for when issued trading, which began on August 30, 2000, prior to September 1, 2000, there was no established
trading market for our common stock. The following table sets forth, for the indicated periods, the high and low closing sales prices for our common stock as reported by the Nasdaq National Market for
all quarters since September 1, 2000.

|                   |                                             | Closing Sales Price
|------------------ | ------------------------------------------- | -------------------
|
|Calendar Year 2000 |                                             |                    
|                   | Third Quarter (beginning September 1, 2000) |                    
|                   | Fourth Quarter                              |                    
|Calendar Year 2001 |                                             |                    
|                   | First Quarter                               |                    
|                   | Second Quarter                              |                    
|                   | Third Quarter                               |                    
|                   | Fourth Quarter                              |                    
|Calendar Year 2002 |                                             |                    
|                   | First Quarter (through March 1, 2002).      |                    

Stockholders

As of March 1, 2002, there were 4,425 holders of record of our common stock.

Dividends

We currently anticipate that we will retain all future earnings for use in our business and do not anticipate that we will pay any cash dividends in the
foreseeable future. The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our results of operations, capital requirements,
general business conditions, contractual restrictions on payment of dividends, if any, legal and regulatory restrictions on the payment of dividends, and other factors our Board of Directors deems
relevant. In addition, our credit facility(See Item 7Liquidity and Capital Resources
Section)prohibits the payment of dividends without prior lender approval.

ITEM 6. SELECTED FINANCIAL DATA

The following data are qualified in their entirety by the audited financial statements of SYNAVANT and other information contained elsewhere in this report. The
financial data as of December 31, 2001, 2000 and 1999 and November 1998 and 1997, and for the years ended December 31, 2001, 2000 and 1999 and November 30, 1998 and 1997
and for the one month period ended December 31, 1998 have been derived from the audited financial statements of SYNAVANT. The historical financial information of SYNAVANT contained in this
report is presented as if SYNAVANT were a separate entity for all periods presented. The following financial data should also be read in conjunction with, and is qualified in its entirety by, the
information set forth under

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"Management's Discussion and Analysis of Financial Condition and Results of Operations" and SYNAVANT's Consolidated Financial Statements and Notes thereto appearing elsewhere in this report.

|                                                               |  |   |         |   |   |          |   |   |         | Years Ended
and as of
November 30,
|-------------------------------------------------------------- |  | - | ------- | - | - | -------- | - | - | ------- | ----------------------------------
|
|
|
|Income Statement Data:                                         |  |   |         |   |   |          |   |   |         |                                   
|Total Revenue                                                  |  | $ | 180,531 |   | $ | 181,439  |   | $ | 200,557 |                                   
|Net Income (Loss)                                              |  | $ | (31,233 | ) | $ | (138,648 | ) | $ | (3,192  | )                                 
|Earnings (Loss) Per Share of Common StockBasic and Diluted(3) |  | $ | (2.09   | ) | $ | (9.32    | ) | $ | (0.20   | )                                 
|Balance Sheet Data:                                            |  |   |         |   |   |          |   |   |         |                                   
|Total Assets                                                   |  | $ | 118,258 |   | $ | 156,499  |   | $ | 268,299 |                                   
|Long-Term Debt                                                 |  |   |        |   |   |         |   |   |        |                                   

---

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact made in this Form 10-K are forward-looking, which can be identified by
the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "estimate," "believe," "continue" or other similar words. Such forward-looking statements are based on
management's current plans and expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
Factors that could cause or contribute to such differences include, but are not limited to: risks associated with competition from other providers of customer relationship management solutions;
customer decisions favoring competitor products, solutions and/or services; the ability to obtain additional financing on satisfactory terms to meet future capital requirements; loss of key personnel;
failure to introduce new or enhanced products in a timely manner; defects in our products and delays related to market adoption of our software; consolidation of the pharmaceutical industry;
fluctuations in quarterly and/or annual operating results that may adversely affect the market price of our common stock; operating on a global basis; the ability to protect our intellectual property;
product infringement claims; the ability to identify, consummate and integrate acquisitions, alliances and ventures on satisfactory terms; the ability to develop new or advanced technologies, systems
or products; the ability to successfully maintain historic effective tax rates; and regulatory, legislative and

17

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enforcement initiatives. These risks and uncertainties are not intended to be exhaustive and should be read in conjunction with other cautionary statements made herein including, but not limited to,
the material set forth herein under the heading "Factors That May Affect Future Performance." The Company assumes no obligation to update any such forward-looking statements.

OVERVIEW

On August 31, 2000, SYNAVANT was spun off from IMS HEALTH, a provider of information solutions to the biopharmaceutical and healthcare industries. Pursuant
to the spin-off, shares of SYNAVANT
common stock were distributed to the shareholders of IMS HEALTH. This transaction was structured as a tax-free dividend to the stockholders of IMS HEALTH, who received one share of
SYNAVANT common stock (together with the associated preferred share purchase right) for every 20 shares of IMS HEALTH common stock held as of the record date for the Distribution.

This
discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and related notes.

SIEBEL ALLIANCE

On July 14, 2000, SYNAVANT entered into a strategic alliance (the "Alliance") with Siebel Systems Inc. ("Siebel"), a leading provider of eBusiness
application software. Through the Alliance, the companies intended to jointly develop, market and sell pharmaceutical and healthcare related versions of Siebel's eBusiness software applications as
part of a joint offering.

As
part of the Alliance, SYNAVANT and Siebel entered into: (1) a Value Added Industry Remarketer Agreement (the "Reseller Agreement"), (2) a Siebel Alliance Program Master
Agreement (the "Alliance Agreement"), and (3) a license of certain Siebel software for SYNAVANT's internal use. Pursuant to the Reseller Agreement, Siebel appointed SYNAVANT as a
non-exclusive distributor of certain Siebel licensed software. Under the Agreement, SYNAVANT had the right to distribute Siebel software products to companies in the life sciences industry
(e.g., pharmaceutical, biotechnology and healthcare companies) worldwide in conjunction with SYNAVANT's own proprietary software and services. As part of the arrangement, Siebel and SYNAVANT shared in
the fees generated from the licensing of the Siebel software when contracted by SYNAVANT as part of a joint offering. The Alliance Agreement has been superceded by a new Siebel Alliance Program Master
Agreement ("the Revised Alliance Agreement") entered into by SYNAVANT and Siebel on December 31, 2001.

Under
the Revised Alliance, SYNAVANT and Siebel have agreed to terminate the Reseller Agreement, revise the Alliance Agreement and to continue the license of certain Siebel software for
SYNAVANT's internal use. In addition to terminating the Reseller Agreement, the Revised Alliance also results in the following:



A
chief difference between this new partner status and the previous one is that SYNAVANT is no longer a Siebel Value Added Reseller ("VAR") and therefore no longer sells Siebel licenses.
This eliminates any channel conflict for license sales, allowing SYNAVANT to concentrate on delivering its

18

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core competencies of consulting, implementation and support services for Siebel technology in a manner that achieves high value. Another important benefit of this new partner status is that SYNAVANT
has additional rights to implement and support Siebel'seMedical,eClinical and ERM applications,
providing a broader revenue opportunity from the life sciences area.

ASSET IMPAIRMENT

In connection with the original Siebel Alliance, SYNAVANT significantly modified its development priorities and discontinued the one remaining Walsh project. As a
result of the Siebel Alliance and the Distribution, the Company assessed the value of Computer Software assets during the third quarter of 2000 and as a result accelerated amortization of
$14.6 million was recorded in the period ended September 30, 2000. The remaining value of Computer Software assets is being amortized over 3 years. In addition, SYNAVANT assessed
the value of Goodwill (which included the Goodwill from the Walsh Acquisition) during the third quarter of 2000. Based on this assessment, an impairment charge of $100.9 million was recorded in
the period ended September 30, 2000. See Note 2 of the Consolidated Financial Statements for further discussion. The Company reduced the remaining period of amortization of goodwill to
its revised estimated useful life of 5 years, which corresponded to the remaining term of the agreement with Siebel. However, in connection with SFAS 142 (See Note 1 of the
Consolidated Financial Statements) the Company will no longer amortize goodwill, but test the goodwill balance for impairment on each balance sheet date and consequently take an impairment charge to
reduce the goodwill balance if appropriate.

CRITICAL ACCOUNTING POLICIES

"Management's Discussion and Analysis of Financial Condition and Results of Operations" are based upon the Company's consolidated financial statements and the
notes thereto, which have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP"). The preparation of these financial statements requires management
to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. On an on-going basis, management evaluates its estimates
and judgments, including those related to revenue recognition, allowance for uncollectible accounts, goodwill and other intangible assets, income taxes, restructuring costs, and litigation.

Management
bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from
those estimates.

The
Company has identified the significant estimates and judgments below as critical to our business operations and the understanding of our results of operations. For a detailed
discussion on the application of these significant estimates and judgments and our accounting policies, also see Note 1 of the Consolidated Financial Statements.

Revenue recognition.The Company recognizes revenues when persuasive evidence of an arrangement exists, services have been
rendered, the price to the buyer is fixed or determinable, and collectibility is reasonably assured. Revenues consist of software license fees, related maintenance and software service fees, database
and information services, and interactive marketing programs. Deferred revenue consists of maintenance billings due in advance of service periods, and other software and project billings for which
services have not yet been completed. The Company's revenue recognition policies are consistent with the guidance in Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements", as amended by SAB No. 101A and 101B, and AICPA Statement

19

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of Position ("SOP") No. 97-2 "Software Revenue Recognition", as amended by SOP Nos. 98-4 and 98-9.

In
cases where services to be provided are not essential to the functionality of the software, the Company has sufficient vendor specific objective evidence ("VSOE") of fair value of the
elements to recognize the revenue separately. The Company has determined the VSOE of its software license fee based on the consistent per user license fee charged to its customers. The VSOE of the
software service element is based on the price of the software services when sold separately. The Company accounts for the maintenance and support element separately using VSOE, which is determined
based on the customer renewal fees for such services.

The
Company's software services derives a portion of its revenue from contracts recorded using the percentage of completion method of accounting based on labor input measures, which
require the accurate estimation of the cost, scope and duration of each engagement. If the Company does not accurately estimate the resources required or the scope of work to be performed, or does not
manage its projects properly within the planned periods of time or satisfy its obligations under the contracts, then future software service margins may be significantly and negatively affected or
losses on existing contracts may need to be recognized. Any such resulting reductions in margins or contract losses could be material to the Company's results of operations. Should changes in
conditions cause management to
determine these criteria are not met for certain future transactions, revenue recognized for any reporting period could be adversely affected.

Allowance for uncollectible accounts.Prior to the recognition of revenue, the Company makes a decision that collectibility
is reasonably assured. Over time management analyzes accounts receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends, and changes in
our customer payment terms and trends when evaluating the adequacy of the allowance for uncollectible accounts receivable. Significant management judgment and estimates must be made and used in
connection with establishing the allowance for uncollectible accounts receivable in any accounting period. The Company provides specific amounts for known individual accounts which have deterioriated
and general amounts for changes that are indicators of future deterioration. The accounts receivable balance was $39.6 million, net of allowance for uncollectible accounts receivable of
$1.9 million as of December 31, 2001. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional
allowances may be required.

Goodwill and other intangible assets.Purchase accounting requires extensive use of accounting estimates and judgments to
allocate the purchase price to the fair market value of the assets and liabilities purchased. The Company evaluates acquired businesses for potential impairment indicators whenever events or changes
in circumstances indicate that the carrying value may not be recoverable. Factors that management consider important, which could trigger an impairment review include, but are not limited to, the
following:



20

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When
the Company determines that the carrying value of long-lived assets, intangibles and related goodwill may not be recoverable based upon the existence of one or more of
the indicators of impairment, the Company recognizes an impairment loss when the sum of undiscounted expected future cash flow is less than the carrying amount of such assets. The impairment loss, if
applicable, is then calculated based on the fair value or the sum of the discounted cash flows compared to the carrying value. The discounted cash flow method using a discount rate determined by
management to be commensurate with the risk inherent in our current business model. See the "Asset Impairment" section of "Management's Discussion and Analysis and Results of Operations" for
discussion of impairments recorded during 2000. Net intangible assets, long-lived assets and goodwill amounted to $60.8 million as of December 31, 2001.

Statement
of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" becomes effective January 1, 2002, and as a result, we will cease to
amortize the remaining $41.2 million of goodwill. The Company recorded approximately $11.7 million of goodwill amortization during 2001. In lieu of amortization, we are required to
perform an initial impairment review of our goodwill in 2002 and a periodic impairment review thereafter. Future events could cause us to conclude that impairment indicators exist and that goodwill
associated with our acquired businesses is impaired. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations. Other intangible assets
with finite lives that do not meet the criteria of SFAS No. 142 will continue to be amortized in accordance with the adoption of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets". This amortization is based on the estimated useful lives of the underlying acquired business or underlying assets. The Company is currently assessing the impact of
these pronouncements and does not expect them to have a material impact on its results of operations and financial condition.

Income taxes.As part of the process of preparing our consolidated financial statements we are required to estimate our taxes
in each of the jurisdictions in which we operate. This process involves management estimating the actual current tax exposure together with assessing temporary differences resulting from differing
treatment of items for tax and US GAAP purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. The Company must then assess
the likelihood that deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent
the Company establishes a valuation allowance or increases this allowance in a period, an expense is recorded within the tax provision in the consolidated statement of operations.

Significant
management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net
deferred tax assets. The net deferred tax asset as of December 31, 2001 is $2.3 million, net of a valuation allowance of $13.5 million. The Company has recorded the valuation
allowance due to uncertainties related to our ability to utilize some of our deferred tax assets, primarily consisting of certain net operating losses carried forward and foreign tax credits, before
they expire. The valuation allowance is based on our estimates of taxable income by jurisdiction in which the Company operates and the period over which our deferred tax assets will be recoverable. In
the event that actual results differ from these estimates
or the Company adjusts these estimates in future periods we may need to establish an additional valuation allowance which could materially impact our financial condition and results of operations.

The
Company also records a reserve for certain international, federal and state tax contingencies based on the likelihood of obligation, when needed. In the normal course of business,
the Company is subject to challenges from U.S. and non-U.S. tax authorities regarding the amount of taxes due. These challenges may result in adjustments of the timing or amount of taxable
income or deductions or the allocation of income among tax jurisdictions. Management believes SYNAVANT has appropriately accrued for tax exposures. If the Company prevails in a matter for which an
accrual has been established or is required to pay an amount exceeding its reserves, the financial impact will be reflected

21

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in the period in which the matter is resolved. In the event that actual results differ from these estimates or the Company adjusts these estimates in future periods we may need to establish an
additional valuation allowance which could materially impact our financial condition and results of operations.

Restructuring costs.The restructuring accruals are based on certain estimates and judgments related to contractual
obligations and related costs. Potential restructuring accruals related to lease contractual obligations could be materially affected by factors such as our ability to secure subleases, the credit-
worthiness of subleases and our success at negotiating early termination agreements with lessors. In the event that actual results differ from these estimates or the Company adjusts these estimates in
future periods we may need to establish an additional restructuring accrual or reverse accrual amounts accordingly.

Legal contingencies.The Company is currently involved in certain legal proceedings as disclosed in Item 3 "Legal
Proceedings". Management has accrued an estimate of the probable costs for the resolution of these claims. This estimate has been developed in consultation with outside counsel handling our defense in
these matters and is based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. The Company does not believe these proceedings will materially affect
SYNAVANT's financial position, although no assurance can be given as to the ultimate outcome of any such proceedings.

The
above listing is not intended to be a comprehensive list of all of our estimates and judgments or accounting policies. In many cases, the accounting treatment of a particular
transaction is specifically dictated by generally accepted accounting principles, with no need for management's judgment in their application. There are also areas in which management's judgment in
selecting any available alternative would not produce a materially different result. See our audited consolidated financial statements and notes thereto which contain accounting policies and other
disclosures required by generally accepted accounting principles.

