SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                  FORM 10-Q/A

(Mark one)

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

For the quarterly period ended September 30, 1998

                                   OR

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

For the transition period from                  to
                               ----------------     ---------------------

                Commission file number 001-14049


                   IMS Health Incorporated
-------------------------------------------------------------------------
   (Exact name of registrant as specified in its charter)

          Delaware                              06-1506026
-------------------------------     --------------------------------------
-------------------------------     --------------------------------------
   (State of Incorporation)          (I.R.S. Employer Identification No.)

   200 Nyala Farms, Westport, CT                        06880
--------------------------------------     -----------------------------------
--------------------------------------     -----------------------------------
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code              (203) 222-4200
                                                                --------------


Indicate by check mark whether the  registrant (1) has filed all reports
required to be filed by Sections 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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date:

           Title of Class                              Shares Outstanding
           Common Stock,                             at September 30, 1998
     par value $.01 per share                             160,156,033


<PAGE>


                          IMS HEALTH INCORPORATED

                          INDEX TO FORM 10-Q/A

PART I. FINANCIAL INFORMATION                                          PAGE(S)

Item 1. Financial Statements

Condensed Consolidated Statements of Income (Unaudited)
      Three Months Ended September 30, 1998 and 1997                     3
      Nine Months Ended September 30, 1998 and 1997                      4

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
      Three Months Ended September 30, 1998 and 1997                     5
      Nine Months Ended September 30, 1998 and 1997                      5

Condensed Consolidated Statements of Financial Position (Unaudited)
      September 30, 1998 and December 31, 1997                           6
Condensed Consolidated Statements of Cash Flows (Unaudited)
     Nine Months Ended September 30, 1998 and 1997                       7

Notes to Condensed Consolidated Financial Statements (Unaudited)      8-19

Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations                       20-32


PART II.  OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                33

SIGNATURES                                                              34














<PAGE>







PART I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS

<TABLE>

IMS HEALTH INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts in thousands, except per share data)
                                                                                                Three Months Ended
                                                                                                   September 30,
                                                                                            ----------------------------
<S>                                                                                    <C>                      <C>

                                                                                          1998                   1997
                                                                                    ------------------     ------------------

Operating Revenue                                                                     $      283,606          $    251,130

Operating Costs                                                                              112,364               106,332
Selling and Administrative Expenses                                                           87,468                65,602
Direct Acquisition  Integration Costs                                                         43,019                     0
Depreciation and  Amortization                                                                25,102                20,022
Acquired In-Process Research and Development                                                  10,900                     0
                                                                                    ------------------     ------------------

Operating Income                                                                               4,753                59,174

Interest Income                                                                                7,241                 3,141
Interest Expense                                                                               (335)                  (89)
Gartner Equity Income                                                                         15,970                13,758
Gain from Stock Sale by Gartner                                                                1,459                   706
Gains from Dispositions, Net                                                                  12,047                 3,955
Other Expense - Net                                                                          (3,441)                 (212)
                                                                                    ------------------     ------------------
Non-Operating Income - Net                                                                    32,941                21,259

Income from Continuing Operations,
Before Provision for Taxes                                                                    37,694                80,433
Provision for Income Taxes                                                                  (12,739)              (23,116)
                                                                                    ------------------     ------------------
Income from Continuing Operations                                                             24,955                57,317
Income from Discontinued Operations, Net of Income Tax Provision
of $8,251 for September 30, 1997                                                                   0                19,749
                                                                                    ------------------     ------------------
Net Income                                                                                  $ 24,955           $    77,066
                                                                                    ==================     ==================

Earnings Per Share of Common Stock:
Basic
Income from Continuing Operations                                                             $ 0.15                $ 0.35
Income from Discontinued Operations                                                             0.00                  0.12
                                                                                    ------------------     ------------------
Basic Earnings Per Share                                                                       $0.15                $ 0.47
Diluted
Income from Continuing Operations                                                              $0.15                $ 0.34
Income from Discontinued Operations                                                             0.00                  0.12
                                                                                     ------------------     ------------------
Diluted Earnings Per Share                                                                    $0.15                 $ 0.46

Average Number of Shares Outstanding - Basic                                             164,051,000            163,146,000

Dilutive Effect of Shares Issuable During the Period Under Stock Option Plans              4,055,000              3,146,000
Adjustment of Shares to Reflect Options Exercised and Cancelled During the Period            734,000                151,000
                                                                                    ==================     ==================
Average Number of Shares Outstanding - Diluted                                           168,840,000            166,443,000
                                                                                    ==================     ==================
<FN>

See accompanying notes to the condensed consolidated financial statements
(unaudited)

</FN>
</TABLE>

<PAGE>



IMS HEALTH INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts in thousands, except per share data)
<TABLE>
                                                                                                   Nine Months Ended
                                                                                                      September 30,
                                                                                                 ------------------------
<S>                                                                                     <C>                   <C>

                                                                                            1998                1997
                                                                                     -------------------  ------------------

Operating Revenue                                                                       $      795,070        $   731,511

Operating Costs                                                                                391,819            322,797
Selling and Administrative Expenses                                                            244,560            219,520
Depreciation and  Amortization                                                                  68,303             69,057
Acquired In-Process Research and Development                                                    32,800                  0
Direct Acquisition Integration Costs                                                            48,019                  0
                                                                                     -------------------  ------------------

Operating Income                                                                                 9,569            120,137

Interest Income                                                                                 16,110              8,417
Interest Expense                                                                                  (747)              (670)
Gartner Equity Income                                                                           48,864             44,429
Gain from Stock Sale by Gartner                                                                 14,838                706
Gain on Issuance of Subsidiary Stock                                                            12,777                  0
Gains from Dispositions, Net                                                                    22,462              9,391
Other Expense - Net                                                                            (8,688)            (2,306)
                                                                                     -------------------  ------------------
Non-Operating Income - Net                                                                     105,616             59,967

Income from Continuing Operations, Before Provision for Taxes                                 115,185             180,104

Provision for Income Taxes                                                                     (49,596)           (49,349)
                                                                                     -------------------  ------------------
Income from Continuing Operations                                                               65,589            130,755
Income from Discontinued Operations, Net of Income Tax Provision of $15,887 and
$22,369 for nine months ended September 30, 1998 and 1997, respectively                         42,093             59,271
                                                                                     -------------------  ------------------
Net Income                                                                              $      107,682        $   190,026
                                                                                     ===================  ==================

Earnings Per Share of Common Stock:
Basic
Income from Continuing Operations                                                               $ 0.40             $ 0.79
Income from Discontinued Operations                                                               0.26               0.35
                                                                                     -------------------  ------------------
Basic Earnings Per Share                                                                        $ 0.66             $ 1.14

Diluted
Income from Continuing Operations                                                               $ 0.39             $ 0.78
Income from Discontinued Operations                                                               0.25               0.35
                                                                                     -------------------  ------------------
Diluted Earnings Per Share                                                                      $ 0.64             $ 1.13