Year Ended December 31, 2001 Compared with the Year Ended December 31, 2000

REVENUE

Total revenues for the year ended December 31, 2001 declined by less than 1.0% to $180.5 million from $181.4 million for the year ended
December 31, 2000. This decline was primarily due to the impact of currency fluctuations, the divestiture of EMRON and lower Interactive Marketing revenues, offset by higher Software Fees and
Software Services revenue. Excluding the impact of a stronger U.S. Dollar, revenues increased by 1.8%. EMRON, an operating unit of the Interactive Marketing segment, was divested during the fourth
quarter 2000.

SOFTWARE
FEES. Software Fees increased to $11.8 million for the year ended December 31, 2001 from $7.7 million for the year ended December 31, 2000, an
increase of $4.1 million and 53.2%. The increase in Software Fees is primarily due to customer sales representative expansions in North America and revenue from initial Siebel implementations.
Excluding the impact of a stronger U.S. Dollar, Software Fees revenue increased by 55.8%.

SOFTWARE SERVICES.Software Services revenue increased to $90.0 million for the year ended December 31, 2001
from $87.5 million for the year ended December 31, 2000, an increase of $2.5 million and 2.9%. The increase in revenue from Software Services is principally due to implementation
fees that were driven by increased license sales and other custom project work on legacy customer systems. Excluding the impact of a stronger U.S. Dollar, Software Services revenue increased by 4.4%.

22

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INTERACTIVE MARKETING.Interactive Marketing revenue declined to $78.7 million for the year
ended December 31,
2001 from $86.2 million for the year ended December 31, 2000, a decline of $7.5 million and 8.7%. The decline in revenue from Interactive Marketing is primarily due to the
divestiture of EMRON, the impact of a stronger U.S. dollar, a decline in postage rebills and lower volumes in the UK and Australia, partially offset by the inclusion of Pharbase license revenue from
IMS HEALTH in 2001. Excluding the impact of the EMRON divestiture in 2000, a stronger U.S. Dollar, and the inclusion of Pharbase revenue on a consistent basis, Interactive Marketing revenue on the
adjusted basis declined by only 2.5%.

OPERATING COSTS

COST OF SOFTWARE FEES.Cost of Software Fees for the year ended December 31, 2001 was $5.9 million, compared to
$8.8 million for the year ended December 31, 2000, which included accelerated amortization of impaired software of $5.4 million (See discussion of Siebel in "Overview" and
Note 2 of the Consolidated Financial Statements). Excluding the accelerated amortization, the increase in Cost of Software Fees is principally due to increases in third party royalty costs
related to higher Software Fee revenue.

COST OF SOFTWARE SERVICES.Cost of Software Services increased to $67.3 million for the year ended December 31,
2001, from $61.1 million for the year ended December 31, 2000, an increase of $6.2 million. The increase in Cost of Software Services is primarily due to spending in the U.S. and
Europe to improve customer support levels, spending in Europe and Japan to position the Company for future growth in selected markets, costs associated with mobilizing the organization to begin
implementing and supporting the SYNAVANT solution with technology from Siebel and increased hardware and software rebills. The improvement to customer support levels in the U.S. included duplicate
costs incurred in the fourth quarter of 2001 as the Company moved Help Desk support in-house from being outsourced to a third party.

COST OF INTERACTIVE MARKETING.Cost of Interactive Marketing revenue declined 11.5% to $64.5 million for the year
ended December 31, 2001, from $72.9 million for the year ended December 31, 2000. The decline in the Cost of Interactive Marketing is primarily driven by the decline in
Interactive Marketing revenue which declined by 8.7%. A portion of the revenue decline relates to postage costs which are passed through to customers in connection with marketing programs.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT.Research and Development expenses declined by 31.7% to $8.6 million for the year ended
December 31, 2001 from $12.6 million for the year ended December 31, 2000. The decline in research and development costs is principally attributable to a change in development
priorities that were driven by the Siebel Alliance. Development resource levels have been reduced and priorities have been realigned since the Company entered into the Siebel alliance in
July 2000. Although the Company has reinstated its rights to continue development of its legacy products through the Revised Siebel Agreement signed in December 2001, the Company expects
development efforts in the future will continue to be focused on the development of applications that are proprietary to SYNAVANT but that are compatible with the Siebel technology.

SELLING AND ADMINISTRATIVE.Selling and Administrative expenses increased by 4.6% to $34.2 million for the year ended
December 31, 2001 from $32.7 million for the year ended December 31, 2000. The increase in Selling and Administrative expenses is principally due to higher costs associated with
running an independent public company.

DEPRECIATION AND AMORTIZATION.Depreciation and amortization for the year ended December 31, 2001 was
$21.5 million, compared to $135.0 million in 2000, which included an

23

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impairment charge of $110.1 million (See discussion of Siebel in "Overview" and Note 2 of the Consolidated Financial Statements). Excluding this charge, depreciation and amortization
declined by $3.4 million as compared to the year ended December 31, 2000 as the amortizable asset bases decreased as a result of the impairment charge during 2000.

OPERATING LOSS

OPERATING LOSS.Operating loss decreased to $30.1 million for the year ended December 31, 2001 compared with an
Operating loss of $143.8 million for the year ended December 31, 2000. The $113.7 million decrease in operating loss is primarily due to the absence of $115.5 million of
Software and Goodwill impairment charges taken in 2000 and reduced Research and Development costs, partially offset by $7.5 million of restructuring charges in 2001.

RESTRUCTURING

On August 16, 2001, the Company announced that, in an attempt to optimize customer responsiveness and organizational effectiveness, it would simplify its
senior leadership structure as well as eliminate certain other positions in its international and domestic operations. This action resulted in a reduction in personnel by approximately 6% to 8%
worldwide. The Company completed the first two steps in the restructuring process, resulting in the elimination of 100 positions which is reflected in the charge of $7.5 million for 2001. These
reductions included six senior management positions with the remainder being operating, technical and administrative staff. The restructuring charge is composed entirely of employee severance and
separation related costs, such as extended benefits and outplacement fees. Of the $7.5 million charge, $2.6 million was paid during 2001, with the remainder expected to be paid within
the next twelve to twenty-four months. These initiatives are expected to generate savings of between $6.5 million and $7.5 million on an annual basis.

The
Company is currently considering additional restructuring initiatives, primarily related to real estate actions, that could take effect in 2002. The estimated charge of these
additional actions, if executed, would be between $2.5 million and $4.5 million, which would bring total restructuring charges to between $10 million and $12 million. These
proposed actions, not yet executed, would be expected to generate savings of between $0.5 million and $1.5 million, bringing the total annual savings to between $7.0 million and
$9.0 million.

TAXES

The Company's consolidated tax provision, calculated on a separate-company basis, was $0.5 million for the year ended December 31, 2001, compared
with a benefit of $6.4 million for the year ended December 31, 2000. The Company's effective tax rate is different than the U.S. federal statutory tax rate, principally due to the
goodwill amortization resulting from the acquisition of Walsh and certain foreign losses, which are not deductible for tax purposes. The Company recorded a tax benefit in 2000 as deferred tax assets
were utilized to offset existing deferred tax liabilities. As of December 31, 2001, the Company maintains a net deferred tax liability position, primarily as a result of temporary differences
related to computer software.

RESULTS BY GEOGRAPHIC SEGMENT:

THE AMERICAS.Revenue for the year ended December 31, 2001 was $107.3 million compared with
$105.9 million for the year ended December 31, 2000. The increase was due to increased Software Fees and the related implementation Software Services generated from customer sales
representative expansions in North America, partially offset by lower volumes in Interactive Marketing and the
divesture of EMRON. The operating loss for the year ended December 31, 2001 was $31.4 million compared to an operating loss of $139.6 million for the year ended
December 31, 2000 due to the

24

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absence of the accelerated amortization on Computer Software and the Goodwill impairment recorded in the third quarter of 2000 associated with the Siebel Alliance and the Distribution and lower
Interactive Marketing revenues, partially offset by increased Software Fees and Software Services revenue.

EUROPE.Revenue for the year ended December 31, 2001 was $57.3 million compared with $57.2 million for
the year ended December 31, 2000. The revenue increase was offset by the impact of a stronger U.S. Dollar. The operating income for the year ended December 31, 2001 was
$1.5 million compared to an operating loss of $4.3 million for the year ended December 31, 2000. The improvement in operating income is primarily due to the absence of accelerated
amortization on the Goodwill impairment recorded in the third quarter of 2000 associated with the Siebel Alliance and the Distribution.

ASIA PACIFIC.Revenue for the year ended December 31, 2001 declined to $16.0 million compared to
$18.4 million for the year ended December 31, 2000. The $2.4 million decline was attributable to declines in Interactive Marketing revenue in Australia, partially offset by
revenue growth in Japan. Operating income declined from $0.1 million to a loss of $0.2 million for the year ended December 31, 2001.

Year Ended December 31, 2000 Compared with the Year Ended December 31, 1999

REVENUE

Total revenues for the year ended December 31, 2000 declined by 10% to $181.4 million from $200.6 million for the year ended
December 31, 1999. This decline was primarily due to lower Interactive Marketing revenues, lower Software Fees, and the impact of currency. Excluding the impact of a stronger U.S. Dollar,
revenues declined by 5%.

SOFTWARE FEES.Software Fees declined to $7.7 million for the year ended December 31, 2000 from
$12.6 million for the year ended December 31, 1999, a decline of $4.9 million and 39%. The decline in Software Fees is primarily due to delays in customer purchase decisions
during the first half of the year and the impact of the transition to the SYNAVANT/Siebel solution offerings during the second half of the year. Excluding the impact of a stronger U.S. Dollar,
Software Fees revenue declined 34%.

SOFTWARE SERVICES.Software Services revenue declined to $87.5 million for the year ended December 31, 2000
from $91.3 million for the year ended December 31, 1999, a decline of $3.8 million and 4%. The decline in revenue from Software Services is principally due to the impact of
currency, lower implementation fees that were driven by lower license sales and the conversion of certain term contracts to license contracts in Europe during the fourth quarter 1999, which resulted
in lower ongoing revenues, offset by growth in maintenance and other support services revenue. Software Services revenue was essentially unchanged after excluding the impact of a stronger U.S. Dollar.

INTERACTIVE MARKETING.Interactive Marketing revenue declined to $86.2 million for the year ended December 31,
2000 from $96.6 million for the year ended December 31, 1999, a decline of $10.4 million and 11%. The decline in revenue from Interactive Marketing is primarily due to lower
volumes in the US and Australia where overall promotional activity slowed in 2000 and the impact of a stronger U.S. dollar. Excluding the impact of a stronger U.S. Dollar, Interactive Marketing
revenue declined by 6%.

25

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OPERATING COSTS

COST OF SOFTWARE FEES.Cost of Software Fees increased to $8.8 million for the year ended December 31, 2000,
from $3.1 million for the year ended December 31, 1999, an increase of $5.7 million. Of this 182% increase, $5.4 million relates to the accelerated amortization of impaired
software (See discussion of Siebel in "Overview" and Note 2 of the Consolidated Financial Statements). Excluding the accelerated amortization, the increase in Cost of Software Fees is
principally due to increases in certain third party royalty costs. The Company expects these costs to increase in the future as a result of the Reseller Agreement with Siebel.

COST OF SOFTWARE SERVICES.Cost of Software Services increased to $61.1 million for the year ended December 31,
2000, from $39.3 million for the year ended December 31, 1999, an increase of $21.8 million. The increase in Cost of Software Services is primarily due to spending in the US and
Europe to improve customer support levels, spending in Europe and Japan to position the Company for future growth in selected markets, and costs associated with mobilizing the organization to begin
implementing and supporting the new SYNAVANT solution with technology from Siebel. The Company expects these costs to increase in the future as a result of the Reseller Agreement.

COST OF INTERACTIVE MARKETING.Cost of Interactive Marketing revenue declined 8% to $72.9 million for the year ended
December 31, 2000, from $79.3 million for the year ended December 31,
1999. The decline in the Cost of Interactive Marketing is primarily driven by the decline in Interactive Marketing revenue which declined by 11%.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT.Research and Development expenses declined by 5% to $12.6 million for the year ended
December 31, 2000 from $13.2 million for the year ended December 31, 1999. The decline in research and development costs is principally attributable to a change in development
priorities that were driven by the Siebel Alliance. Development resource levels have been reduced and priorities have been realigned since the Company entered into the Siebel alliance in
July 2000. These reductions were partially offset by higher spending during the first half of the year on a new generation of Software products that were to have replaced the existing
PremiereSM and Cornerstone products. Development efforts in the future will be focused on the development of applications that are proprietary to SYNAVANT but that are
compatible with the Siebel technology.

SELLING AND ADMINISTRATIVE.Selling and Administrative expenses declined by 3% to $32.7 million for the year ended
December 31, 2000 from $33.6 million for the year ended December 31, 1999. The decline in Selling and Administrative expenses is principally due to general cost containment
actions and the impact of actions that were taken during 1999 to minimize overhead from the acquisition of Walsh.

DEPRECIATION AND AMORTIZATION.Depreciation and amortization for the year ended December 31, 2000 was
$135.0 million, which included an impairment charge of $110.1 million. Excluding this charge, depreciation and amortization declined slightly compared to the year ended
December 31, 1999.

OPERATING LOSS

OPERATING LOSS.Operating loss increased to $143.8 million for the year ended December 31, 2000 compared with
Operating Income of $3.6 million for the year ended December 31, 1999. The $147.3 million decrease in operating profit is primarily due to $115.5 million of
one-time Software and Goodwill charges, lower revenues, higher operating costs, and $2.2 million of spin-off related costs.

26

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TAXES

The Company's consolidated tax provision, calculated on a separate-company basis, was a benefit of $6.4 million for the year ended December 31,
2000, compared with a provision of $6.5 million for the year ended December 31, 1999. The Company's effective tax rate is different than the U.S. federal statutory tax rate, principally
due to the goodwill amortization resulting from the acquisition of Walsh and certain foreign losses, which are not deductible for tax purposes. The Company recorded a tax benefit in 2000 as a result
of generating domestic deferred tax assets in 2000 that offset existing domestic deferred tax liabilities. As of December 31, 2000, the Company ended up with a net deferred tax asset position
(primarily as a result of net operating losses). The Company has recorded a valuation allowance against the entire amount of this net deferred tax asset.

RESULTS BY GEOGRAPHIC SEGMENT:

THE AMERICAS.Revenue for the year ended December 31, 2000 was $105.9 million compared with
$111.5 million for the year ended December 31, 1999. The decline was largely due to lower volumes in Interactive Marketing and lower license sales as a result of the Siebel alliance. The
operating loss for the year ended December 31, 2000 was $139.6 million compared to an operating loss of $13.2 million for the year ended December 31, 1999 due primarily to
the impact of the accelerated amortization on Computer Software and the Goodwill impairment recorded in the third quarter of 2000 associated with the Siebel alliance and the Distribution, lower
Interactive Marketing and Software License revenues, and higher Cost of Software Services.

EUROPE.Revenue for the year ended December 31, 2000 was $57.2 million compared with $67.3 million for
the year ended December 31, 1999. The decline was largely driven by lower license sales as a result of the Siebel alliance, the conversion of certain term contracts to license contracts during
the fourth quarter 1999, which resulted in lower ongoing revenues and the impact of a stronger U.S. Dollar. The operating loss for the year ended December 31, 2000 was $4.3 million
compared to operating income of $15.8 million for the year ended December 31, 1999 due to lower revenues and higher operating and selling and administrative expenses incurred due to the
impact of the Siebel alliance, increased competition and market pressures.

ASIA PACIFIC.Revenue for the year ended December 31, 2000 declined to $18.4 million compared to
$21.7 million for the year ended December 31, 1999. The $3.3 million decline was attributable to the decline in Australia in Interactive Marketing, partially offset by revenue
growth in Japan. Operating income declined to $0.1 million from $1.0 million for the year ended December 31, 1999.

SELECTED QUARTERLY RESULTS OF OPERATIONS

The following tables present certain unaudited quarterly statements of operations data for each of the last eight quarters. The information has been derived from
our unaudited financial statements, which have been prepared on substantially the same basis as the audited financial statements contained in this 10-K. Certain prior period amounts have
been reclassified to conform with current year-end

27

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presentation. The results of operations for any quarter are not necessarily indicative of the results to be expected for any future period.

|                                 |  | First
Quarter |        | Second
Quarter |   | Third
Quarter |   | Fourth
Quarter |         
|-------------------------------- |  | ------------- | ------ | -------------- | - | ------------- | - | -------------- | --------
|
|2001                             |  |               |        |                |   |               |   |                |         
|Revenues                         |  | $             | 44,078 |                | $ | 46,673        |   | $              | 40,746  
|Gross margin                     |  | $             | 9,793  |                | $ | 9,782         |   | $              | 9,565   
|Net loss                         |  | $             | (9,647 | )              | $ | (6,214        | ) | $              | (12,445 
|Basic and diluted loss per share |  | $             | (0.65  | )              | $ | (0.42         | ) | $              | (0.83   
|2000                             |  |               |        |                |   |               |   |                |         
|Revenues                         |  | $             | 46,188 |                | $ | 47,020        |   | $              | 42,697  
|Gross margin                     |  | $             | 11,960 |                | $ | 12,794        |   | $              | 3,602   
|Net loss                         |  | $             | (8,584 | )              | $ | (1,935        | ) | $              | (118,834
|Basic and diluted loss per share |  | $             | (0.57  | )              | $ | (0.13         | ) | $              | (8.02   

LIQUIDITY AND CAPITAL RESOURCES

On March 6, 2001, the Company entered into a revolving credit facility (the "ABN Facility") with ABN AMRO that was guaranteed by IMS HEALTH. The Company
did not require the use of the Facility, which was terminated by the Company on April 27, 2001 concurrently with the commencement of the stand-alone revolving credit facility with Foothill
Capital Corporation (the "Foothill Facility"), a wholly-owned subsidiary of Wells Fargo & Company.

On
April 27, 2001, SYNAVANT Inc. entered into the Foothill Facility, which has a term of five years with a maximum credit line of $20 million. The available line is
determined based on a percentage of the eligible accounts receivable in the U.S., and typically fluctuates between $5 million and $10 million. Any borrowing against the line will be at a
rate of Prime plus 100 basis points. The Company is required to maintain certain financial covenants relating to earnings, net worth and capital expenditures. The Company has met these financial
covenants for 2001. As of December 31, 2001, the Company has not required the use of the Foothill Facility. The Company filed a Form 8-K on May 8, 2001 related to the
Foothill Facility.

Concurrent
with the Foothill Facility, IMS HEALTH has agreed to defer any payments associated with the Distribution Liabilities (See Note 14 of the Consolidated Financial
Statements) until January 1, 2005. In addition, SYNAVANT and IMS HEALTH also agreed in principal to resolutions on other outstanding matters in connection with the Distribution relating to the
Company's cash balances at the time of the Distribution, the transfer of the Company's Scriptrac businesses in Canada and Australia to IMS HEALTH, the transfer of IMS HEALTH's Call Reporting
businesses in Latin America to the Company and the formalization of real estate leases between the Company and IMS HEALTH. The resolution of these matters did not result in any additional charge to
the Company's Statement of Operations.

We
currently estimate that our cash and working capital needs for the next twelve months can be met by cash on hand, amounts available under our credit facility, and cash flow from
operations. If our expectations change due to market conditions, strategic opportunities or otherwise, then our capital requirements may vary materially from those currently anticipated.

28

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USES OF LIQUIDITY

Our cash requirements through the end of 2002 are primarily to fund working capital requirements, capital expenditures, research and development, workforce
reductions and restructuring activities. The Company's contractual obligations and commitments are as follows:

December 31,
2001Current obligations:Operating lease commitments

$
10,000Capital lease commitments


250Restructuring commitments


4,716Long term obligations:Operating lease commitments


39,523Capital lease commitments


550Distribution liability due to former parent


9,000Restructuring commitments


100Total contractual obligations

$
64,139


For
further discussion of the above contractual obligations and commitments, refer to Notes 7, 10 and 11 of the Consolidated Financial Statements. The following provides additional
information related to our uses of liquidity:

Working Capital Requirements.The Company is projecting revenue growth rates in 2002 of 3% to 5% excluding the impact of
foreign currency fluctuations. This expansion will require some use of working capital to fund accounts receivable and costs associated with work performed on behalf of customers in advance of
receiving payments from customers. The actual rate of growth will determine the amount of working capital required.

Capital Expenditures.The Company incurs capital expenditures as part of the normal course of business to replenish computer
and office equipment that no longer meets minimal acceptable performance requirements or has become obsolete. In addition, the Company expects to incur capital expenditures in 2002 associated with the
relocation of certain facilities in the U.S. and the U.K., as well as the acquisition of assets required to re-tool our productions areas to more effectively support customers that utilize
software products from Siebel.

Workforce Reductions and Restructuring.The Company has taken restructuring actions in 2001 that have created liabilities
that will be settled in 2002 and 2003. The expenditures in 2002 that will relate to actions taken in 2001 are expected to total $4.7 million. In addition, the Company is attempting to
rationalize its real estate assets in the U.S., which could result in additional charges and additional payments in 2002. It is currently uncertain whether these additional real estate transactions
will occur.

In
addition to these short term cash requirements, the Company has a significant cash requirement in 2005 related to the Distribution Liabilities (See Note 10 of the Consolidated
Financial Statements) that could significantly impact the company's cash position. The Company currently expects this liability to be $9.0 million and is due on January 1, 2005.

CASH FLOWS

Net cash used in operating activities totaled $8.9 million for the year ended December 31, 2001 compared with net cash provided by operating
activities of $5.7 million for the year ended December 31, 2000. The decline of $14.6 million primarily reflects higher General and Administrative costs in 2001 associated with
being an independent public company, restructuring payments made during the year and the absence of certain customer prepayments in 2001.

29

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Net
cash used in investing activities totaled $0.9 million for the year ended December 31, 2001 compared with $9.6 million for the year ended December 31,
2000. The decline in cash usage of $8.7 million was primarily due to lower spending on software development as a result of the Siebel Alliance and cash proceeds from the sale of marketable
securities during 2001.

Net
cash used in financing activities totaled $0.3 million for the year ended December 31, 2001 compared with net cash provided of $19.9 million for the year ended
December 31, 2000. The decrease was primarily due to the absence of cash contributions received from IMS HEALTH through the Distribution Agreement.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NON-U.S. OPERATING AND MONETARY ASSETS

SYNAVANT operates globally, deriving 43.7%, 45.2% and 48.1% of its revenues in 2001, 2000 and 1999, respectively, from non-U.S. operations. As a
result, fluctuations in the value of foreign currencies relative to the U.S. dollar may increase the volatility of U.S. dollar operating results.

Non-U.S.
monetary assets are maintained in currencies other than the U.S. dollar, principally those of the Euro, the Pound Sterling and the Australian dollar. Changes in the
value of these currencies relative to the U.S. dollar are charged or credited to stockholders' equity. The effect of exchange rate changes during the year ended December 31, 2001 decreased the
U.S. dollar amount of cash and cash equivalents by $0.2 million.

MARKET RISK

SYNAVANT's primary market risk is the impact of foreign exchange fluctuations on non-functional currency assets and liabilities.

SYNAVANT
engages in limited hedging arrangements to protect against currency fluctuations for specific transactions it intends to convert to US dollars.

It
is the Company's policy to enter into foreign currency transactions only to the extent necessary to meet its objectives as stated above. Foreign currency transactions are not entered
into for investment or speculative purposes.

SYNAVANT
held no hedging instruments as of December 31, 2001 and 2000. While SYNAVANT was a part of IMS HEALTH, SYNAVANT engaged in hedging. The fair value of IMS HEALTH's hedging
instruments related to SYNAVANT was $4.8 million at December 31, 1999. Prior to the spin, the Company assessed its market risk based on changes in foreign exchange rates utilizing a
sensitivity analysis. The sensitivity analysis measured the potential loss in fair values based on a hypothetical 10% change in currency rates. The potential loss in fair value for foreign exchange
rate-sensitive instruments, all of which were forward foreign currency contracts, based on a hypothetical 10% decrease in the value of the U.S. dollar or, in the case of nondollar-related
instruments, the currency being purchased, was $0.2 million at December 31, 1999. The estimated fair values of the foreign exchange risk management contracts were determined based on
quoted market prices.

30

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

SYNAVANT Inc.    Index to Financial Statements

|                                                                        |  | Page
|----------------------------------------------------------------------- |  | ----
|Report of PricewaterhouseCoopers LLP, Independent Accountants           |  | 32  
|Consolidated Balance Sheets                                             |  | 33  
|Consolidated Statements of Operations                                   |  | 34  
|Consolidated Statements of Cash Flows                                   |  | 35  
|Consolidated Statements of Stockholders Equity and Comprehensive Income |  | 36  
|Notes to Consolidated Financial Statements                              |  | 37  

31

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REPORT OF INDEPENDENT ACCOUNTANTS

To
The Board of Directors of SYNAVANT Inc.:

In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in stockholders' equity and cash flows present fairly, in all
material respects, the financial position of SYNAVANT Inc. (the "Company") at December 31, 2001 and 2000, and the results of its operations and its cash flows for the years ended
December 31, 2001, 2000 and 1999 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/PRICEWATERHOUSECOOPERS LLPPricewaterhouseCoopers LLP
Atlanta, Georgia
February 15, 2002

32

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SYNAVANT Inc.        CONSOLIDATED BALANCE SHEETS        Dollar amounts in thousands, except share and per share data

|                                           |                                                                                                                                                      | December 31,
2001 |         | December 31,
2000 |  
|------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------- | ----------------- | -
|ASSETS                                     |                                                                                                                                                     
|CURRENT ASSETS:                            |                                                                                                                                                      |                   |         |                   |  
|                                           | Cash and cash equivalents                                                                                                                            |                   | $       | 9,578             |  
|                                           | Accounts receivablenet                                                                                                                              |                   |         | 39,574            |  
|                                           | Other receivables                                                                                                                                    |                   |         | 209               |  
|                                           | Other current assets                                                                                                                                 |                   |         | 6,113             |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL CURRENT ASSETS                       |                                                                                                                                                      |                   | 55,474  |                   |  
|                                           | Property, plant and equipmentnet                                                                                                                    |                   |         | 11,210            |  
|                                           | Computer softwarenet                                                                                                                                |                   |         | 7,410             |  
|                                           | Goodwillnet                                                                                                                                         |                   |         | 41,156            |  
|                                           | Long term notes receivable                                                                                                                           |                   |         | 1,000             |  
|                                           | Other assets                                                                                                                                         |                   |         | 2,008             |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL LONG TERM ASSETS                     |                                                                                                                                                      |                   | 62,784  |                   |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL ASSETS                               |                                                                                                                                                      | $                 | 118,258 |                   | $
|                                           |                                                                                                                                                      |                   |         |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                                                                                                                     
|CURRENT LIABILITIES:                       |                                                                                                                                                      |                   |         |                   |  
|                                           | Accounts payable                                                                                                                                     |                   | $       | 11,557            |  
|                                           | Accrued restructuring                                                                                                                                |                   |         | 4,816             |  
|                                           | Accrued and other current liabilities                                                                                                                |                   |         | 11,248            |  
|                                           | Accrued income taxes                                                                                                                                 |                   |         | 1,885             |  
|                                           | Deferred revenue                                                                                                                                     |                   |         | 8,388             |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL CURRENT LIABILITIES                  |                                                                                                                                                      |                   | 37,894  |                   |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|                                           | Deferred taxes                                                                                                                                       |                   |         | 421               |  
|                                           | Accrued distribution liability due to former parent                                                                                                  |                   |         | 9,000             |  
|                                           | Other liabilities                                                                                                                                    |                   |         | 793               |  
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL LIABILITIES                          |                                                                                                                                                      |                   | 48,108  |                   | $
|                                           |                                                                                                                                                      |                   |         |                   |  
|                                           | Commitments and contingencies                                                                                                                        |                   |         |                   |  
|                                           | Minority interest                                                                                                                                    |                   |         |                  |  
|STOCKHOLDERS' EQUITY:                      |                                                                                                                                                      |                   |         |                   |  
|                                           | Common stock, par value $.01, authorized 41,000,000 shares; 15,059,684 and 14,861,599 shares outstanding at December 31, 2001 and 2000, respectively |                   |         | 150               |  
|                                           | Additional paid-in-capital                                                                                                                           |                   |         | 112,980           |  
|                                           | Retained deficit                                                                                                                                     |                   |         | (40,311           | )
|                                           | Accumulated other comprehensive loss                                                                                                                 |                   |         | (2,669            | )
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL STOCKHOLDERS' EQUITY                 |                                                                                                                                                      | $                 | 70,150  |                   | $
|                                           |                                                                                                                                                      |                   |         |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                                                                                      | $                 | 118,258 |                   | $
|                                           |                                                                                                                                                      |                   |         |                   |  

See
accompanying Notes to the Consolidated Financial Statements.

33

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SYNAVANT Inc.        CONSOLIDATED STATEMENTS OF OPERATIONS        Dollar amounts in thousands, except share and per share data

|                                                       |                       | Years Ended |           
|------------------------------------------------------ | --------------------- | ----------- | ----------
|
|REVENUES                                               |                       |             |           
|                                                       | Software fees         |             | $         
|                                                       | Software services     |             |           
|                                                       | Interactive marketing |             |           
|                                                       |                       |             |           
|TOTAL REVENUES                                         |                       |             | 180,531   
|                                                       |                       |             |           
|OPERATING COSTS                                        |                       |             |           
|                                                       | Software fees         |             |           
|                                                       | Software services     |             |           
|                                                       | Interactive marketing |             |           
|                                                       |                       |             |           
|TOTAL OPERATING COSTS                                  |                       |             | 137,691   
|                                                       |                       |             |           
|Research and development                               |                       |             | 8,569     
|Selling and administrative expenses                    |                       |             | 34,171    
|Restructuring costs                                    |                       |             | 7,456     
|Depreciation and amortization                          |                       |             | 21,461    
|Year 2000 costs                                        |                       |             |          
|Spin related costs                                     |                       |             | 1,289     
|                                                       |                       |             |           
|OPERATING INCOME (LOSS)                                |                       |             | (30,106   
|                                                       |                       |             |           
|Other expense, net                                     |                       |             | (605      
|                                                       |                       |             |           
|INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES        |                       |             | (30,711   
|                                                       |                       |             |           
|Income tax (provision) benefit                         |                       |             | (522      
|                                                       |                       |             |           
|NET LOSS                                               |                       |             | (31,233   
|                                                       |                       |             |           
|Net loss per share of common stock: basic and diluted  |                       | $           | (2.09     
|Weighted average shares outstanding: basic and diluted |                       |             | 14,934,731

See
accompanying Notes to the Consolidated Financial Statements.