Average Number of Shares Outstanding - Basic                                               163,237,000         166,148,000
Dilutive Effect of Shares Issuable During the Period Under Stock Option Plans               3,216,000            1,302,000
Adjustment of Shares to Reflect Options Exercised and Cancelled During the Period           2,110,000              289,000
                                                                                     ===================  ==================
Average Number of Shares Outstanding - Diluted                                            168,563,000          167,739,000
                                                                                     ===================  ==================

<FN>

 See accompanying notes to the condensed consolidated financial statements
 (unaudited)

</FN>



</TABLE>


<PAGE>



IMS HEALTH INCORPORATED
<TABLE>

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(Dollar amounts in thousands)
                                                                                                 Three Months Ended
                                                                                                   September 30,
                                                                                              -------------------------
<S>                                                                                       <C>                 <C>

                                                                                             1998                1997
                                                                                       ------------------  -----------------

Net Income                                                                                   $   24,955        $   77,066


Other Comprehensive Income/(Loss), net of tax:

Foreign Currency Translation Adjustments                                                            175            (2,965)

Unrealized (Losses)/Gains on Securities:
Unrealized Holding (Losses)/Gains Arising During the Period (Net of tax
benefit/(expense) of  $502 and  ($6,584) in 1998 and 1997, respectively)                       (1,329)             18,030
Less: reclassification adjustment for gains included in Net Income (Net of tax
Expense of  ($2,302) and  ($8,033) in 1998 and 1997, respectively)                             (6,100)           (22,488)
                                                                                       ------------------  -----------------

Net Unrealized Losses                                                                          (7,429)            (4,458)

                                                                                       ------------------  -----------------
Other Comprehensive Loss                                                                        (7,254)           (7,423)
                                                                                       ------------------  -----------------

Comprehensive Income                                                                         $  17,701         $   69,643
                                                                                       ==================  =================
</TABLE>


<TABLE>

                                                                                                 Nine Months Ended
                                                                                                   September 30,
                                                                                              -------------------------
<S>                                                                                       <C>                  <C>

                                                                                             1998                1997
                                                                                       ------------------  -----------------

Net Income                                                                                   $  107,682        $  190,026


Other Comprehensive Income/(Loss), net of tax:

Foreign Currency Translation Adjustments                                                        (9,421)           (45,449)

Unrealized (Losses)/Gains on Securities:
Unrealized Holding (Losses)/Gains Arising During the Period (Net of tax
benefit/(expense) of  $2,440 and ($6,025) in 1998 and 1997, respectively)                      (6,464)              16,867
Less: Reclassification Adjustment for Realized Gains included in Net Income (net
of tax expenses  of  ($1,557) and ($8,403) in 1998 and 1997, respectively)                     (4,126)            (23,522)
                                                                                       ------------------  -----------------
Net Unrealized Losses                                                                         (10,590)             (6,655)

                                                                                       ------------------  -----------------
Other Comprehensive Loss                                                                      (20,011)            (52,104)
                                                                                       ------------------  -----------------

Comprehensive Income                                                                        $   87,671        $   137,922
                                                                                       ==================  =================

<FN>

  See accompanying notes to the condensed consolidated financial statements
 (unaudited)

</FN>
</TABLE>






<PAGE>





IMS HEALTH INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(Dollar amounts in thousands)

<TABLE>

<S>                                                                        <C>                        <C>

                                                                          September 30,               December 31,
                                                                               1998                       1997
                                                                        -------------------       --------------------
Assets

Current Assets
  Cash and Cash Equivalents                                                      $ 312,245               $    312,442
   Accounts Receivable-Net                                                         245,947                    251,623
   Other Current Assets                                                             73,056                     65,692
                                                                        -------------------      --------------------
       Total Current Assets                                                        631,248                    629,757
                                                                        -------------------       --------------------

Investment in Gartner Group                                                        238,551                    195,695
Marketable Securities and Other Investments                                        104,945                    109,712
Property, Plant and Equipment-Net                                                  177,741                    178,533
Other Assets-Net
   Computer Software                                                               139,718                     99,175
   Goodwill                                                                        352,465                     87,430
   Other Assets                                                                     56,018                     79,009
                                                                        -------------------       --------------------
       Total Other Assets-Net                                                      548,201                    265,614
                                                                        -------------------       --------------------
Net Assets from Discontinued Operations                                                  0                    122,778
                                                                        -------------------       --------------------
Total Assets                                                            $        1,700,686           $      1,502,089
                                                                        ===================       ====================

Liabilities and Shareholders' Equity

Current Liabilities
   Accounts and Notes Payable                                               $      91,800                 $    44,441
   Accrued and Other Current Liabilities                                           269,081                    189,384
   Accrued Income Taxes                                                             56,707                     52,696
   Deferred Revenues                                                               145,169                    110,768
                                                                        -------------------       --------------------
       Total Current Liabilities                                                   562,757                    397,289
Postretirement and Postemployment Benefits                                          44,546                     38,082
Deferred Income Taxes                                                               98,756                     92,153
Minority Interests                                                                 114,811                    101,209
Other Liabilities                                                                   78,213                     71,786
                                                                        -------------------       --------------------

Total Liabilities                                                                  899,083                    700,519
                                                                        -------------------       --------------------

Shareholders' Equity                                                               801,603                    801,570
                                                                        -------------------       --------------------

Total Liabilities and Shareholders' Equity                              $        1,700,686        $         1,502,089
                                                                        ===================       ====================

<FN>

 See  accompanying  notes to the  condensed  consolidated  financial (unaudited).
</FN>
</TABLE>


<PAGE>





IMS HEALTH INCORPORATED

<TABLE>


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
                                                                                               Nine Months Ended
                                                                                                 September 30,
                                                                                         ------------------------------
<S>                                                                                         <C>             <C>