34

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SYNAVANT Inc.        CONSOLIDATED STATEMENTS OF CASH FLOWS        Dollar amounts in thousands

|                                                                                |                                                              | December 31,
2001 |        | December 31,
2000 |   | December 31,
1999 |         
|------------------------------------------------------------------------------- | ------------------------------------------------------------ | ----------------- | ------ | ----------------- | - | ----------------- | --------
|CASH FLOWS FROM OPERATING ACTIVITIES:                                           |                                                              |                   |        |                   |   |                   |         
|                                                                                | Net Loss                                                     |                   | $      | (31,233           | ) | $                 | (138,648
|Adjustments to reconcile net loss to net cash provided by operating activities: |                                                              |                   |        |                   |   |                   |         
|                                                                                | Depreciation and amortization                                |                   |        | 21,461            |   |                   | 135,041 
|                                                                                | Amortization of capitalized computer software                |                   |        | 2,068             |   |                   | 7,364   
|                                                                                | Loss on sale of marketable equity securities                 |                   |        | 913               |   |                   |        
|                                                                                | Restructuring expense                                        |                   |        | 7,456             |   |                   |        
|                                                                                | Restructuring payments                                       |                   |        | (2,640            | ) |                   |        
|                                                                                | Deferred income taxes                                        |                   |        | (9                | ) |                   | (6,148  
|Changes in operating assets and liabilities:                                    |                                                              |                   |        |                   |   |                   |         
|                                                                                | Accounts receivable                                          |                   |        | 3,630             |   |                   | 1,599   
|                                                                                | Accounts payable                                             |                   |        | 141               |   |                   | 2,904   
|                                                                                | Accrued and other liabilities                                |                   |        | (2,360            | ) |                   | (1,139  
|                                                                                | Accrued income taxes                                         |                   |        | (2,065            | ) |                   | 174     
|                                                                                | Deferred revenue                                             |                   |        | (4,492            | ) |                   | 7,013   
|                                                                                | Other                                                        |                   |        | (1,753            | ) |                   | (2,480  
|                                                                                |                                                              |                   |        |                   |   |                   |         
|NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES                             |                                                              |                   | (8,883 | )                 |   | 5,680             |         
|                                                                                |                                                              |                   |        |                   |   |                   |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                           |                                                              |                   |        |                   |   |                   |         
|                                                                                | Capital expenditures                                         |                   |        | (2,956            | ) |                   | (4,240  
|                                                                                | Additions to computer software                               |                   |        | (685              | ) |                   | (6,496  
|                                                                                | Sale of marketable equity securities                         |                   |        | 3,084             |   |                   |        
|                                                                                | Payments for acquisition of business, net of cash acquired   |                   |        |                  |   |                   |        
|                                                                                | Acquisition and integration payments                         |                   |        |                  |   |                   |        
|                                                                                | Other                                                        |                   |        | (309              | ) |                   | 1,141   
|                                                                                |                                                              |                   |        |                   |   |                   |         
|NET CASH USED IN INVESTING ACTIVITIES                                           |                                                              |                   | (866   | )                 |   | (9,595            | )       
|                                                                                |                                                              |                   |        |                   |   |                   |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                           |                                                              |                   |        |                   |   |                   |         
|                                                                                | Payments for deferred loan fees                              |                   |        | (195              | ) |                   |        
|                                                                                | Payments for capital leases                                  |                   |        | (93               | ) |                   |        
|                                                                                | Net transfers from/(to) IMS HEALTH                           |                   |        |                  |   |                   | 19,945  
|                                                                                |                                                              |                   |        |                   |   |                   |         
|NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES                             |                                                              |                   | (288   | )                 |   | 19,945            |         
|                                                                                |                                                              |                   |        |                   |   |                   |         
|                                                                                | Effect of exchange rate changes on cash and cash equivalents |                   |        | (153              | ) |                   | 274     
|                                                                                | Increase (Decrease) in cash and cash equivalents             |                   |        | (10,190           | ) |                   | 16,304  
|                                                                                | Cash and cash equivalents, beginning of period               |                   |        | 19,768            |   |                   | 3,464   
|                                                                                |                                                              |                   |        |                   |   |                   |         
|                                                                                | Cash and cash equivalents, end of period                     |                   | $      | 9,578             |   | $                 | 19,768  
|                                                                                |                                                              |                   |        |                   |   |                   |         

Supplemental disclosure of cash flow information:

Excluded from the 2001 and 2000 Consolidated Statements of Cash Flows are certain non-cash asset and liability
transfers in accordance with the distribution agreement totaling approximately $0.3 million and $15.3 million, respectively, which are recorded in Additional paid-in capital
(See Note 14).

Non-cash financing activities in 2001 include capital leases of $0.8 million and non-cash
investing activities in 1999 include the acquisition of Walsh International, Inc. for Cognizant common stock and options.

Cash payments for foreign, state and local income taxes were $2.7 million, $4.3 million and
$4.7 million for the years ended December 31, 2001 and 2000, 1999, respectively. See accompanying Notes to the Consolidated Financial Statements.SYNAVANT Inc.

See accompanying Notes to the Consolidated Financial Statements.

35

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SYNAVANT Inc.        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY        AND COMPREHENSIVE INCOME        Dollar amounts in thousands

|                                                 |  |   |          | Common Stock |        |  |   |     |  |   |         |   |  
|------------------------------------------------ |  | - | -------- | ------------ | ------ |  | - | --- |  | - | ------- | - | -
|
|Balance, December 31, 1998                       |  | $ | 217,559  |              |       |  | $ |    |  | $ |        |   | $
|Net loss                                         |  |   | (3,192   | )            |        |  |   |     |  |   |         |   |  
|Net transfer from IMS HEALTH                     |  |   | 7,433    |              |        |  |   |     |  |   |         |   |  
|Effect of foreign currency translation           |  |   |          |              |        |  |   |     |  |   |         |   |  
|                                                 |  |   |          |              |        |  |   |     |  |   |         |   |  
|Balance, December 31, 1999                       |  |   | 221,800  |              |       |  |   |    |  |   |        |   |  
|Net transfer from IMS HEALTH                     |  |   | 19,945   |              |        |  |   |     |  |   |         |   |  
|Net loss prior to Spin                           |  |   | (128,974 | )            |        |  |   |     |  |   |         |   |  
|Effect of Spin from IMS HEALTH                   |  |   | (112,771 | )            | 14,832 |  |   | 148 |  |   | 112,623 |   |  
|Effect of foreign currency translation           |  |   |          |              |        |  |   |     |  |   |         |   |  
|Unrealized loss on securities available for sale |  |   |          |              |        |  |   |     |  |   |         |   |  
|Issuance of common stock                         |  |   |          |              | 30     |  |   |    |  |   | 128     |   |  
|Net loss subsequent to Spin                      |  |   |          |              |        |  |   |     |  |   |         |   |  
|                                                 |  |   |          |              |        |  |   |     |  |   |         |   |  
|Balance, December 31, 2000                       |  |   |         |              | 14,862 |  |   | 148 |  |   | 112,751 |   |  
|Net loss                                         |  |   |          |              |        |  |   |     |  |   |         |   |  
|Effect of Spin from IMS HEALTH                   |  |   |          |              |        |  |   |     |  |   | (290    | ) |  
|Effect of foreign currency translation           |  |   |          |              |        |  |   |     |  |   |         |   |  
|Unrealized loss on securities available for sale |  |   |          |              |        |  |   |     |  |   |         |   |  
|Issuance of common stock                         |  |   |          |              | 198    |  |   | 2   |  |   | 519     |   |  
|                                                 |  |   |          |              |        |  |   |     |  |   |         |   |  
|Balance, December 31, 2001                       |  | $ |         |              | 15,060 |  | $ | 150 |  | $ | 112,980 |   | $

See accompanying Notes to the Consolidated Financial Statements.

36

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SYNAVANT Inc.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization.On August 31, 2000, IMS HEALTH INCORPORATED ("IMS HEALTH") completed the spin off of
SYNAVANT Inc. ("SYNAVANT or the "Company") to its stockholders (the "Distribution" or "Spin"). As a result of the Spin, SYNAVANT became a separate legal entity. The Company serves the
biopharmaceutical and healthcare industries by implementing and supporting pharmaceutical-specific customer relationship management (CRM) solutions, developing interactive marketing programs and
medical professional databases and offering strategic consulting services that support clinical research, sales and marketing decision-making and program implementation. SYNAVANT is composed of the
automated sales and marketing support businesses which were formerly part of IMS HEALTH, which operated under the name of IMS HEALTH Strategic Technologies, Inc. ("ST"); certain other former
foreign subsidiaries of IMS HEALTH; substantially all of IMS HEALTH's interactive and direct marketing businesses, including the business of Clark-O'Neill, Inc. ("Clark O'Neill"), formerly a
wholly owned subsidiary of IMS HEALTH; and a 51% interest in Permail Pty., Ltd. ("Permail"). Shares of SYNAVANT were distributed to shareholders of IMS HEALTH following the conveyance of assets
and stock of entities comprising the SYNAVANT business into SYNAVANT Inc., a Delaware corporation. In connection with the Spin, the Company and IMS HEALTH entered into a Distribution Agreement
dated August 31, 2000 that described certain matters related to the transaction (See Note 14 of the Consolidated Financial Statements).

The
Company operated as a business unit of IMS HEALTH through the eight months ended August 31, 2000, the year ended December 31, 1999, the one month ended
December 31, 1998 and the year ended November 30, 1998 ("Respective Periods"). The financial statements during the Respective Periods have been prepared using IMS HEALTH's historical
basis in the assets and liabilities and historical results of operations related to the Company's business, which were all under the common control of IMS HEALTH. The financial statements generally
reflect the financial position, results of operations, and cash flows of the Company as if it were a separate entity for all periods presented.

The
financial statements include allocations of certain IMS HEALTH corporate and other expenses (including cash management, legal, accounting, tax, employee benefits, insurance services,
data services and other corporate overhead) relating to the Company's business for the Respective Periods. Management believes the methods used to allocate these costs are reasonable. The financial
statements exclude allocations of revenues and costs for related party transactions with IMS HEALTH as it relates to the licensing of data, except for the periods post Spin which include costs
consistent with agreements executed in connection with the Spin. The financial information for the Respective Periods included herein may not necessarily reflect the financial position, results of
operations, and cash flows of the Company in the future or what they would have been if the Company had been a separate entity during the periods presented.

Reclassifications.Certain prior period amounts have been reclassified to conform with current year-end
presentation.

Consolidation.The consolidated financial statements of the Company include the accounts of the Company, after elimination of
all material intercompany accounts and transactions within the SYNAVANT consolidated group.

Cash and Cash Equivalents.The Company considers all highly liquid investments with a maturity of 90 days or less at
the time of purchase to be cash equivalents.

37

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Property and Equipment.Buildings and equipment are depreciated over their estimated useful lives of 40 and 3 to
5 years, respectively, using the straight-line method. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the
estimated useful life of the improvement. Maintenance and repairs are charged to expense as incurred. Upon retirement or sale, the costs of the assets disposed and the related accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in the determination of operating results.

Computer Software.Direct costs incurred in the development of computer software are capitalized in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed". Research and development costs incurred to establish
technological feasibility of a computer software product are expensed in the periods in which they are incurred and are included in Research and Development in the consolidated Statements of
Operations. Research and development expense totaled $8.6 million, $12.6 million, and $13.2 million for the years ended December 31, 2001, 2000 and 1999, respectively.
Capitalization ceases and amortization starts when the product is available for general release to customers. Computer Software costs for developed software are being amortized, on a
product-by-product basis, over three years. Annual amortization is equal to capitalized computer software costs times the greater of (a) the
ratio of a product's current gross revenues to the total of current and expected gross revenues or (b) one-third.

Goodwill.Goodwill represents the excess of purchase price over the fair value of identifiable net assets of businesses
acquired and has been amortized on a straight-line basis over five years (subsequent to the Distribution) through December 31, 2001. However, in accordance with SFAS 142 (See
Note 1), the Company will no longer amortize goodwill but will continue to assess the recoverability of goodwill at each balance sheet date and record an impairment loss if applicable. Prior to
the Distribution, Goodwill was being amortized over 5 to 40 years (See Note 2). Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable, the Company reviews the recoverability of goodwill, not identified with impaired long-lived assets, based on estimated undiscounted future cash flows from operating activities
compared with the carrying value of goodwill and recognizes any impairment on the basis of such comparison. The impairment loss, if applicable, is then calculated based on the sum of the discounted
cash flows compared to the carrying value. The recognition and measurement of goodwill impairment is assessed at the business unit level or on an enterprise-wide basis, as applicable.

Other Long-Lived Assets.In accordance with the provisions of SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed of", the Company reviews long-lived assets and certain identifiable intangibles held and used for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In general, this statement requires recognition of an impairment loss when
the sum of undiscounted expected future cash flow is less than the carrying amount of such assets. The impairment loss, if applicable, is then calculated based on the sum of the discounted cash flows
compared to the carrying value. Accordingly, the Company recognizes impairment losses on long-lived assets in the period in which the review is performed.

38

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Revenue Recognition.The Company recognizes software license fee revenue in accordance with AICPA Statement of Position
No. 97-2 "Software Revenue Recognition" ("SOP 97-2"). The Company generally sells its software licenses under multiple element arrangements together with services. These
arrangements include instances where services are essential to the functionality of the software and instances where they are not. In cases where services to be provided are not essential to the
functionality of the software, the Company has sufficient vendor specific objective evidence of fair value ("VSOE") of the elements to recognize the revenue separately. The Company has determined the
VSOE of its software license fee based on the consistent per user license fee charged to its customers. The VSOE of the software service element is based on the price of the software services when
sold separately. The Company accounts for the maintenance and support element separately using VSOE, which is determined based on the customer renewal fees for such services. The Company recognizes
the software license fees under this type of arrangement upon delivery. Additionally, software license revenue is recognized upon delivery when a customer purchases additional licenses and the
Company's system has been installed at the customer's site. The Company does not recognize any license fees unless the product has been delivered, persuasive evidence of an arrangement exists, the
license fee amount is fixed and determinable and collectability is probable. Where services are considered essential to the functionality of the software, the Company recognizes software license fee
and services revenue
over the service period using the percentage of completion method based on labor inputs. The service period commences subsequent to execution of a license agreement and ends when the product
configuration is complete and implemented in the field. Costs of software license fees consist primarily of amortization of development costs capitalized under SFAS No. 86 and third-party
royalties.

Revenues
from software services, maintenance and other services including the PharbaseSM products, are recognized as the services are performed. The Company provides
certain consulting and post-implementation customization services which are under short-term arrangements. Revenues related to fixed fee consulting arrangements are recognized
as the service is performed using the percentage of completion method of accounting based on labor input measures. The Company's customers typically purchase maintenance and support services
concurrently with software. Revenues from customer maintenance, support services, and data server rental agreements are recognized on a straight-line basis over the term of the agreement.
In the event that hardware is part of the customer solution, the Company configures the hardware by installing its applications and recognizes the related hardware revenue and costs upon delivery to
the customer and acceptance, if applicable. Hardware amounts are not significant and are included in software services costs. The Company also sells certain software under term license arrangements
(primarily outside the U.S.) combined with post contract support and related data server/network management and other services. The Company recognizes all fees for these arrangements ratably over the
term of the agreement, typically three years with annual renewal provisions. Revenue recognized under these arrangements does not exceed amounts billed and due within one year. Costs of software
services, maintenance and other services consists primarily of salaries, benefits and allocated overhead costs related to implementation, technical support, development, training, and customer support
personnel.

Revenue
from interactive marketing services is recognized on delivery of the product or when the services are rendered. In connection with the Company's interactive marketing services,
the Company recognizes postage, handling and other direct third party costs charged separately to its customers as revenue with the related expenses included in operating costs in the accompanying
financial statements.

39

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Interactive marketing revenues and operating costs include revenue and costs from postage, handling and other third party costs totaling $23.4 million, $25.3 million and
$28.0 million for the years ended December 31, 2001, 2000 and 1999, respectively.

Deferred
revenues arise primarily as a result of annual billings of software maintenance fees at the beginning of maintenance terms and billings of software license fees in accordance
with contractual terms that may not correlate directly with the delivery of software, products or services. The amount of deferred revenue will increase and decrease based on the timing of billings
and related recognition of software license revenues. Unbilled accounts receivable arise as a result of revenues earned under contractual arrangements for products delivered prior to the related
billings to the customer. The Company generally bills the customer for these amounts within 90 days.

Foreign Currency Translation.The Company has significant operations in non-U.S. countries. Therefore, changes in
the value of foreign currencies affect the Company's combined financial statements when translated into U.S. dollars.

For
all operations outside the United States where the Company has designated the local currency as the functional currency, assets and liabilities are translated using
end-of-period exchange rates; revenues and expenses are translated using average rates of exchanges. For these countries, currency translation adjustments are accumulated in a
separate component of stockholders equity, whereas realized transaction gains and losses are recognized in other expensenet. For operations in countries that are considered to be highly
inflationary, or where the U.S. dollar is designated as the functional currency, monetary assets and liabilities are translated using end-of-period exchange rates, whereas
non-monetary accounts are translated using historical exchange rates, and all translation and transaction adjustments are recognized in other expensenet.