                                                                                            1998            1997
                                                                                         ------------ -----------------
Cash Flows from Operating Activities:
Net Income                                                                                $107,682         $ 190,026
Less Income from Discontinued Operations                                                   (42,093)          (59,271)
                                                                                         ------------ -----------------
Income from Continuing Operations                                                           65,589           130,755
Reconciliation of Net Income to Net Cash
  Provided by Operating Activities:
    Depreciation and Amortization                                                           68,303            69,057
    Gains on Issuance of Subsidiary Stock                                                  (12,777)                0
    Gains from Sale of Investments, Net                                                    (22,462)           (9,391)
    Acquired In-Process Research & Development                                              32,800                 0
    Direct Acquisition Integration costs                                                    48,019                 0
    Postemployment Benefit Payments                                                         (2,748)           (7,058)
    Non-recurring Charge Payments                                                           (2,835)           (4,278)
    Net Decrease in Accounts Receivable                                                     29,790            22,527
    Net Increase in Deferred Revenues                                                       14,161            31,490
    Gartner Group Equity Income, Net of Taxes                                              (27,884)          (25,956)
    Gain from Stock Sale by Gartner                                                        (14,838)            (706)
    Minority Interest Expense                                                                7,012             2,690
    Deferred Income Taxes                                                                    1,118            22,038
    Net Increase (Decrease) in Accrued Income Taxes                                          5,912            (2,440)
    Net (Increase) in Other Working Capital Items                                         (33,601)           (29,700)
-----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                                                  155,559           199,028
-----------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Payments for Acquisitions of Businesses                                                     (2,938)                0
Cash of Companies Acquired in Stock Purchases                                               11,895                 0
Proceeds from Sale of Investments                                                           42,432            43,601
Capital Expenditures                                                                       (20,375)          (34,058)
Additions to Computer Software                                                             (45,428)          (43,148)
(Increase) Decrease in Investments                                                          (20,705)             268
Other                                                                                         4,369           (3,713)
-----------------------------------------------------------------------------------------------------------------------
Net Used in Investing Activities                                                           (30,750)          (37,050)
-----------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Payments for Purchase of Treasury Shares                                                  (510,867)         (302,011)
Proceeds from Exercise of  Stock Options                                                    61,638            11,365
Proceeds from Issuance of Subsidiary Stock                                                  27,128                 0
Payments of Dividends                                                                      (14,805)          (15,008)
Employee Stock Purchase Plan                                                                 3,403               782
Proceeds from Debt assumed by Nielsen Media Research                                       300,000                 0
Minority Interest Financing                                                                      0           100,000
Other                                                                                       33,288              (721)
-----------------------------------------------------------------------------------------------------------------------
Net Cash Used in Financing Activities                                                     (100,215)         (205,593)
-----------------------------------------------------------------------------------------------------------------------
Change of Gartner Group to Equity Basis                                                          0          (123,697)

Effect of Exchange Rate Changes on Cash and Cash Equivalents                                (7,618)          (10,169)
Cash Flow from Discontinued Operations                                                     (17,173)           31,210
-----------------------------------------------------------------------------------------------------------------------
Decrease in Cash and Cash Equivalents                                                         (197)         (146,271)
Cash and Cash Equivalents, Beginning of Period                                             312,442           422,963
----------------------------------------------------------------------------------------------------- -----------------
                                                                                                    
Cash and Cash Equivalents, End of Period                                                  $312,245         $ 276,692
=======================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for interest                                                 $   747        $        670
                                                                                  
Cash paid during the period for income taxes                                              $ 65,313        $   61,309
Non-Cash Investing Activities:
Stock Issued in Connection with Acquisitions                                              $243,854                 -
<FN>

See accompanying notes to the condensed consolidated financial statements
(unaudited).
</FN>
</TABLE>


<PAGE>


IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 1. Interim Consolidated Financial Statements

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and Article 10 of Regulation  S-X under the Securities and Exchange
Act of 1934, as amended.  The condensed  financial  statements and related notes
should be read in conjunction  with the  consolidated  financial  statements and
related  notes of Cognizant  Corporation  in the 1997 Annual Report on Form 10-K
and IMS Health  Incorporated  (the "Company" or "IMS Health") on the Form 8K/A-2
filed  July 22,  1998.  Accordingly,  the  accompanying  condensed  consolidated
financial  statements do not include all the  information  and notes required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of  management,  all  adjustments  considered  necessary  for a fair
presentation of financial position, results of operations and cash flows for the
periods  presented have been included.  Certain  prior-period  amounts have been
reclassified to conform with the 1998 presentation.

Note 2. Restatement of Interim Financial Statements

The  Company's  Form  10-Q/A  as of and for the  three  and  nine  months  ended
September  30, 1998 has been filed for the  restatement  of the value  initially
ascribed to acquired  in-process  research and development  projects relating to
the  acquisition  of  Walsh  International  Inc and  certain  non-US  assets  of
Pharmaceutical  Marketing Services Inc. ("PMSI"). The amount originally recorded
was based on the Company's application of the then general methods of allocating
the purchase price and the determination of in-process research and development.
Since that date,  however,  the SEC has revised the approach for such valuation.
The  estimate  for the  one-time  charges for  acquired in process  research and
development  projects for the initial filing was $52,000 (reported as $57,000 in
quarter 2) and  $14,200,  which has  subsequently  been  reduced to $21,900  and
10,900 for Walsh and PMSI  respectively.  In  addition,  based on a third  party
appraiser, the Company allocated $29,000 at Walsh and $7,700 at PMSI to existing
core technology,  representing computer software that is currently in use, which
is amortized over 5 years.  Approximately $156,557 for the Walsh acquisition and
$115,275  for the PMSI  acquisition  is recorded  as the excess of the  purchase
price over the fair value of identifiable net assets (goodwill),  which is being
amortized  on a  straight-line  basis over 15 years.  The  restatement  does not
affect  previously  reported net cash flows for the periods.  The effect of this
reallocation on previously reported condensed  consolidated financial statements
as of and for the three and
nine month periods ended September 30, 1998 is as follows:

<TABLE>

                                                             Three months                       Nine months
                                                      .ended September 30, 1998          .ended September 30, 1998
<S>                                                    <C>             <C>              <C>               <C>

Statement of Operations:                             As reported      As restated     As reported       As restated
In-process Research and Development                   $     9,200      $     10,900    $      66,200   $       32,800
Depreciation and Amortization                          $   24,228      $     25,102    $      67,429   $       68,303
Provision for Income Taxes                              $ (12,978)       $  (12,739)     $   (49,835)    $    (49,596)
Net Income                                             $   27,290      $     24,955     $     74,917     $    107,682
Earnings per common share - Basic                    $       0.17    $         0.15   $         0.46         $   0.66
Earnings per common share - Diluted                  $       0.16    $         0.15   $         0.44             0.64
</TABLE>


                                                   September 30, 1998
Balance Sheet                               As reported       As restated
Computer Software                          $  104,199        $  139,718     
Other Assets                               $   69,509        $   56,018
Goodwill                                    $ 330,162         $ 352,465

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 3. Basis of Presentation

This  document  relates  to IMS  Health.  The  Common  Stock of IMS  Health  was
distributed by Cognizant  Corporation  ("Cognizant") to its shareholders on June
30, 1998.  Simultaneously with the distribution (the "Distribution"),  Cognizant
changed its name to Nielsen Media Research,  Inc.  ("Nielsen  Media  Research").
Notwithstanding  the legal form of the distribution,  whereby Cognizant spun off
IMS Health,  for  accounting  purposes the  transaction  is accounted  for as if
Cognizant  spun off Nielsen  Media  Research  and IMS Health has been deemed the
"accounting  successor" to Cognizant.  The separation  created IMS Health as the
premier  global  provider of  information  solutions to the  pharmaceutical  and
healthcare  industries,  and established an independent  Nielsen Media Research,
the leader in electronic audience measurement  services.  IMS Health consists of
the  operations  of the  Company and various  operating  subsidiaries  including
Erisco, Inc. ("Erisco"), Enterprise Associates, Inc. ("Enterprises"),  Cognizant
Technology Solutions  Corporation ("CTS"), SSJ K.K. ("Super Systems Japan"), and
an equity investment in Gartner Group, Inc.
("Gartner").

Cognizant  received a favorable  ruling from the Internal  Revenue  Service with
respect to the tax-free  treatment of the Distribution in May 1998.  Cognizant's
Board of  Directors  on June  15,  1998  approved  the  final  plan,  terms  and
conditions relating to the separation of the company including distribution, tax
allocation,  employee benefits and other agreements and authorized management to
execute the plan of distribution.  The Board of Directors declared a dividend to
shareholders  of record as of the close of business on June 25, 1998  consisting
of one share of IMS  Health  Common  Stock for each  share of  Cognizant  Common
Stock. The Distribution was effective June 30, 1998.

In connection with the Distribution, Cognizant borrowed $300 million on June 24,
1998,  which  was used to repay  existing  intercompany  liabilities.  This debt
remained the obligation of Nielsen Media Research following the Distribution. In
connection with the Distribution,  Cognizant  contributed to IMS Health all cash
in  Cognizant's  accounts  other than (i) cash  required by  Cognizant  (renamed
Nielsen Media Research) to satisfy certain  specified  obligations and (ii) such
additional  cash as was necessary for the net  borrowings of Cognizant  (renamed
Nielsen Media Research) to equal $300 million as of the Distribution.

Prior to the  Distribution,  Nielsen Media  Research and IMS Health entered into
certain  agreements  that will govern the  relationship  between  Nielsen  Media
Research  and IMS Health  subsequent  to the  Distribution  and  provide for the
allocation  of  tax,   employee  benefits  and  certain  other  liabilities  and
obligations that may arise from periods prior to the  Distribution.  Among other
things,  the agreements set forth principles to be applied in allocating certain
Distribution-related  costs and specify portions of contingent liabilities to be
shared if certain amounts are exceeded  (including certain  liabilities that may
arise in  connection  with  the  1996  spin-off  of  Cognizant  from The Dun and
Bradstreet Corporation ("D&B")).

Pursuant to Accounting  Principles Board ("APB") No. 30,  "Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," the
consolidated  financial  statements  of the Company  have been  reclassified  to
reflect Nielsen Media Research as discontinued  operations for periods up to and
including June 30, 1998 and reflects the Distribution which occurred on June 30,
1998.


<PAGE>


IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 3. Basis of Presentation (continued)

<TABLE>

Summarized  data for  discontinued  operations is as follows  (dollar amounts in
thousands):


Results of Operations                                       (Unaudited)                             (Unaudited)
                                                 Three Months Ended September 30,         Nine Months Ended September 30,
<S>                                             <C>                    <C>                 <C>                 <C>
                                              ---------------------------------------- ---------------------------------------
                                                      1998                1997              1998 (1)              1997
                                              --------------------- ------------------ -------------------- ------------------
Operating Revenue                                      -                   $   89,911           $  193,996         $  263,366
Income Before Provision for Income Taxes               -                       28,000               57,980             81,640
                                              ===================== ================== ==================== ==================
Income from Discontinued Operations, Net of
Income Taxes                                           -                   $   19,749           $   42,093         $   59,271
                                              ===================== ================== ==================== ==================
<FN>

(1) Includes Nielsen Media Research results through the date of the spin.
</FN>

</TABLE>

Net Assets of Discontinued Operations
                                             December 31, 1997
                                           ----------------------

Current Assets                                        $   64,655
Property Plant & Equipment                                55,050
Computer Software                                         43,093
Deferred Charges                                          16,299
Other Assets                                              21,112
Current Liabilities                                     (43,921)
Other Liabilities                                       (33,510)
                                           ======================
Net Assets of Discontinued Operations                 $  122,778
                                           ======================

As of September  30, 1998,  IMS Health does not have any  ownership  interest in
Nielsen Media Research.

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  these  estimates.  Estimates  are used for:  allowance  for  uncollectible
accounts receivable, depreciation and amortization,  capitalized software costs,
employee benefit plans,  taxes,  restructuring  reserves,  preliminary  purchase
price allocations and contingencies.

Note 4. Investments

In the third  quarter of 1997,  the  Company's  voting  interest in Gartner fell
below 50% as a result of the  exercise  of Gartner  employee  stock  options and
employee stock purchases.  Accordingly,  effective  January 1, 1997, the Company
has  deconsolidated  Gartner and is accounting for its ownership  interest under
the equity basis.

The  Company  recognizes  as income  any gains or losses  related to the sale or
issuance of stock by a consolidated  subsidiary or a company accounted for under
the equity basis ("SAB 51 Gain").  In the third  quarter of 1998,  proceeds from
the issuance of shares to Gartner employees,  including associated tax benefits,
increased  Gartner's  equity by  $5,474  and  reduced  the  Company's  ownership
interest  by  less  than  1%  to  approximately   47%  at  September  30,  1998.
Accordingly,  the Company  recognized a pre-tax unrealized gain on Gartner stock
of $1,459  corresponding  to the net  increase  in the  value of its  underlying
investment in Gartner. In addition,  Gartner equity income for the third quarter
includes the Company's  share of the pre-tax loss from the sale of Gartner Group
Learning of $932. (See Note 14. Subsequent Events).

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 5. Dispositions

During the third  quarter of 1998,  the Company  recorded a $12,047  pre-tax net
gain principally  reflecting the sale of its investments in Aspect  Development,
Inc., and MediQual,  Inc.  which were part of Enterprises  portfolio and sale of
stock holdings in CTS (see Note 5 Public Offering of a Subsidiary).  These sales
generated cash proceeds of $19,267.

Note 6. Public Offering of a Subsidiary

CTS effected an initial public  offering (the "CTS IPO") of 2,917,000  shares of
Class A Common Stock, par value $0.01 per share, of CTS (3,354,550 including the
underwriters'  over-allotment  option granted by Cognizant) on June 19, 1998. Of
such shares,  2,500,000  were offered by CTS and 417,000  shares were offered by
Cognizant.  Of the total proceeds,  CTS used approximately $6.5 million to repay
intercompany debt owed to Cognizant. Cognizant's interest in CTS was transferred
to the Company in the Distribution. After the initial offering, the Company held
approximately  67.0% of the outstanding stock of CTS and accordingly,  continues
to  consolidate  CTS  results  within its  financial  statements.  Any  minority
interest is captured on the  Statement  of  Financial  Position in the  minority
interest line. The initial closing on June 24, 1998 with the Company's allocable
portion of a SAB 51 Gain being $12,777 (the "CTS IPO Gain").  The  underwriters'
over-allotment  option of 437,550  shares was exercised in full during the third
quarter.  The Company  recognized a gain of $2,731 from this sale of shares (the
"over allotment gain") and reduced its ownership in CTS to 61.8%.  CTS's Class A
Common Stock is listed on the NASDAQ  National  Market under the symbol  "CTSH".
Included below is selected financial data on CTS:


            --------------- ----------------------- ----------------------
                             Three Months Ended      Nine Months Ended
                             September 30, 1998      September 30, 1998
            --------------- ----------------------- ----------------------
            --------------- ----------------------- ----------------------
             Revenue              $  16,401              $  39,106
            --------------- ----------------------- ----------------------
            --------------- ----------------------- ----------------------
             Net Income              1,699                  3,477
            --------------- ----------------------- ----------------------