Income Taxes.The results of the Company have been included in the consolidated Federal and certain state and
non-U.S. income tax returns of IMS HEALTH and Cognizant for the Respective Periods. The provision for income taxes in the Company's consolidated financial statements has been determined as
if SYNAVANT was a separate company during the Respective Periods. Income taxes deemed paid on behalf of the Company by IMS HEALTH and Cognizant for the Respective Periods are included in Divisional
Equity. Effective after the Distribution, the Company files separate income tax returns.

Income
taxes are provided using the asset and liability method in accordance with SFAS No. 109, "Accounting for Income Taxes". Deferred tax assets and liabilities are recognized
based on the estimated realizable differences between the book and tax bases of assets and liabilities using presently enacted tax rates. The provision for income taxes is the sum of the amount of
income tax paid or payable for the year as determined by applying the provisions of enacted tax laws to taxable income for that year and the net changes during the year in the Company's deferred tax
assets and liabilities.

We
have recorded valuation allowances of $13.5 million and $8.2 million as of December 31, 2001 and 2000, respectively, related to the Company's deferred tax assets
because we believe that it is unlikely that such assets will be realized. However, ultimate realization could be impacted by market conditions or other variables not known at this time. We will
continue to assess the valuation allowance and to the extent it is determined that such allowance is no longer required, the tax benefit of the remaining net deferred tax asset may be recognized in
the future.

40

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Divisional Equity.Divisional Equity includes historical loans and advances to/from IMS HEALTH, including net transfers
to/from IMS HEALTH, third-party liabilities paid by IMS HEALTH on behalf of the Company and amounts due to/from IMS HEALTH for services and other charges, periodic net income (loss) and foreign
currency translation adjustments through the Respective Periods up to the distribution date.

Estimates.The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results
could differ from those estimates. Estimates are used for, but not limited to, the accounting for: allowance for uncollectible accounts receivable, depreciation and amortization periods, employee
benefit plans, income taxes, purchase price allocations, and allocation of IMS HEALTH corporate and other costs.

Earnings Per Share.Basic earnings per share are calculated by dividing net income (loss) by the weighted average common
shares of SYNAVANT. Diluted earnings per share are calculated by dividing net income (loss) by dilutive potential common shares and weighted average common shares of SYNAVANT. Dilutive potential
common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all SYNAVANT employee options are used to repurchase SYNAVANT common stock
at market value. The amount of shares remaining after the proceeds are exhausted represent the potentially dilutive effect of the options. Where the company has recorded a loss, dilutive potential
common shares are not included in the calculation of diluted loss as to do so would be antidilutive.

Recently Issued Accounting Standards.In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142 "Goodwill and other Intangibles". Under these new standards the FASB eliminated accounting for certain mergers and acquisitions as poolings of interests, eliminated amortization of
goodwill and indefinite life intangible assets, and established new impairment measurement procedures for goodwill. For the Company, the standards become effective for all acquisitions completed on or
after June 30, 2001. Changes in financial statement treatment for goodwill and intangible assets arising from mergers and acquisitions completed prior to June 30, 2001 become effective
January 1, 2002.

In
June of 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." The statement provides accounting and reporting standards for recognizing obligations
related to asset retirement costs associated with the retirement of tangible long-lived assets. Under this statement, legal obligations associated with the retirement of
long-lived assets are to be recognized at their fair value in the period in which they are incurred if a reasonable estimate of fair value can be made. The fair value of the asset
retirement costs is capitalized as part of the carrying amount of the long-lived asset and subsequently allocated to expense using a systematic and rational method over the assets' useful
life. Any subsequent changes to the fair value of the liability due to the passage of time or changes in the amount or timing of estimated cash flows is recognized as an accretion expense. The Company
will be required to adopt this statement no later then January 1, 2003.

In
October of 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which is effective for fiscal years beginning after
December 15, 2001. This

41

---

statement supercedes FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." However, it retains the
fundamental provisions of SFAS No. 121 for the recognition and measurement of the impairment of long-lived assets to be held and used
and the measurement of long-lived assets to be disposed of by sale. Impairment on Goodwill is not included in the scope of SFAS No. 144 and will be treated in accordance with the
accounting standards established in SFAS No. 142, "Goodwill and Other Intangible Assets." According to SFAS No. 144, long-lived assets are measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing or discontinued operations. The statement applies to all long-lived assets, including discontinued operations, and
replaces the provisions of APB Opinion No. 30, "Reporting the Results of Unusual and Infrequently Occurring Events and Transactions", for the disposal of segments of a business. The Company
will be required to adopt this statement no later than January 1, 2002.

The
Company is currently assessing the impact of implementing these recently issued statements on its results of operations, financial position and cash flows.

NOTE 2.    SIEBEL ALLIANCE AND ASSET IMPAIRMENT

On July 14, 2000, SYNAVANT entered into a strategic alliance (the "Alliance") with Siebel Systems Inc. ("Siebel"), a leading provider of eBusiness
application software. Through the Alliance, the companies intended to jointly develop, market and sell pharmaceutical and healthcare related versions of Siebel's eBusiness software applications as
part of a joint offering.

As
part of the Alliance, SYNAVANT and Siebel entered into: (1) a Value Added Industry Remarketer Agreement (the "Reseller Agreement"), (2) a Siebel Alliance Program Master
Agreement (the "Alliance Agreement"), and (3) a license of certain Siebel software for SYNAVANT's internal use. Pursuant to the Reseller Agreement, Siebel appointed SYNAVANT as a
non-exclusive distributor of certain Siebel licensed software. Under the Agreement, SYNAVANT had the right to distribute Siebel software products to companies in the life sciences industry
(e.g., pharmaceutical, biotechnology and healthcare companies) worldwide in conjunction with SYNAVANT's own proprietary software and services. As part of the arrangement, Siebel and SYNAVANT shared in
the fees generated from the licensing of the Siebel software when contracted by SYNAVANT as part of a joint offering. The Alliance Agreement has been superceded by a new Siebel Alliance Program Master
Agreement ("the Revised Alliance Agreement") entered into by SYNAVANT and Siebel on December 31, 2001.

Under
the Revised Alliance, SYNAVANT and Siebel have agreed to terminate the Reseller Agreement, revise the Alliance Agreement and to continue the license of certain Siebel software for
SYNAVANT's internal use. In addition to terminating the Reseller Agreement, the Revised Alliance also results in the following:



42

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A
chief difference between this new partner status and the previous one is that SYNAVANT is no longer a Siebel Value Added Reseller ("VAR") and therefore no longer sells Siebel licenses.
This eliminates any channel conflict for license sales, allowing SYNAVANT to concentrate on delivering its core competencies of consulting, implementation and support services for Siebel technology in
a manner that achieves high value. Another important benefit of this new partner status is that SYNAVANT has additional rights to implement and support Siebel's eMedical,eClinical and ERM applications, providing a broader revenue opportunity from the life sciences
area.

As
a result of the original Alliance and the Distribution, the Company believed that a significant portion of its computer software (including acquired technology) and
enterprise-wide goodwill was not recoverable. The Company completed its assessments of the financial impact of the Siebel alliance and the Distribution with respect to determining the
amount of the accelerated amortization of capitalized software and the impairment of enterprise-wide goodwill. The Company performed a net realizable value analysis to determine the
recoverability of its capitalized software assets (including acquired technology). Based on this analysis, the Company recorded $14.6 million of accelerated amortization, in the period ended
September 30, 2000 related to costs determined to be unrecoverable. The analysis took into consideration the impact of the Siebel alliance and the Distribution on the in-process
technology and core technology resulting from the Walsh acquisition in 1998. As a result of the Alliance, the remaining Walsh In-Process Research and Development project has been
discontinued and the core technology has been incorporated into the net realizable value analysis. This non-cash charge of $14.6 million is included in the Consolidated Statements
of Operations in Software Fee Operating Costs ($5.4 million) and Depreciation and Amortization ($9.2 million) for the year ended December 31, 2000. The Company will continue to
amortize the remaining costs over the period of expected benefit and will continue to assess the recoverability of its capitalized software in accordance with its accounting policies. The remaining
value of its Computer Software assets is being amortized over 3 years. Under its accounting policy for goodwill impairment, the Company completed a discounted cash flow analysis on an
enterprise-wide basis, resulting in an impairment charge of $100.9 million for the year ended December 31, 2000. In addition, the Company reduced its remaining period of
amortization of goodwill to 5 years, which represented its revised estimated useful life and was also consistent with the remaining term of the original agreement with Siebel. However, in
connection with the issuance of SFAS 142(See Note 1 Recently Issued Accounting Standards), the Company will no longer amortize goodwill
effective
January 1, 2002, but will test the balance for impairment on each balance sheet date and consequently record an impairment charge to reduce the goodwill balance, if appropriate.

NOTE 3.    FINANCIAL INSTRUMENTS

Foreign Exchange Risk Management

The Company transacts business in many countries and is subject to risks associated with changing foreign exchange rates. During the Respective Periods, through
IMS HEALTH, the Company entered into various contracts which change in value as foreign exchange rates change to protect the value of non-functional currency assets and liabilities. IMS
HEALTH allocated contracts to the Company relating to specific balance sheet exposures at each balance sheet date during the Respective Periods. The Company's policy was to maintain hedge coverage
between minimum and maximum percentages of its anticipated foreign exchange exposures over the subsequent year. However, the Company has ceased to engage in these contracts subsequent to the
Distribution. The gains and losses on these hedges offset

43

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changes in the value of the related exposures. Total foreign exchange gains (losses), including gains (losses) on these hedges, were $0.2 million, $(0.9) million and ($0.2) million for the
years ended December 31, 2001, 2000 and 1999, respectively. Gains and losses on contracts hedging non-functional currency assets and liabilities are included in operating results in
other income (expense) for the applicable periods.

Prior
to the Distribution, the Company used forward contracts to hedge non-functional currency assets and liabilities. At December 31, 2001 and 2000 the Company had $0
in foreign exchange forward contracts. At December 31, 1999, the Company had approximately $4.8 million in foreign exchange forward contracts outstanding with various expiration dates
through January 2000 hedging non-functional currency assets and liabilities. The estimated fair values of the foreign exchange risk management contracts were determined based on
quoted market prices.

Fair Value of Financial Instruments

At December 31, 2001, the Company's financial instruments included cash, cash equivalents, and accounts receivable. At December 31, 2001, the fair
values of cash, cash equivalents, and accounts receivable approximated carrying values due to the short-term nature of these instruments.

Credit Concentrations

The Company continually monitors its positions with, and the credit quality of, the financial institutions that are counterparties to its financial instruments
and does not anticipate non-performance by the counterparties. The Company enters into transactions only with financial institution counterparties that have a credit rating of A or better.
In addition, the Company limits the amounts of credit exposure with any one institution.

The
Company maintains accounts receivable balances principally from customers in the pharmaceutical industry. Management believes the Company's trade receivables do not represent
significant concentrations of credit risk at December 31, 2001 due to the high quality of its customers and their dispersion across many geographic areas. These receivable balances are
unsecured. The Company believes its allowance for uncollectible accounts is sufficient to provide for any risk of credit losses.

NOTE 4.    EMPLOYEE BENEFIT PLANS

U.S. Benefit Plans

For the Respective Periods, certain domestic employees of SYNAVANT participated in IMS HEALTH's defined benefit pension plan. The plan was a cash balance pension
plan under which 6% of creditable compensation plus interest was credited to eligible employee's retirement accounts on a monthly basis. At the time of retirement, the vested employee's account
balance is actuarially converted into an annuity. The Company accounted for the plan as a multi-employer plan. The Company recorded pension expense related to its employees participation in the IMS
HEALTH plan, as allocated totaling $0.3 million for the period ended August 31, 2000, and $0.5 million the year ended December 31, 1999.

In
addition, certain U.S. based employees of the Company were eligible to participate in IMS HEALTH's various healthcare and life insurance plans for retired employees. Employees based
in the

44

---

United States become eligible for benefits or participation under these plans if they work for the Company for 10 years after attaining age 45. The Company accounted for the plans as
multi-employer plans. Accordingly, the cost of the post-retirement benefit plans as allocated by IMS HEALTH during the period ended August 31, 2000, and the year ended
December 31, 1999 were $0.2 million for each of these periods. These plans have provided healthcare and life insurance coverage to the SYNAVANT employees up through the Distribution
whereafter SYNAVANT has provided similar coverage.

Substantially
all U.S. based employees were eligible to participate in IMS HEALTH-sponsored defined contribution plans during the Respective Periods. In the plans, the sponsoring
employer makes a matching contribution of up to 50% of the employee's contribution based on specified limits of the employee's salary. The Company's expense related to these plans was
$0.5 million and $0.8 million for the period ended August 31, 2000 and the year ended December 31, 1999, respectively.

Immediately
following the Spin of the Company, employee participation in the IMS HEALTH defined benefit plan, various healthcare and life insurance plans for retired employees and the
defined contribution plan were discontinued. The Company formed the SYNAVANT 401(k) Retirement Savings Plan and various healthcare and life insurance plans.

In
August 2000, the Company formed the SYNAVANT 401(k) Retirement Savings Plan (401(k) Plan) in which eligible employees can participate. The Company matches 50% of the first 6%
of salary contributed by the participant. In addition and at the discretion of the Company, SYNAVANT may also make a contribution to the 401(k) Plan equal to 3% of the employee's annual compensation.
Also, for participants who meet certain other criteria, the Company may make an additional contribution of 2% of the employee's annual compensation. The Company provides retiree medical coverage to
eligible employees who were covered under the IMS HEALTH plans. The Company's contribution on behalf of participating employees in the 401(k) Plan is $1.3 million and $0.4 million for
the years ended December 31, 2001 and 2000, respectively.

Non-U.S. Benefit Plans

The Company's foreign operations provide for retirement benefits in line with local statutory requirements.

NOTE 5.    EMPLOYEE STOCK PLANS

Prior to the Spin, the SYNAVANT employees participated in the IMS HEALTH Stock Incentive Plans. At the time of the Spin, stock options held by SYNAVANT employees
were adjusted to reflect an equity interest in SYNAVANT. An adjustment factor was applied to all existing IMS HEALTH stock options to preserve the economic value of such options. A total of 3,573,789
IMS HEALTH stock options were adjusted to reflect an equity interest in 7,352,518 options of SYNAVANT. Additionally, 833,000 stock options were granted by SYNAVANT after the spin off in fiscal year
2000.

Some
options granted under IMS HEALTH carried a prepayment provision whereby optionees paid 10% of the exercise price, with the remaining payment due when the options are exercised. On
January 3, 2000, IMS HEALTH reduced the vesting period on substantially all options previously
granted with a six-year vesting period to four years. As a result, 373,064 previously unvested options with exercise prices ranging from $15.79 to $27.15 became vested.

45

---



NOTE 5.    EMPLOYEE STOCK PLANS (Continued)

Immediately
following the Spin of the Company, outstanding awards under the IMS HEALTH Stock Incentive Plans and other option plans related to key employees of the Company were cancelled
and replaced by substitute awards under SYNAVANT option plans. The terms of the new plans are similar to the IMS HEALTH plans.

SYNAVANT Plans

The Company has two stock incentive plans in which employees can participate, (a) the Stock Incentive Plan; and (b) the Employee Stock Purchase
Plan.

Stock Incentive Plan

In August 2000, SYNAVANT adopted the 2000 Stock Incentive Plan ("SIP"). The SIP provides for grants of stock options, stock appreciation rights, and other
stock-based awards, such as restricted stock and restricted stock units. Shareholders have authorized the Company to grant up to 1,600,000 shares under the Plan. As of December 31, 2001,
1,296,000 options have been granted and are outstanding with 304,000 shares remaining available for future grants. Stock options granted under the SIP were granted with an exercise price not less than
fair market value on the date of grant based on our closing stock price as reported on the NASDAQ national securities exchange. Further, options expire after 10 years from the date of grant,
and generally vest pro rata over three years.

Restricted
stock units may be granted to select executives under the SIP. Restricted stock units are granted upon achievement of specific performance goals and the fair market value of
such restricted stock units is calculated at the time of the grant and amortized over the vesting period of the award. The Company has recognized compensation expense related to the issuance of
restricted stock units of $0.2 million, $0.1 million and $0.2 million for the years ended December 31, 2001, 2000 and 1999, respectively.

Employee Stock Purchase Plan

In August 2000, the Company adopted the 2000 SYNAVANT Incorporated Employee Stock Purchase Plan ("ESPP"). The ESPP allows eligible employees to purchase a
limited amount of Company stock at the end of a three-month period at a fixed price. Employees may contribute between 1% and 20% of their compensation, up to a total of $25,000 per year. The purchase
price is the lesser of 85% of fair market value on (a) the first trading day of the offering period, or (b) the last trading day of the offering period. Fair market value is defined as
the average of the high and low traded stock prices on the relevant day. Under the ESPP, the Company sold 165,684 shares to employees in 2001.

SFAS
No. 123, "Accounting for Stock-Based Compensation", requires that companies with stock-based compensation plans either recognize compensation expense based on the fair value
of options granted or continue to apply the existing accounting rules and disclose pro forma net income and earnings per share assuming the fair value method had been applied. The Company has chosen
to continue applying Accounting Principles Board Opinion No. 25 ("APB No. 25") and related interpretations in accounting for its stock incentive plans. No compensation cost has been
recognized for the fixed stock option plans in 2001, 2000 and 1999, respectively. Had compensation cost for the SYNAVANT stock incentive plans been determined based on the fair value at the grant
dates for

46

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awards under those plans, consistent with the method of SFAS No. 123, the Company's net loss and loss per share would have been increased to the pro forma amounts indicated below:

|                                  |             | Years Ended |  
|--------------------------------- | ----------- | ----------- | -
|
|Net Loss:                         |             |             |  
|                                  | As reported |             | $
|                                  | Pro forma   |             | $
|Loss Per ShareBasic and Diluted: |             |             |  
|                                  | As reported |             | $
|                                  | Pro forma   |             | $

The
impact of the change in vesting mentioned above accelerated the pro forma fair value charge for previously vested options reflected in the pro forma EPS disclosures required by SFAS
No. 123, thereby significantly increasing the 2000 pro forma SFAS No. 123 earnings charge when compared to the actual reported amount in prior periods. Under APB No. 25, there is
no charge to the Consolidated Statement of Operations for this change.

The
fair value of the IMS HEALTH stock options used to compute pro forma net income and earnings per share disclosures is the estimated present value at grant date using the
Black-Scholes option pricing model. The following weighted-average assumptions were used for options issued during 2001: dividend yield of 0.0%; expected volatility of 85%; a risk-free
interest rate of 3.14% and an expected term of 3 years. The weighted-average fair value (per stock option) of the SYNAVANT stock options granted in 2001 is $1.67. The following weighted-average
assumptions were used for options issued from August 31 to December 31, 2000: dividend yield of 0.0%; expected volatility of 65%; a risk-free interest rate of 5.8%; and an
expected term of 3 years. The following weighted-average assumptions were used for options issued from January 1 to August 31, 2000; dividend yield 0.3%; expected volatility of
40%; a risk-free interest rate of 5.9%; and an expected term of 3 years. The weighted-average fair value (per stock option) of the SYNAVANT stock options granted in 2000 prior to
the Spin is $20.56 and options granted from August 31 to December 31, 2000 is $5.52. The following weighted-average assumptions were used for 1999: dividend yield of 0.3%; expected
volatility of 35%; a risk-free interest rate of 4.8%; and an expected term of 3 years. The weighted average fair value (per stock option), of the
SYNAVANT stock options granted in the 1999 are $9.68. The assumptions used for the periods prior to the Spin are based on circumstances and factors associated with IMS HEALTH, particularly expected
volatility. They may not be indicative of those which SYNAVANT may have as an independent company.

At
December 31, 2001, outstanding options for SYNAVANT common stock held by Company employees, totaled 8,409,486 of which 5,443,952 had vested and were exercisable. The option
exercise prices range from $2.60 to $15.14 per SYNAVANT share and are exercisable over periods ending no later than 2011. At December 31, 2000, outstanding options for SYNAVANT common stock
held by Company employees, totaled 7,989,165, of which 3,301,824 had vested and were exercisable. The option exercise prices range from $4.44 to $15.14 per IMS HEALTH share and are exercisable over
periods ending no later than 2010. At December 31, 1999, outstanding options for IMS HEALTH common stock held by Company employees, including the awards mentioned above, totaled 3,532,448, of
which 1,024,226 had vested and were exercisable. The option exercise prices ranged from $9.89 to $31.15 per

47

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IMS HEALTH share and are exercisable over periods ending no later than 2009. Unless otherwise noted, the disclosure above and described in the tables below are reflected as IMS HEALTH shares and have
not been restated to reflect the 1 for 20 distribution ratio.

Option
activity related to Company employees follows:

|                                                    |  | IMS HEALTH
Shares |   | Weighted Average
Exercise Price
|--------------------------------------------------- |  | ----------------- | - | -------------------------------
|IMS HEALTH Options Outstanding, December 31, 1998   |  | 3,232,712         |   | $                              
|Conversion Adjustment                               |  | 473,932           |   |                                
|Granted                                             |  | 1,274,696         |   | $                              
|Exercised                                           |  | (330,485          | ) | $                              
|Expired/Terminated                                  |  | (1,118,407        | ) | $                              
|                                                    |  |                   |   |                                
|IMS HEALTH Options Outstanding, December 31, 1999   |  | 3,532,448         |   | $                              
|Employees retained by IMS HEALTH                    |  | (922,283          | ) |                                
|Granted                                             |  | 987,700           |   | $                              
|Exercised                                           |  | (23,205           | ) | $                              
|Expired/Terminated                                  |  | (871              | ) | $                              
|                                                    |  |                   |   |                                
|IMS HEALTH Options Outstanding, August 31, 2000 (1) |  | 3,573,789         |   | $                              
|Conversion Adjustment                               |  | 3,778,729         |   |                                
|Granted                                             |  | 833,000           |   | $                              
|Exercised                                           |  |                  |   |                                
|Expired/Terminated                                  |  | (196,353          | ) | $                              
|                                                    |  |                   |   |                                
|SYNAVANT Options Outstanding, December 31, 2000 (1) |  | 7,989,165         |   | $                              
|Granted                                             |  | 1,232,500         |   | $                              
|Exercised                                           |  |                  |   |                                
|Expired/Terminated                                  |  | (812,179          | ) | $                              
|                                                    |  |                   |   |                                
|SYNAVANT Options Outstanding, December 31, 2001     |  | 8,409,486         |   | $                              
|                                                    |  |                   |   |                                

---

|                  |  | December 31, 2001 |  |           |  | Weighted-Average
Option Exercise Prices
|----------------- |  | ----------------- |  | --------- |  | ---------------------------------------
|
|
|$  2.60  $  4.43 |  | 1,097,000         |  |          |  | 10.0                                   
|$  4.44  $  7.00 |  | 931,640           |  | 316,752   |  | 8.0                                    
|$  7.01  $10.00  |  | 2,261,597         |  | 2,120,261 |  | 5.2                                    
|$10.01  $13.00   |  | 2,188,740         |  | 1,429,103 |  | 7.7                                    
|$13.01  $15.14   |  | 1,930,509         |  | 1,577,836 |  | 7.0                                    
|                  |  |                   |  |           |  |                                        
|Total             |  | 8,409,486         |  | 5,443,952 |  |                                        
|                  |  |                   |  |           |  |                                        

48

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NOTE 6.    INCOME TAXES

Income
(Loss) before provision (benefit) for income taxes consisted of:

|        |  | 2001 |         | 2000 |   | 1999     |  
|------- |  | ---- | ------- | ---- | - | -------- | -
|U.S.    |  | $    | (21,360 | )    | $ | (149,137 | )
|Non-U.S |  |      | (9,351  | )    |   | 4,079    |  
|        |  |      |         |      |   |          |  
|        |  | $    | (30,711 | )    | $ | (145,058 | )
|        |  |      |         |      |   |          |  

Income
tax provision (benefit) consisted of:

|                        |  | 2001 |     | 2000 |   | 1999    |  
|----------------------- |  | ---- | --- | ---- | - | ------- | -
|U.S. Federal and State: |  |      |     |      |   |         |  
|Current                 |  | $    |    |      | $ | (3,596  | )
|Deferred                |  |      |    |      |   | (6,834  | )
|                        |  |      |     |      |   |         |  
|                        |  | $    |    |      | $ | (10,430 | )
|                        |  |      |     |      |   |         |  
|Non-U.S.:               |  |      |     |      |   |         |  
|Current                 |  | $    | 529 |      | $ | 4,020   |  
|Deferred                |  |      | (7  | )    |   |        |  
|                        |  |      |     |      |   |         |  
|                        |  | $    | 522 |      | $ | 4,020   |  
|                        |  |      |     |      |   |         |  
|Total                   |  | $    | 522 |      | $ | (6,410  | )
|                        |  |      |     |      |   |         |  

The
following table summarizes the significant differences between applying the U.S. Federal statutory income tax rate to the Company's income (loss) before provision (benefit) for
income taxes and the Company's reported provision for income taxes.

|                                                         |  | 2001 |         | 2000 |   | 1999    |  
|-------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Tax provision applying the federal statutory rate        |  | $    | (10,749 | )    | $ | (50,770 | )
|State and local income taxes, net of federal tax benefit |  |      | (882    | )    |   | (5,331  | )
|Impact of non-U.S. tax rates and credits                 |  |      | 1,310   |      |   | 1,538   |  
|Non-deductible goodwill amortization                     |  |      | 4,436   |      |   | 43,881  |  
|Other, net                                               |  |      | 1,061   |      |   | 223     |  
|Valuation allowance                                      |  |      | 5,346   |      |   | 4,049   |  
|                                                         |  |      |         |      |   |         |  
|Provision (benefit) for income taxes                     |  | $    | 522     |      | $ | (6,410  | )
|                                                         |  |      |         |      |   |         |  

49

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The
Company's deferred tax assets (liabilities) are comprised of the following:

|                           |                          | 2001 |         | 2000   |  
|-------------------------- | ------------------------ | ---- | ------- | ------ | -
|Deferred Tax Assets:       |                          |      |         |        |  
|                           | U.S. operating losses    |      | $       | 3,168  |  
|                           | Foreign operating losses |      |         | 9,133  |  
|                           | Accrued liabilities      |      |         | 2,462  |  
|                           | Depreciation             |      |         | 508    |  
|                           | Bad debt reserve         |      |         | 473    |  
|                           | Other                    |      |         | 106    |  
|                           |                          |      |         |        |  
|                           |                          |      | 15,850  |        |  
|Valuation allowance        |                          |      | (13,542 | )      |  
|                           |                          |      | 2,308   |        |  
|                           |                          |      |         |        |  
|Deferred Tax Liabilities:  |                          |      |         |        |  
|                           | Computer software        |      |         | (2,308 | )
|                           | Other                    |      |         | (421   | )
|                           |                          |      |         |        |  
|                           |                          |      | (2,729  | )      |  
|                           |                          |      |         |        |  
|Net deferred tax liability |                          | $    | (421    | )      | $
|                           |                          |      |         |        |  

At
December 31, 2001, the Company had net operating losses for Federal Income tax purposes of $6.3 million, which begin to expire in 2020. In addition, the Company has
foreign net operating loss carryforwards of $20.0 million. The Company has established a valuation allowance attributable to deferred tax assets, primarily net operating losses where, based on
available evidence, it is more likely than not that such assets will not be realized. If realized, utilization of Walsh pre-acquisition net operating losses, in the amount of approximately
$2.4 million, will be reflected as a reduction of the associated goodwill and not as a tax benefit in the Consolidated Statement of Operations.

Undistributed
earnings of non-U.S. subsidiaries aggregated approximately $27.8 million at December 31, 2001. Deferred tax liabilities have not been recognized
for these undistributed earnings because the Company considers these earnings to be indefinitely reinvested. If such earnings are repatriated in the future, or are no longer deemed to be indefinitely
reinvested, applicable taxes will be provided for such amounts. It is not currently practicable to determine the amount of such taxes.

NOTE 7.    COMMITMENTS

Certain of the Company's operations are conducted from leased facilities under operating leases. Rental expense under real estate operating leases for the years
ended December 31, 2001, 2000 and 1999 was $8.5 million, $6.9 million and $5.4 million, respectively. The minimum annual rental expense for real estate operating leases
that have initial or remaining noncancelable lease terms in excess of one year, at December 31, 2001 was: 2002$8.2 million; 2003$6.6 million;
2004$6.1 million; 2005$5.7 million; 2006$5.3 million and an aggregate of $14.3 million thereafter.

The
Company also leases or participates in leases of certain computer and other equipment under operating leases. These leases are frequently renegotiated or otherwise changed as
advancements in computer technology produce opportunities to lower costs and improve performance. Rental expense

50

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under computer and other equipment leases was $2.3 million, $1.6 million and $3.0 million for the years ended December 31, 2001, 2000 and 1999, respectively. At
December 31, 2001, the minimum annual rental expense for computer and other equipment under operating leases that have remaining noncancelable lease terms in excess of one year was:
2002$1.8 million; 2003$0.9 million; 2004$0.5 million; 2005$0.1 million; 2006$17,850; and $5,400 thereafter.

The
Company also leases or participates in leases of certain computer and other equipment under capital leases. Capital expenditures under computer and other equipment leases was
$0.9 million for December 31, 2001. The related depreciation associated with these capital leases was $0.1 million for the year ended December 31, 2001. At
December 31, 2001, the minimum annual payments for computer and other equipment under operating leases that have remaining noncancellable lease terms in excess of one year was:
2002$0.3 million; 2003$0.3 million; 2004$0.2 million; 2005$0.1 million; 2006$0.

On
December 10, 1999, the Company sold its 49% interest in Permail Pty Limited ("Permail") for its approximate net book value. Prior to this transaction, the Company owned a 100%
interest in Permail. Subsequent to the transaction, the Company continues to maintain a majority voting interest and control in Permail. Under the terms of the shareholders' deed entered into as part
of the sale, the Company and the minority interest holder are committed to seek a buyer of Permail under certain circumstances within five years. This commitment does not prohibit the Company from
retaining its ownership stake in Permail and buying the shares held by the minority shareholder. As of December 31, 2001, Permail's net assets totaled $0.1 million and revenues for the
year ended December 31, 2001 totaled $5.9 million.

NOTE 8.    RELATIONSHIPS WITH IMS HEALTH

As part of the Distribution SYNAVANT and IMS HEALTH entered into a Corporate Services agreement whereby IMS HEALTH provided certain tax, treasury and transaction
processing services to the Company in exchange for a fee. Such services are reflected in the financial results of the Company in the period following the Distribution. During 2001, the Company
cancelled the tax and treasury processing services provided by IMS HEALTH.

The
Company contracts for information technology consulting services from Cognizant Technology Solutions ("CTS"), a subsidiary of IMS HEALTH. Expense recognized for services rendered by
CTS was $1.8 million, $2.8 million and $2.2 million for the years ended December 31, 2001, 2000 and 1999, respectively.

Net
transfers to or from IMS HEALTH are included in Divisional Equity and include advances and loans from affiliates, net cash transfers to or from IMS HEALTH, third-party liabilities
paid by IMS HEALTH on behalf of the Company, amounts due to or from IMS HEALTH for services and other
charges, and U.S. income taxes paid on behalf of the Company by IMS HEALTH during the Respective Periods. No interest cost was charged on these transactions or the net balance.

51

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NOTE 8.    RELATIONSHIPS WITH IMS HEALTH (Continued)

The activity in the net transfers to IMS HEALTH account for all Respective Periods presented in Divisional Equity in the Consolidated Statements of Changes in
Stockholders' Equity is summarized as follows:

Period Ended
August 31,
2000

Year Ended
December 31,
1999IMS HEALTH Services and Other Charges

$
5,585

$
8,378Loans and AdvancesNet





2,613U.S. Income Taxes


(3,596
)

460Cash TransfersNet


17,956


(4,018
)Net Transfers (to)/from IMS HEALTH

$
19,945

$
7,433


The
Company and IMS HEALTH share the use of certain information databases. The databases Xponent (owned by IMS HEALTH) and PharbaseSM (owned by the Company) contain
information related to prescription drug trends and physicians, respectively. The companies sell information from these databases to their customers. Prior to the Distribution, the Company and IMS
HEALTH had not charged one another for the use of these databases. The Company and IMS HEALTH entered into an agreement as part of the Distribution whereby each of the companies charge one another an
annual negotiated fee for the use of the databases. (See Note 14).