Note 7. Acquisitions

Walsh Acquisition

On June 24, 1998,  Cognizant acquired Walsh  International Inc.  ("Walsh").  The
final purchase price of the acquisition was $193,748,  consisting of $167,148 of
common  stock,  $9,521 of stock  options  to be issued  and  $17,079  of accrued
acquisition  and  integration  costs.  Under  the  terms  of  Walsh  acquisition
agreement,  Walsh  shareholders  received .3041 shares of Cognizant common stock
per  Walsh  per  share  (or,  based  on a  Cognizant  share  price  of  $51.792,
consideration  of   approximately   $167,148).   Walsh  had  10,612,628   shares
outstanding. Cognizant issued 3,227,300 shares from treasury stock to consummate
the Walsh  acquisition.  The direct  acquisition and integration cost consist of
severance of $4,876,  lease terminations of $2,569, and other direct acquisition
and integration costs of $9,634.  These direct acquisition and integration costs
are  incremental  to other costs and were  incurred  as a direct  results of the
acquisition  and  the  formal  plan to exit  certain  activities  as part of the
overall  integration effort (such as severance costs related to Walsh employees)
and certain contractual costs (such as Walsh leases).  Approximately $156,557 is
recorded as the excess of the purchase price over the fair value of identifiable
net assets (goodwill), which is being amortized on a straight-line basis over 15
years.

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 7. Acquisitions - (continued)

PMSI Acquisition

On August 5, 1998, IMS Health acquired certain non-U.S. assets of Pharmaceutical
Marketing  Services Inc.  ("PMSI").  The final purchase price of the acquisition
was $103,291,  consisting of $75,292 of common stock, $5,415 of stock options to
be issued and $22,584 of accrued  acquisition and integration  costs.  Under the
terms of PMSI  acquisition  agreement,  PMSI  received  1,197,963  shares of IMS
Health common stock issued from treasury stock,  consideration  of approximately
$75,292.  The acquisition  and integration  cost consist of severance of $3,794,
lease terminations of $1,623, contract cancellation of $10,935, and other direct
acquisition  and  integration  costs of $6,232.  These direct  acquisitions  and
integration  costs are  incremental to other costs and were incurred as a direct
results of the formal  plan to exit  certain  activities  as part of the overall
integration  effort  (such as severance  costs  related to PMSI  employees)  and
certain  contractual  cancellation  costs (such as PMSI  contracts  and leases).
Approximately  $115,275 is recorded as the excess of the purchase price over the
fair value of identifiable net assets (goodwill),  which is being amortized on a
straight-line basis over 15 years.

Purchase Price Allocation

In connection with both the  acquisitions,  the Company made  allocations of the
purchase  price  to  acquired  in-process  research  and  development  ("IPR&D")
amounting to $21,900 in the second quarter of 1998 related to Walsh  acquisition
and $10,900 in the third quarter of 1998 related to PMSI acquisition.

The Securities and Exchange  Commission  ("the SEC") has recently issued revised
guidance  with  respect to  allocations  of IPR&D  projects in  connection  with
acquisitions.  In accordance with this guidance,  the amount  allocated to IPR&D
reflects  the  relative   value  and   contribution   of  the  acquired   IPR&D.
Consideration was given to the project's stage of completion,  the complexity of
the  work  completed  to  date,  the  difficulty  of  completing  the  remaining
development,  costs  already  incurred  and the  projected  cost to complete the
projects.
In  addition,  the  Company  allocated  $29,000  at Walsh and  $7,700 at PMSI to
existing core technology, representing computer software that will be used. Such
amounts are being amortized over 5 years.

The  preliminary  allocation of the Company's  aggregate  purchase  price to the
tangible and identifiable  intangible assets acquired and liabilities assumed in
connection  with these  acquisitions  were based  primarily on estimates of fair
values by an independent appraisal firm. The allocation is summarized below:

                               Walsh                 PMSI               Total
------------------- -------------------- --------------------- ----------------
In-process R&D write-off   $   21,900           $   10,900          $   32,800
Net liabilities assumed        (5,009)             (28,274)            (33,283)
Software/ Core technology      29,000                7,700              36,700
Deferred taxes                 (8,700)              (2,310)            (11,010)
Goodwill                      156,557              115,275             271,832
========================== ============= ===================== ================
Total Purchase Price       $  193,748           $  103,291          $  297,039
========================== ============= ===================== ================
<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 7. Acquisitions - (continued)

The Company does not believe that the current purchase price allocation,  either
related  to Walsh or PMSI  acquisitions,  will  differ  significantly  from this
preliminary purchase price allocation.

At the  date  of the  respective  acquisitions,  the  development  of the  IPR&D
projects had not yet reached  technological  feasibility  and had no alternative
future  uses.  Accordingly,  these  costs  were  expensed  as of the  respective
acquisition dates.

In the  aggregate,  the  impact of both the Walsh and PMSI  acquisitions  on the
results of  operations,  other than the  charges  for  in-process  research  and
development, had they occurred on January 1, 1998 or 1997 would be immaterial.

In connection with the PMSI acquisition,  the Company commenced an evaluation of
its existing IMS Health product offerings.  Based on this strategic  assessment,
the Company decided to abandon certain IMS Health  existing  software  products.
The impact of this decision was to recognize the impairment of certain  computer
software assets ($36,300),  the closure of certain IMS facilities ($800) and the
severance of some IMS employees ($5,600).  This resulted in a one-time charge of
$43,019 recorded in the quarter as a one-time  acquisition charge as a component
of operating income.

Note 8. Investment Partnership

Two of the Company's  subsidiaries  have contributed  assets to, and participate
in, a limited  partnership.  One subsidiary  serves as general partner,  and all
other partners hold limited partnership interests.  The partnership,  which is a
separate and distinct  legal  entity,  is in the business of licensing  database
assets  and  computer  software.  In the  second  quarter  of 1997,  third-party
investors  contributed  $100,000  to the  partnership  in  exchange  for limited
partnership   interests.   For  financial   reporting   purposes,   the  assets,
liabilities,  results  of  operations  and  cash  flows of the  partnership  are
included in the Company's  consolidated financial statements because the Company
and its subsidiaries  maintain a controlling  (84%) interest in the partnership.
The  third-parties'  investments in this  partnership  are reflected in minority
interests.

Note 9. Litigation

The  Company  and  its  subsidiaries  are  involved  in  legal  proceedings  and
litigation  arising  in the  ordinary  course of  business.  In the  opinion  of
management,  the outcome of such current legal  proceedings and  litigation,  if
decided adversely, could have a material effect on quarterly or annual operating
results or cash flows when resolved in a future period.  However, in the opinion
of  management,   these  matters  will  not  materially   affect  the  Company's
consolidated financial position.

In addition,  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 IMS (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

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 9. Litigation - (continued)

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 $350,000,
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.