NOTE 9.    GOODWILL AND COMPUTER SOFTWARE:

Computer
Software

GoodwillDecember 31, 1999

$
30,429

$
167,363Additions at Cost


6,496


Amortization


(8,583
)

(12,270
)Accelerated amortization and goodwill impairment (See Note2)


(14,553
)

(100,900
)Other deductions and reclassifications


(759
)

(1,302
)December 31, 2000

$
13,030

$
52,891Additions at Cost


685


Amortization


(6,305
)

(11,735
)Other deductions and reclassifications





December 31, 2001

$
7,410

$
41,156


Accumulated
amortization of computer software was $57.7 million and $51.4 million at December 31, 2001 and 2000, respectively. The amortization has been recorded in
the Consolidated Statement of Operations within the cost of Software Fees (2001$2.1 million; and 2000$7.4 million) and Depreciation and Amortization
(2001$4.2 million; and 2000$15.8 million).

Accumulated
amortization of goodwill was $160.7 million and $149.0 million at December 31, 2001 and 2000, respectively. The goodwill impairment charge of
$100.9 million in 2000 is included within Depreciation and Amortization in the Consolidated Statement of Operations. In accordance with

52

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SFAS 142 (See Note 1), the Company will no longer amortize goodwill but will continue to assess the recoverability of goodwill at each balance sheet date and record an impairment loss
if applicable.

NOTE 10.    CONTINGENCIES

SYNAVANT has from time to time been involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the
outcome of all current proceedings, claims and litigation will not materially affect SYNAVANT's consolidated financial position.

In
addition, as discussed below, SYNAVANT is subject to certain other contingencies of which it is jointly and severally liable with IMS HEALTH. However, IMS HEALTH and SYNAVANT have
agreed that SYNAVANT's share of such liabilities will not exceed $9.0 million, and IMS HEALTH has agreed to indemnify SYNAVANT for any liability it incurs in connection with such contingent
liabilities in excess of such amount. In the event that IMS HEALTH does not fulfill such indemnification obligations, SYNAVANT could be liable for an amount in excess of $9.0 million in
connection with such contingent liabilities. While it is highly unlikely, in the event that SYNAVANT were obligated to fund a substantial portion of such liabilities, it would have a material adverse
effect on SYNAVANT's financial condition and results of operations. In addition, SYNAVANT and IMS HEALTH have agreed that SYNAVANT will not be required to make any payment in connection with this
commitment until at least January 1, 2005.

Dun & Bradstreet Spin-Off

Under the terms of the distribution agreements relating to the 1996 spin-off of IMS HEALTH's predecessor, Cognizant Corporation ("Cognizant"), from
The Dun & Bradstreet Corporation ("D&B") and relating to the 1998 spin of IMS HEALTH from Cognizant, as a condition to the distribution, IMS HEALTH and any company that it spins off, including
SYNAVANT, are required to undertake to be jointly and severally liable to D&B, A.C. Nielsen Company and Cognizant for IMS HEALTH's obligations under the 1996 Distribution Agreement and the 1998
Distribution Agreement. Such
obligations include potential tax liability relating to the aforementioned spin-offs and relating to certain global tax planning initiatives entered into by Cognizant, D&B and IMS HEALTH,
and potential liability relating to the IRI Action. Certain of such liabilities are discussed below:

Information Resources Litigation

On July 29, 1996, Information Resources, Inc. ("IRI") filed a complaint in the United States District Court for the Southern District of New York,
naming as defendants D&B, A.C. Nielsen and I.M.S. International Inc. (a predecessor of IMS HEALTH) (the "IRI Action"). The complaint alleges various violations of the United States antitrust
laws, including alleged violations of Sections 1 and 2 of the Sherman Act. The complaint also alleges a claim of tortious interference with a contract and a claim of tortious interference with a
prospective business relationship. These latter claims relate to the acquisition by defendants of Survey Research Group Limited ("SRG"). IRI alleges that SRG violated an alleged agreement with IRI
when it agreed to be acquired by defendants and that the defendants induced SRG to breach that agreement. IRI's complaint alleges damages in excess of $350.0 million, which amount IRI has asked
to be trebled under the antitrust laws. IRI also seeks punitive damages in an unspecified amount. On October 15, 1996, defendants moved for an order dismissing all claims in the complaint. On
May 6, 1997, the United States District Court for the Southern District of New York

53

---

issued a decision dismissing IRI's claim of attempted monopolization in the United States, with leave to replead within sixty days. The Court denied defendants' motion with respect to the remaining
claims in the complaint. On June 3, 1997, defendants filed an answer denying the material allegations in IRI's complaint, and A.C. Nielsen Company filed a counterclaim alleging that IRI has
made false and misleading statements about its services and commercial activities. On July 7, 1997, IRI filed an amended and restated complaint repleading its alleged claim of attempted
monopolization in the United States and realleging its other claims. On August 18, 1997, defendants moved for an order dismissing the amended claims. On December 1, 1997, the court
denied the motion and, on December 16, 1997, defendants filed a supplemental answer denying the remaining material allegations of the amended complaint. On December 1, 1997, the court
denied the motion and, on December 16, 1997, defendants filed a supplemental answer denying the remaining material allegations of the amended complaint. On December 22, 1999, defendants
filed a motion for partial summary judgment seeking to dismiss IRI's non-U.S. antitrust claims. On July 12, 2000, the court granted the motion dismissing claims of injury suffered
from activities in foreign markets where IRI operated through subsidiaries or companies owned by joint ventures or "relationships" with local companies. This ruling is currently under appeal.
Discovery is continuing in this matter.

In
light of the potentially significant liabilities which could arise from the IRI Action and in order to facilitate the distribution by D&B of shares of Cognizant and A.C. Nielsen
Company in 1996 (the "1996 Spin-Off"), D&B, AC Nielsen (the parent company of A.C. Nielsen Company) and Cognizant entered into an Indemnity and Joint Defense Agreement pursuant to which
they agreed (i) to certain arrangements allocating liabilities that may arise out of or in connection with the IRI Action, and (ii) to conduct a joint defense of such action. In
particular, the Indemnity and Joint Defense Agreement provides that AC Nielsen will assume exclusive liability for liabilities up to a maximum amount to be calculated at the time such liabilities, if
any, become payable (the "ACN Maximum Amount") and that Cognizant and D&B will share liability equally for any amounts in excess of the ACN Maximum Amount. The ACN Maximum Amount will be determined by
an investment banking firm as the
maximum amount which AC Nielsen will be able to pay after giving effect to (i) any plan submitted by such investment bank which is designed to maximize the claims paying ability of AC Nielsen
without impairing the investment banking firm's ability to deliver a viability opinion (but which will not require any action requiring shareholder approval), and (ii) payment of related fees
and expenses. For these purposes, financial viability means the ability of AC Nielsen, after giving effect to such plan, the payment of related fees and expenses and the payment of the ACN Maximum
Amount, to pay its debts as they become due and to finance the current and anticipated operating and capital requirements of its business, as reconstituted by such plan, for two years from the date
any such plan is expected to be implemented.

In
1998, IMS HEALTH was spun-off from Cognizant (the "1998 Spin-Off") which then changed its name to Nielsen Media Research, Inc. ("NMR"). IMS HEALTH and
NMR are jointly and severally liable to D&B and AC Nielsen for Cognizant's obligations under the terms of the Distribution Agreement dated October 28, 1996 among D&B, Cognizant and AC Nielsen
(the "1996 Distribution Agreement"). In connection with the 1998 Spin-Off, IMS HEALTH and NMR agreed that, as between themselves, IMS HEALTH will assume 75%, and NMR will assume 25%, of
any payments to be made in respect of the IRI Action under the Indemnity and Joint Defense Agreement or otherwise, including any legal fees and expenses related thereto incurred in 1999 or thereafter.
IMS HEALTH has agreed to be fully responsible for any legal fees and expenses incurred during 1998. NMR's aggregate liability to

54

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IMS HEALTH for payments in respect of the IRI Action and certain other contingent liabilities shall not exceed $125.0 million. Management of IMS HEALTH and SYNAVANT are unable to predict at
this time the final outcome of this matter.

Other Contingencies

IMS HEALTH, Cognizant and D&B have entered, and IMS HEALTH continues to enter, into global tax planning initiatives in the normal course of their business. These
activities are subject to review by tax authorities. As a result of the review process, uncertainties exist and it is possible that some of these matters could be resolved adversely to IMS HEALTH,
Cognizant, D&B or SYNAVANT.

IMS
HEALTH has been informed by D&B that the IRS is currently reviewing D&B's utilization of certain capital losses during 1989 and 1990. D&B has advised IMS HEALTH that during the
second quarter of 2000 it filed an amended tax return for these periods which reflects $561.6 million of tax and interest due. Under the terms of the 1996 Distribution Agreement, IMS HEALTH is
liable to pay half of such taxes and interest owed to the IRS to the extent that D&B total liabilities exceed $137.0 million. D&B paid approximately $349.3 million of this amount in
early May 2000, and IMS HEALTH paid approximately $212.3 million in May 2000 (the "May 2000 Payment"). A portion of IMS HEALTH's liability will in turn be shared with NMR
under the Distribution Agreement between those companies dated June 30, 1998 (the "1998 Distribution Agreement"). The payments are being made to the IRS to stop further interest from accruing.
D&B expects a formal assessment for the additional tax to be issued by the IRS during the second quarter of 2000. D&B has advised IMS HEALTH that, notwithstanding the filing and payment, it intends to
contest the assessment of additional tax. IMS HEALTH estimates that its share of the liability, were the IRS to prevail, would be approximately
$140.0 million net of income tax benefit on interest (approximately $31.3 million) and NMR's contribution obligations (approximately $41.0 million). Although the Company is
jointly and severally liable for this obligation, it is not currently estimable what portion of this obligation, if any, will be borne by the Company.

NOTE 11.    RESTRUCTURING

On August 16, 2001, the Company announced that, in an attempt to optimize customer responsiveness and organizational effectiveness, it would simplify its
senior leadership structure as well as eliminate certain other positions in its international and domestic operations. This action resulted in a reduction in personnel by approximately 6% to 8%
worldwide. The Company completed the first two steps in the restructuring process, resulting in the elimination of approximately 100 positions which is reflected in the charge of $7.5 million
for 2001. These reductions included six senior management positions with the remainder being operating, technical and administrative staff. The restructuring charge is composed entirely of employee
severance and separation related costs, such as extended benefits and outplacement fees. Of the $7.5 million charge, $2.6 million was paid during 2001, with the remainder expected to be
paid within the next twelve to twenty-four months.

55

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NOTE 12.    SUPPLEMENTAL FINANCIAL DATA

Accounts and Other ReceivablesNet:

2001

2000Trade

$
37,065

$
41,647Unbilled receivables


4,378


4,523Other


239


2,503Less: Allowance for doubtful accounts


(1,899
)

(1,830
)$
39,783

$
46,843


Other Current Assets:

2001

2000Inventory

$
1,957

$
2,085Prepaid expenses


3,757


3,495Deferred taxes


399


428$
6,113

$
6,008


Property, Plant and EquipmentNet:

2001

2000Property

$
1,033

$
1,095Plant and equipment


45,641


46,399Less: Accumulated depreciation


(38,609
)

(36,634
)Leasehold improvements, less: accumulated amortization of $4.5 million and $4.0 million, respectively


3,145


2,773$
11,210

$
13,633


Accrued and Other Current Liabilities:

2001

2000Salaries, wages, bonuses and other compensation

$
11,325

$
4,643Other


4,739


11,209$
16,064

$
15,852


NOTE 13.    OPERATIONS BY GEOGRAPHIC SEGMENT

The
Company delivers pharmaceutical relationship management and interactive marketing solutions globally in 31 countries. Prior to the Distribution, the SYNAVANT businesses, as defined
in Note 1, were managed as part of the IMS segment of IMS HEALTH. The Company's chief operating

56

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decision-makers evaluate the business on a global basis with consideration of resource allocation on a geographic basis. The Americas Segment principally consists of operations for the United States,
the Company's country of domicile. The Europe Segment includes the operations of the United Kingdom, which is the largest country in this segment. The Asia Pacific Segment consists principally of the
operations of Australia. For further information on material individual countries see the additional disclosure in the second table of this note.

Dollar amounts in thousands

|                                            |  | Americas(1) |          | Europe |   | Asia Pacific |   | Total |       
|------------------------------------------- |  | ----------- | -------- | ------ | - | ------------ | - | ----- | ------
|Year-Ended December 31, 2001                |  |             |          |        |   |              |   |       |       
|Operating revenues                          |  | $           | 107,254  |        | $ | 57,253       |   | $     | 16,024
|Segment operating income (loss)             |  |             | (31,412  | )      |   | 1,465        |   |       | (159  
|Non-operating income (loss)                 |  |             | (327     | )      |   | (159         | ) |       | (119  
|Income (loss) before income taxes           |  |             | (31,739  | )      |   | 1,306        |   |       | (278  
|Provision for income taxes                  |  |             |          |        |   |              |   |       |       
|Net loss                                    |  |             |          |        |   |              |   |       |       
|Segment total depreciation and amortization |  |             | 20,944   |        |   | 2,027        |   |       | 558   
|Segment capital expenditures                |  |             | 1,864    |        |   | 1,497        |   |       | 445   
|Identifiable assets at December 31, 2001    |  |             | 84,260   |        |   | 27,666       |   |       | 6,332 
|Year-Ended December 31, 2000                |  |             |          |        |   |              |   |       |       
|Operating revenues                          |  | $           | 105,873  |        | $ | 57,171       |   | $     | 18,395
|Segment operating income (loss)             |  |             | (139,559 | )      |   | (4,299       | ) |       | 105   
|Non-operating income (loss)                 |  |             | (159     | )      |   | (1,155       | ) |       | 9     
|Income (loss) before income taxes           |  |             | (139,718 | )      |   | (5,454       | ) |       | 114   
|Benefit for income taxes                    |  |             |          |        |   |              |   |       |       
|Net loss                                    |  |             |          |        |   |              |   |       |       
|Segment total depreciation and amortization |  |             | (134,861 | )      |   | (6,819       | ) |       | (710  
|Segment capital expenditures                |  |             | 4,559    |        |   | 1,746        |   |       | 364   
|Identifiable assets at December 31, 2000    |  |             | 109,349  |        |   | 39,506       |   |       | 7,644 
|Year-Ended December 31, 1999                |  |             |          |        |   |              |   |       |       
|Operating revenues                          |  | $           | 111,522  |        | $ | 67,321       |   | $     | 21,714
|Year 2000 Costs                             |  |             | 2,769    |        |   | 0            |   |       | 0     
|Segment operating income (loss)             |  |             | (13,200  | )      |   | 15,799       |   |       | 951   
|Non-operating income (loss)                 |  |             | 23       |        |   | (308         | ) |       | 15    
|Income (loss) before income taxes           |  |             | (13,177  | )      |   | 15,491       |   |       | 966   
|Provision for income taxes                  |  |             |          |        |   |              |   |       |       
|Net loss                                    |  |             |          |        |   |              |   |       |       
|Segment total depreciation and amortization |  |             | 25,763   |        |   | 1,275        |   |       | 802   
|Segment capital expenditures                |  |             | 2,732    |        |   | 2,129        |   |       | 510   
|Identifiable assets at December 31, 1999    |  |             | 227,291  |        |   | 32,916       |   |       | 8,092 

57

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Information
about the Company's operations and long-lived assets by geography are as follows:

|                             |  | US |         | UK |   | Australia |  | Rest of World(2) |        | Total
|---------------------------- |  | -- | ------- | -- | - | --------- |  | ---------------- | ------ | -----
|Year Ended December 31, 2001 |  |    |         |    |   |           |  |                  |        |      
|Operating revenue            |  | $  | 101,666 |    | $ | 21,327    |  | $                | 13,342 |      
|Long-lived assets (1)        |  |    | 54,278  |    |   | 3,266     |  |                  | 727    |      
|Year Ended December 31, 2000 |  |    |         |    |   |           |  |                  |        |      
|Operating revenue            |  |    | 99,363  |    |   | 25,055    |  |                  | 16,655 |      
|Long-lived assets (1)        |  |    | 74,009  |    |   | 3,990     |  |                  | 985    |      
|Year Ended December 31, 1999 |  |    |         |    |   |           |  |                  |        |      
|Operating revenue            |  |    | 104,051 |    |   | 28,670    |  |                  | 20,669 |      
|Long-lived assets (1)        |  |    | 199,439 |    |   | 10,154    |  |                  | 1,531  |      

---

NOTE 14.    THE DISTRIBUTION

In accordance with the Distribution Agreement, IMS HEALTH conveyed title to certain assets and transferred certain liabilities. The net assets recorded by
SYNAVANT on the Spin date to reflect this capital contribution totaled approximately $15.3 million. The net assets received included $10.7 million of cash, which was subject to
adjustment in accordance with the Distribution Agreement. The Company also assumed a liability of up to $9.0 million in connection with the Distribution Agreement whereby SYNAVANT will bear 50%
of IMS HEALTH's share of certain of the liabilities as discussed in Note 10.

Pursuant
to the Distribution Agreement, the Company was contractually entitled to receive shares of Gartner Group common stock with a fair value of $4.0 million as of the close of
business on the Distribution date and a note receivable from a third party with a carrying value of $2.5 million. The Gartner Group common stock was included in Other current assets as of
December 31, 2000. During the second quarter of 2001, the Gartner Group common stock was transferred to the Company. During the third quarter of 2001, the Gartner Group repurchased all the
outstanding shares held by the Company for $3.1 million in cash. As a result of this transaction, the Company recorded a realized loss
of $0.9 million during the third quarter which is included in Other incomenet. The note receivable from a third party was not transferred to the Company until October 29,
2001, subsequent to the end of the third quarter. The Company has classified the note receivable from a third party as a long term note receivable and is accounting for it in accordance with the
underlying asset to be received. During the second quarter of 2001, the Company revalued this note receivable to $1.0 million based on the estimated fair value of the underlying asset.

In
the opinion of McDermott, Will & Emery, special tax counsel to IMS HEALTH, the Distribution should qualify under Section 355 of the Internal Revenue Code, and be
tax-free to IMS HEALTH and to IMS HEALTH stockholders for U.S. federal income tax purposes, except for any tax

58

---

payable because of any cash IMS HEALTH stockholders may receive in lieu of a fractional share of SYNAVANT Common Stock.

The
opinion of special tax counsel is based on certain factual representations made by IMS HEALTH and SYNAVANT. If such factual representations were incorrect in a material respect, such
opinion could become moot. SYNAVANT is not aware of any facts or circumstances that would cause such representations to be incorrect in a material respect. IMS HEALTH and SYNAVANT will agree in the
Distribution Agreement to certain restrictions on future actions to provide further assurances that Section 355 of the Internal Revenue Code will apply to the Distribution.

If
the Distribution were not to qualify under Section 355 of the Internal Revenue Code, then, in general, a corporate tax (which would be substantial) would be payable by the
consolidated group, of which IMS HEALTH is the common parent and SYNAVANT is a member. In addition, under the consolidated return rules, each member of the consolidated group would be severally liable
for such tax liability. If the Distribution occurred and it were not to qualify under Section 355 of the Internal Revenue Code, SYNAVANT estimates that the aggregate tax liability in this
regard would be approximately $100.0 million. In the event that SYNAVANT were obligated to fund a substantial portion of such liabilities, it would have a material adverse effect on SYNAVANT's
financial condition.

Moreover,
if the Distribution were not to qualify under Section 355 of the Internal Revenue Code, each IMS HEALTH stockholder receiving shares of SYNAVANT Common Stock in the
Distribution would be treated as if such stockholder had received a taxable distribution in an amount equal to the fair market value of the SYNAVANT Common Stock received.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

59

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information set forth under the caption "Election of Directors" in the Proxy Statement used in connection with our 2002 Annual Stockholders Meeting, is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information set forth under the caption "Executive Compensation" in the Proxy Statement used in connection with our 2002 Annual Stockholders Meeting, is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information set forth under the caption "Security Ownership of Principal Stockholders and Management" in the Proxy Statement used in connection with our 2002
Annual Stockholders' Meeting is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the caption "Certain Transactions" in the Proxy Statement used in connection with our 2002 Annual Stockholders' Meeting is
incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Financial Statements, Financial Statement Schedules and Exhibits

(a)
Exhibits

|Exhibit
Number |  | Exhibit                                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Amended and Restated Certificate of Incorporation of SYNAVANT Inc. (Incorporated by reference from Exhibit 3.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                               
|3.2            |  | Amended and Restated By-Laws of SYNAVANT (Incorporated by reference from Exhibit 3.2 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                                         
|4.1            |  | Specimen Common Stock Certificate (Incorporated by reference from Exhibit 4.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                                                
|4.2            |  | Rights Agreement, dated as of August 29, 2000, between SYNAVANT Inc. and EquiServe Trust Company, as Rights Agent (Incorporated by reference from Exhibit 4.2 to the Company's Form 10 Registration
Statement (File No. 0-30822)).
|10.1           |  | Distribution Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                        
|10.2           |  | Form of Xponent Data License Agreement between IMS HEALTH Incorporated and SYNAVANT (Incorporated by reference from Exhibit 10.2 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                            
|10.3           |  | Form of Cross License Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.3 to the Company's Form 10 Registration Statement (File
No. 0-30822).                                

60

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|10.4  |  | Form of Tax Allocation Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.4 to the Company's Form 10 Registration Statement (File
No. 0-30822).                      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | Form of Employee Benefits Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.5 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                 
|10.6  |  | Form of Data and Telecommunications Services Agreement between IMS HEALTH Incorporated and SYNAVANT (Incorporated by reference from Exhibit 10.6 to the Company's Form 10 Registration Statement (File
No. 0-30822).     
|10.7  |  | Form of Sublease Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.7 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                          
|10.8  |  | Form of Corporate Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.8 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                
|10.9  |  | Form of Shared Transaction Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.9 to the Company's Form 10 Registration Statement (File
No. 0-30822)).        
|10.10 |  | Form of Shared Transaction Services Agreement between IMS AG and certain subsidiaries of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.10 to the Company's Form 10 Registration Statement (File
No. 0-30822)).
|10.11 |  | SYNAVANT Inc. 2000 Stock Incentive Plan (Incorporated by reference from Exhibit 10.11 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                               
|10.12 |  | SYNAVANT Inc. 2000 Replacement Plan for IMS HEALTH Incorporated Equity-Based Awards (Incorporated by reference from Exhibit 10.12 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                  
|10.13 |  | SYNAVANT Inc. 2000 Annual Incentive Plan (Incorporated by reference from Exhibit 10.13 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                              
|10.14 |  | SYNAVANT Inc. 2000 Non-Employee Directors' Deferred Compensation Program (Incorporated by reference from Exhibit 10.14 to the Company's Form 10 Registration Statement (File No. 0-30822)).                              
|10.15 |  | SYNAVANT Inc. 2000 Savings Equalization Plan (Incorporated by reference from Exhibit 10.15 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                          
|10.16 |  | SYNAVANT Inc. 2000 Employee Protection Plan (Incorporated by reference from Exhibit 10.16 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                           
|10.17 |  | Form of Tier 1 Change-in-Control Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.17 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                   
|10.18 |  | Form of Tier 2 Change-in-Control Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.18 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                   

61

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|10.19 |   | Form of Stock Option Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.19 to the Company's Form 10 Registration Statement (File No. 0-30822)).                              
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.20 | * | Siebel Alliance Program Master Agreement, dated December 31, 2001, between Siebel Systems, Inc. and SYNAVANT Inc.                                                                                                      
|10.21 |   | Credit support letter, dated July 25, 2000, between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.24 to the Company's Form 10 Registration Statement (File
No. 0-30822)).       
|10.22 |   | Form of Australian letter of credit support letter between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.25 to the Company's Form 10 Registration Statement (File
No. 0-30822)).
|10.23 |   | Form of Information Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.26 to the Company's Form 10 Registration Statement (File No. 0-30822)
).           
|10.24 |   | Credit Facility, dated April 27, 2001, between SYNAVANT Inc. and Foothill Capital Corporation (Incorporated by reference from Exhibit 10.1 to the Company's Form 8-K filed May 8, 2001 (File
No. 0-30822)).            
|21.1  |   | List of Subsidiaries.                                                                                                                                                                                                  
|23.1  |   | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                 

---

(b)
Financial Statement Schedule

Schedule II
Valuation and Qualifying Accounts

Reports on Form 8-K filed in the fourth quarter of 2001.

On November 8, 2001, the Company filed a current report on Form 8-K to announce the resignation of Craig S. Kussman as Executive Vice
President, Chief Financial Officer and Chief Administrative Officer.

62

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| |  | SYNAVANT INC.
| |  | -------------
| |  | By:          

Date:
March 28, 2002

|Signature                                         |  | Title                                                                                    |  | Date          
|------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | --------------
|                                                  |  |                                                                                          |  |               
|/s/WAYNE P. YETTERWayne P. Yetter                 |  | Chairman and Chief Executive Officer (Principal Executive Officer)                       |  | March 28, 2002
|/s/CLIFFORD A. FARREN, JR.Clifford A. Farren, Jr. |  | Acting Chief Financial Officer and Vice President, Finance (Principal Financial Officer) |  | March 28, 2002
|/s/PETER H. FUCHSPeter H. Fuchs                   |  | Director                                                                                 |  | March 28, 2002
|/s/ROBERT J. KAMERSCHENRobert J. Kamerschen       |  | Director                                                                                 |  | March 28, 2002
|/s/EUGENE H. LOCKHARTEugene H. Lockhart           |  | Director                                                                                 |  | March 28, 2002
|/s/MARY A. MADDENMary A. Madden                   |  | Director                                                                                 |  | March 28, 2002
|/s/BARRY L. WILLIAMSBarry L. Williams             |  | Director                                                                                 |  | March 28, 2002

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EXHIBIT INDEX

|Exhibit
Number |  | Exhibit                                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.3            |  | Amended and Restated Certificate of Incorporation of SYNAVANT Inc. (Incorporated by reference from Exhibit 3.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                               
|3.4            |  | Amended and Restated By-Laws of SYNAVANT (Incorporated by reference from Exhibit 3.2 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                                         
|4.3            |  | Specimen Common Stock Certificate (Incorporated by reference from Exhibit 4.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                                                
|4.4            |  | Rights Agreement, dated as of August 29, 2000, between SYNAVANT Inc. and EquiServe Trust Company, as Rights Agent (Incorporated by reference from Exhibit 4.2 to the Company's Form 10 Registration
Statement (File No. 0-30822)).
|10.1           |  | Distribution Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.1 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                        
|10.2           |  | Form of Xponent Data License Agreement between IMS HEALTH Incorporated and SYNAVANT (Incorporated by reference from Exhibit 10.2 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                            
|10.3           |  | Form of Cross License Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.3 to the Company's Form 10 Registration Statement ((File No. 0-30822)
).                             
|10.4           |  | Form of Tax Allocation Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.4 to the Company's Form 10 Registration Statement ((File No. 0-30822)
).                            
|10.5           |  | Form of Employee Benefits Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.5 to the Company's Form 10 Registration Statement ((File No. 0-30822)
).                         
|10.6           |  | Form of Data and Telecommunications Services Agreement between IMS HEALTH Incorporated and SYNAVANT (Incorporated by reference from Exhibit 10.6 to the Company's Form 10 Registration Statement (File
No. 0-30822)).             
|10.7           |  | Form of Sublease Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.7 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                                   
|10.8           |  | Form of Corporate Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.8 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                         
|10.9           |  | Form of Shared Transaction Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.9 to the Company's Form 10 Registration Statement (File
No. 0-30822)).                 
|10.10          |  | Form of Shared Transaction Services Agreement between IMS AG and certain subsidiaries of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.10 to the Company's Form 10 Registration Statement (File
No. 0-30822)).         
|10.11          |  | SYNAVANT Inc. 2000 Stock Incentive Plan (Incorporated by reference from Exhibit 10.11 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                                        

64

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|10.12  |  | SYNAVANT Inc. 2000 Replacement Plan for IMS HEALTH Incorporated Equity-Based Awards (Incorporated by reference from Exhibit 10.12 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.13  |  | SYNAVANT Inc. 2000 Annual Incentive Plan (Incorporated by reference from Exhibit 10.13 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                            
|10.14  |  | SYNAVANT Inc. 2000 Non-Employee Directors' Deferred Compensation Program (Incorporated by reference from Exhibit 10.14 to the Company's Form 10 Registration Statement (File No. 0-30822)).                            
|10.15  |  | SYNAVANT Inc. 2000 Savings Equalization Plan (Incorporated by reference from Exhibit 10.15 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                        
|10.16  |  | SYNAVANT Inc. 2000 Employee Protection Plan (Incorporated by reference from Exhibit 10.16 to the Company's Form 10 Registration Statement (File No. 0-30822)).                                                         
|10.17  |  | Form of Tier 1 Change-in-Control Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.17 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                 
|10.18  |  | Form of Tier 2 Change-in-Control Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.18 to the Company's Form 10 Registration Statement (File No. 0-30822)
).                 
|10.19  |  | Form of Stock Option Agreement for Certain Executives of SYNAVANT Inc. (Incorporated by reference from Exhibit 10.19 to the Company's Form 10 Registration Statement (File No. 0-30822)).                              
|10.20* |  | Siebel Alliance Program Master Agreement, dated December 31, 2001, between Siebel Systems, Inc. and SYNAVANT Inc.                                                                                                      
|10.21  |  | Credit support letter, dated July 25, 2000, between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.24 to the Company's Form 10 Registration Statement (File
No. 0-30822)).       
|10.22  |  | Form of Australian letter of credit support letter between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.25 to the Company's Form 10 Registration Statement (File
No. 0-30822)).
|10.23  |  | Form of Information Services Agreement between IMS HEALTH Incorporated and SYNAVANT Inc. (Incorporated by reference from Exhibit 10.26 to the Company's Form 10 Registration Statement (File No. 0-30822)
).           
|10.24  |  | Credit Facility, dated April 27, 2001, between SYNAVANT Inc. and Foothill Capital Corporation (Incorporated by reference from Exhibit 10.1 to the Company's Form 8-K filed May 8, 2001 (File
No. 0-30822)).            
|21.1   |  | List of Subsidiaries.                                                                                                                                                                                                  
|23.1   |  | Consent of PricewaterhouseCoopers LLP.                                                                                                                                                                                 

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65

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Schedule II

SYNAVANT Inc.
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2001, 2000 and 1999
(Dollars in thousands)

|Col. A                               |  | Col. B |       | Col. C |   | Col. D |  | Col. E
|------------------------------------ |  | ------ | ----- | ------ | - | ------ |  | ------
|
|ALLOWANCE FOR DOUBTFUL ACCOUNTS:     |  |        |       |        |   |        |  |       
|For the Year Ended December 31, 2001 |  | $      | 1,830 |        | $ | 289    |  | $     
|For the Year Ended December 31, 2000 |  | $      | 1,012 |        | $ | 175    |  | $     
|For the Year Ended December 31, 1999 |  | $      | 1,587 |        | $ | 108    |  | $     
|TAX VALUATION ALLOWANCES:            |  |        |       |        |   |        |  |       
|For the Year Ended December 31, 2001 |  | $      | 8,196 |        | $ | 5,346  |  | $     
|For the Year Ended December 31, 2000 |  | $      | 4,147 |        | $ | 4,049  |  | $     
|For the Year Ended December 31, 1999 |  | $      | 3,756 |        | $ | 941    |  | $     

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