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 ACNielsen in 1996, D&B, ACNielsen ("ACNielsen"; 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  ACNielsen  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  ACNielsen 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 ACNielsen 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 ACNielsen,  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.

Under the terms of the Distribution  Agreement dated October 28, 1996 among D&B,
Cognizant and ACNielsen (the "1996 Distribution  Agreement"),  as a condition to
the  Distribution,  IMS  Health and  Nielsen  Media  Research  are  required  to
undertake  to be a  jointly  and  severally  liable  to D&B  and  ACNielsen  for
Cognizant's  obligations  under the 1996 Distribution  Agreement.  In connection
with the  Distribution,  IMS Health and Nielsen Media Research have agreed that,
as between  themselves,  IMS Health will assume 75%, and Nielsen Media  Research
will assume 25%, of any payments to be

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 9. Litigation - (continued)

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.  Nielsen Media Research's
aggregate  liability to IMS Health for payments in respect of the IRI Action and
certain other contingent liabilities shall not exceed $125 million.

Management of the Company is unable to predict at this time the final outcome of
this matter or whether the resolution of this matter could materially affect the
Company's results of operations, cash flows or financial position.

Note 10. Financial Instruments with Off-Balance-Sheet Risk

The  Company  transacts  business  in  virtually  every part of the world and is
subject to risks  associated with changing foreign exchange rates. The Company's
objective is to reduce earnings and cash flow volatility associated with foreign
exchange  rate changes to allow  management  to focus its  attention on its core
business activities. Accordingly the Company enters into various contracts which
change in value as  foreign  exchange  rates  change to  protect  the value of a
portion  of   committed   and   anticipated   foreign   currency   revenues  and
non-functional currency assets and liabilities. By policy, the Company maintains
hedge  coverage  between  minimum and  maximum  percentages  of its  anticipated
foreign  exchange  exposures  over the next year.  The gains and losses on these
hedges offset changes in the value of the related exposures.

It is the Company's policy to enter into foreign currency  transactions  only to
the extent  necessary to meet its  objectives as stated above.  The Company does
not enter into foreign currency transactions for speculative purposes.

The Company uses  forward  contracts  and  purchased  currency  options to hedge
committed and anticipated foreign currency denominated  revenues,  respectively.
The principal  currencies hedged are the Japanese yen, Swiss franc,  German mark
and  Italian   lira.   The  Company  also  uses   forward   contracts  to  hedge
non-functional currency assets and liabilities.

Gains and losses on contracts hedging anticipated and committed foreign currency
revenues are deferred until such revenues are recognized,  and offset changes in
the value of such revenues. At August 31, 1998, the date of the consolidation of
the Company's international operations,  the notional amount hedged was $53,000.
In  addition,  at August  31,  1998,  IMS had  approximately  $51,000 in foreign
exchange forward  contracts  outstanding  with various  expiration dates through
November 1998.  Gains and losses on contracts  hedging  non-functional  currency
assets and  liabilities  are not deferred and are included in current  income in
other income/expense-net.

Note 11. Adoption of Statements of Financial Accounting Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard ("SFAS") No. 133,  "Accounting for Derivative
Instruments  and Hedging  Activities".  SFAS No. 133 is effective for all fiscal
quarters for all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company).  SFAS No. 133 requires that all derivative instruments be recorded
on the  balance  sheet  at  their  fair  value.  Changes  in the  fair  value of
derivatives are

<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 11. Adoption of Statements of Financial Accounting Standards -(continued)

recorded  each  period  in  current  earnings  or  other  comprehensive  income,
depending on whether a derivative is  designated as part of a hedge  transaction
and, if it is, the type of hedge transaction.  For fair-value hedge transactions
in which the  Company is hedging  changes in an  asset's,  liability's,  or firm
commitment's fair value, changes in the fair value of the derivative  instrument
will generally be offset in the income statement by changes in the hedged item's
fair value.  For cash-flow hedge  transactions,  in which the Company is hedging
the variability of cash flows related to a variable-rate asset,  liability, or a
forecasted  transaction,  changes in the fair value of the derivative instrument
will be  reported  in other  comprehensive  income.  The gains and losses on the
derivative  instrument that are reported in other  comprehensive  income will be
reclassified  as earnings in the periods in which  earnings  are impacted by the
variability of the cash flows of the hedged item. The ineffective portion of all
hedges will be recognized in current  period  earnings.  Management is currently
evaluating the effects of this change on the Company's financial statements.

In 1997, the Company adopted Statement of Financial  Accounting Standard No. 131
"Disclosures  About  Segments  of an  Enterprise  and Related  Information".  As
required,  the Company has  restated  prior period  segment  results in order to
conform to the new statement.  The Company,  operating globally in approximately
80 countries,  delivers  information,  software and related services principally
through the strategic business segments referenced below.

The IMS  segment  represents  the  Company's  operations,  which are the leading
global  providers  of  market   information,   sales   management   systems  and
decision-support  services to the pharmaceutical and healthcare industries.  The
Emerging Markets segment  includes Erisco, a leading supplier of  software-based
administrative  and analytical  solutions to the managed care  industry;  CTS, a
provider of software  application  development and maintenance services and Year
2000 and Eurocurrency  compliance  services;  Super Systems Japan, a marketer of
financial application software products to the Japanese market; Enterprises, the
Company's  venture  capital unit focused on investments  in emerging  healthcare
businesses;  and  Pilot  Software  Inc.("Pilot"),  which was sold as of July 31,
1997.

The  accounting  policies  of these  reportable  segments  are the same as those
described for the consolidated  entity. The Company evaluates the performance of
its operating segments based on revenue and operating income.

<TABLE>


                                             --- ---------------------------------- --    -- -------------------------------------
Period Ended September 30, 1998                            Three Months                                  Nine Months
-------------------------------
                                             --- ---------------------------------- --    -- -------------------------------------
                                             ------------ -------------- ------------    ------------ --------------- ------------
<S>                                             <C>         <C>             <C>              <C>          <C>             <C>

                                                 IMS        Emerging        Total            IMS         Emerging        Total
                                                           Markets (1)                                 Markets (1)
                                             ------------ -------------- ------------    ------------ --------------- ------------
Operating Revenue                               $257,411        $26,195     $283,606        $730,234         $64,836     $795,070
Segment Operating Income (2)                      $8,922         $3,602      $12,524         $63,035          $6,188      $69,223
General Corporate Expenses (3)                                              $(7,771)                                    $(59,654)
Interest Income (4)                               $2,806           $257      $3,063           $6,956            $337      $7,293
Interest Expense (5)                              $(178)                     $(178)           $(558)                      $(558)
Non-Operating Income/(Expense) - Net
   Gartner Equity Income, Net                                                $16,902                                      $52,794
   Gain on Gartner Stock   (SAB 51)                                           $1,459                                      $14,838
   Gartner Loss on Sale/R&D write-off                                         $(932)                                     $(3,930)
   Gains from Dispositions - Net                                $10,248      $10,248                         $33,440      $33,440
   Other Income - Net                                                         $2,379                                       $1,739
                                           ------------ --------------- ------------    -------------- --------------- -----------
Income from  Continuing  Operations  Before
Provision for Income Taxes                                                   $37,694                                     $115,185
Provision for Income Taxes                                                  $(12,739)                                   $(49,596)
                                           ------------ --------------- ------------    -------------- -------------- ------------
Income from Continuing Operations                                            $24,955                                      $65,589
Income from Discontinued Operations,
 Net of Income Taxes                                                              $0                                      $42,093
-------------------------------------------- ------------ -------------- ------------    ------------ --------------- ------------
Net Income                                                                   $24,955                                     $107,682
-------------------------------------------- ------------ -------------- ------------    ------------ --------------- ------------

</TABLE>





<PAGE>

IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 12. Operations by Business Segment (continued)

<TABLE>


Period Ended September 30, 1997                            Three Months                                  Nine Months
-------------------------------
<S>                                             <C>           <C>           <C>             <C>         <C>             <C>

                                             --- ---------------------------------- --    -- ------------------------------------
                                                IMS         Emerging        Total            IMS        Emerging        Total
                                                           Markets (1)                                 Markets (1)
                                            ------------- -------------- ------------    ------------ -------------- ------------
Operating Revenue                               $233,196        $17,934     $251,130        $672,382        $59,129     $731,511
Segment Operating Income/(Loss)                  $63,953         $2,221      $66,174        $157,624      $(16,498)     $141,126
General Corporate Expenses                                                  $(7,000)                                   $(20,989)
Interest Income (4)                               $1,321            $46       $1,367          $3,203           $123       $3,326
Interest Expense (5)                              $(128)         $(70)        $(198)          $(540)         $(347)       $(887)
Non-Operating Income/(Expense) - Net
   Gartner Equity Income                                                     $13,758                                     $44,429
   Gain on Gartner Stock   (SAB 51)                                             $706                                        $706
   Gains from Dispositions - Net                                 $3,955       $3,955                         $9,391       $9,391
    Other Income  - Net                                                       $1,671                                      $3,002
------------------------------------------- ------------- -------------- ------------ -- ------------ -------------- --------------
Income from Continuing Operations
Before Provision for Income Taxes                                            $80,433                                    $180,104
Provision for Income Taxes                                                  $(23,116)                                   $(49,349)
------------------------------------------ ------------- -------------- -------------   -------------- ------------- -------------
Income from Continuing Operations                                            $57,317                                    $130,755
Income from Discontinued Operations,
 Net of  Income Taxes                                                        $19,749                                     $59,271
------------------------------------------- ------------- -------------- ------------    ------------ -------------- ------------
Net Income                                                                   $77,066                                    $190,026
------------------------------------------- ------------- -------------- ------------    ------------ -------------- ------------

<FN>
         Notes to Operations by Business Segments:

         (1) Excludes  intersegment sales in 1998 of $2,669, and $10,576 for the
 three and nine month periods  presented,  respectively.  Excludes  intersegment
 sales in 1997 of  $3,035,  and  $8,541  for the  three and nine  month  periods
 presented,  respectively. These sales, primarily from CTS to IMS, are accounted
 for on a time and materials  basis and  recognized as the service is performed.
 As discussed in Note 5. Public  Offering of a Subsidiary,  the initial  closing
 for the CTS IPO occurred on June 24,1998 and selected  financial data on CTS is
 provided in that note.
(2) Segment operating income in 1998 includes a one-time in-process research and
development  write-off estimate of $10,900 related to the PMSI acquisition.  The
one-time in-process research and development  write-off related to the Walsh and
PMSI  acquisitions for the nine month period presented is $32,800.  In addition,
segment  operating income in 1998 include direct  acquisition  integration costs
related to the Walsh and PMSI acquisitions of $43,019, and $48,019 for the three
and nine month periods presented,  respectively.  (3) General Corporate Expenses
in 1998  include  one-time  spin-related  charges of $35,025  for the nine month
period  presented.  (4) Interest  income in 1998  excludes  amounts  recorded at
corporate of $4,178 and $8,817 for the three and nine month  periods  presented,
respectively.  Interest income in 1997 excludes amounts recorded at corporate of
$1,774 and $5,091 for the three and nine month periods presented,  respectively.
(5) Interest  expense in 1998 excludes amounts recorded at corporate of $157 and
$189 for the three and nine  month  periods  presented,  respectively.  Interest
expense in 1997 excludes  amounts recorded at corporate of $109 and $217 for the
three and nine month periods presented, respectively.
</FN>
</TABLE>

<PAGE>


IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 13. Comprehensive Income

In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income",
which  requires  that  changes in  comprehensive  income be shown in a financial
statement  that is  displayed  with  the  same  prominence  as  other  financial
statements.  This  statement,  which the Company adopted in the first quarter of
1998,  establishes  standards for reporting and displaying  comprehensive income
and its components in a full set of general purpose financial statements.  Where
applicable,  earlier  periods have been restated to conform to the standards set
forth in SFAS No.  130.  The  Company's  Comprehensive  Income  consists  of net
income,   foreign  currency  translation   adjustments  and  unrealized  holding
gains/(losses)   on  securities  (see  Condensed   Consolidated   Statements  of
Comprehensive   Income).   Accumulated   balances  of   Cumulative   Translation
Adjustments and Unrealized  Gains/(Losses)  on Investments,  as of September 30,
1998 are as follows:

<TABLE>
<S>                                      <C>                   <C>                         <C>

                                        Cumulative              Unrealized                   Total Other
                                        Translation           Gains/(Losses)                Comprehensive
                                        Adjustment            on Investments      (1)           Items
                                   ---------------------- ----------------------- ----- ----------------------
Balance December 31, 1997                      $(76,771)                 $32,650                    $(44,121)
Current Period Change                            (9,421)                (10,590)                     (20,011)
================================== ====================== ======================= ===== ======================
Balance September 30, 1998                     $(86,192)                 $22,060                    $(64,132)
================================== ====================== ======================= ===== ======================
<FN>

(1) Current  period  change  is  principally  due  to  the  sale  of  Enterprise
    investments in Aspect Development, Inc. and MediQual, Inc.
</FN>
</TABLE>

Note 14. Subsequent Events

On October 20,  1998,  the Company  announced  that its Board of  Directors  had
authorized a systematic stock repurchase program to buy up to 8.0 million shares
of the Company's outstanding common stock.

On November  11,  1998 the Company  announced  that its Board of  Directors  has
approved a plan,  in  principle,  to  spin-off  substantially  all of its equity
ownership  of Gartner.  The  transaction,  expected to be completed in the first
half of 1999, is to be structured as a tax-free distribution of Gartner stock to
IMS Health shareholders.

The  Company  owns  approximately  47 million  shares of  Gartner.  Prior to the
spin-off,  40.1 million of these shares will be exchanged for new Class B Common
Stock of Gartner.  The Class B Stock will be entitled to elect 80% of  Gartner's
Board of Directors,  but will  otherwise be identical to existing Class A Common
Stock.  The  exchange  will be part of a Gartner  recapitalization  and requires
approval by Gartner shareholders.  The Class B shares will be distributed to the
Company's  shareholders  in a  tax-free  distribution,  subject  to receipt of a
favorable  tax ruling from the  Internal  Revenue  Service  with  respect to the
distribution.  The Company intends to monetize its remaining position in Gartner
by the end of 1999.  This includes 6.9 million shares and warrants to purchase a
further 600,000 shares.


<PAGE>


IMS HEALTH INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)
Dollar amounts in thousands, except per share data

Note 14. Subsequent Events - (continued)

Separately,  Gartner announced that, subject to approval by the Internal Revenue
Service of the tax-free  treatment of the distribution,  it intends to declare a
special  one-time  cash  dividend  of  $300,000  to its  shareholders  of record
immediately prior to the spin-off. The Gartner Board of Directors has authorized
a $300,000  open  market  share  repurchase  program  for up to 20% of its stock
commencing immediately after the spin-off.

The  transaction  is subject to receipt of a favorable  ruling from the Internal
Revenue  Service,  final  approval  by  the  Company's  and  Gartner  Boards  of
Directors, and approval by Gartner shareholders.



<PAGE>


IMS HEALTH INCORPORATED
Item 2.  Management's  Discussion  and Analysis of Financial  Condition 
         and Results of Operations 
         (Dollar  amounts in thousands, except per share data)

This document  relates to IMS Health  Incorporated  ("IMS  Health").  The Common
stock of IMS Health was distributed by Cognizant  Corporation  ("Cognizant")  to
its shareholders on June 30, 1998.  Simultaneously  with the  distribution  (the
"Distribution")  Cognizant  changed  its name to Nielsen  Media  Research,  Inc.
("Nielsen Media Research").  Notwithstanding the legal form of the distribution,
whereby Cognizant spun off IMS Health,  for accounting  purposes the transaction
is accounted for as if Cognizant spun off Nielsen Media  Research,  Inc. and IMS
Health has been deemed the "accounting  successor" to Cognizant.  The separation
created IMS Health as the premier global  provider of  information  solutions to
the  pharmaceutical  and healthcare  industries,  and established an independent
Nielsen Media Research,  the leader in electronic audience measurement services.
IMS  Health  consists  of  operations  of  the  Company  and  various  operating
subsidiaries  including Erisco, Inc.  ("Erisco"),  Enterprise  Associates,  Inc.
("Enterprises"),  Cognizant Technology  Solutions  Corporation ("CTS"), SSJ K.K.
("Super  Systems  Japan"),  and an equity  investment  in  Gartner  Group,  Inc.
("Gartner").

Cognizant  received a favorable  ruling from the Internal  Revenue  Service with
respect to the tax-free  treatment of the  transaction in May 1998.  Cognizant's
Board of  Directors  on June  15,  1998  approved  the  final  plan,  terms  and
conditions relating to the separation of the company including distribution, tax
allocation,  employee benefits and other agreements and authorized management to
execute the plan of distribution.  The Board of Directors declared a dividend to
shareholders  of record as of the close of business on June 25, 1998  consisting
of one share of IMS  Health  Common  Stock for each  share of  Cognizant  Common
Stock. The Distribution was effective June 30, 1998.

In connection with the Distribution, Cognizant borrowed $300 million on June 24,
1998,  which  was used to repay  existing  intercompany  liabilities.  This debt
remained the obligation of Nielsen Media Research following the Distribution. In
connection with the Distribution,  Cognizant  contributed to IMS Health all cash
in  Cognizant's  accounts  other than (i) cash  required by  Cognizant  (renamed
Nielsen Media Research) to satisfy certain  specified  obligations and (ii) such
additional  cash as was necessary for the net  borrowings of Cognizant  (renamed
Nielsen Media Research) to equal $300 million as of the Distribution.

Prior to the  Distribution,  Nielsen Media  Research and IMS Health entered into
certain  agreements  that will govern the  relationship  between  Nielsen  Media
Research  and IMS Health  subsequent  to the  Distribution  and  provide for the
allocation  of  tax,   employee  benefits  and  certain  other  liabilities  and
obligations that may arise from periods prior to the  Distribution.  Among other
things,  the agreements set forth principles to be applied in allocating certain
Distribution-related  costs and specify portions of contingent liabilities to be
shared if certain amounts are exceeded  (including certain  liabilities that may
arise in connection with the 1996 spin-off of Cognizant from D&B).

Pursuant to Accounting  Principles Board ("APB") No. 30,  "Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," the
consolidated  financial  statements  of the Company  have been  reclassified  to
reflect Nielsen Media Research as discontinued  operations for periods up to and
including  June 30, 1998 and reflects the  Distribution  which  occurred on June
30,1998.

As of September  30, 1998,  IMS Health does not have any  ownership  interest in
Nielsen Media Research.


<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

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  these  estimates.  Estimates  are used for:  allowance  for  uncollectible
accounts receivable, depreciation and amortization,  capitalized software costs,
employee benefit plans,  taxes,  restructuring  reserves,  preliminary  purchase
price allocations and contingencies.

Public Offering of a Subsidiary

CTS effected an initial public  offering (the "CTS IPO") of 2,917,000  shares of
Class A Common Stock, par value $0.01 per share, of CTS (3,354,550 including the
underwriters'  over-allotment  option granted by Cognizant) on June 19, 1998. Of
such shares,  2,500,000  were offered by CTS and 417,000  shares were offered by
Cognizant.  Of the total proceeds,  CTS used approximately $6.5 million to repay
intercompany debt owed to Cognizant. Cognizant's interest in CTS was transferred
to the  Company in the  Distribution.  After  completion  of the  offering,  the
Company  approximately  67.0% of the outstanding  stock of CTS and  accordingly,
continues  to  consolidate  CTS results  within its  financial  statements.  Any
minority  interest is captured on the  Statement  of  Financial  Position in the
minority  interest  line.  The  transaction  closed  on June 24,  1998  with the
Company's allocable portion of a SAB 51 Gain being $12,777 (the "CTS IPO Gain").
The underwriters'  over-allotment  option of 437,550 shares was exercised during
the third quarter. The Company recognized a gain of $2,731 from this sale ("over
allotment gain") and reduced its ownership in CTS to 61.8%. CTS's Class A Common
Stock is listed on the NASDAQ National Market under the symbol "CTSH".

Walsh Acquisition

On June 24, 1998 Cognizant acquired Walsh  International,  Inc.  ("Walsh").  The
total  purchase price of the  acquisition  was $193,748,  including  $167,148 of
common  stock,  $9,521 of stock  options  to be issued  and  $17,079  of accrued
acquisition  and  integration  costs.  Under  terms  of  the  Walsh  acquisition
agreement,  Walsh  shareholders  received .3041 shares of Cognizant  Corporation
common stock per Walsh share (or,  based on a Cognizant  share price of $51.792,
consideration  of   approximately   $167,148).   Walsh  had  10,612,628   shares
outstanding. Cognizant issued 3,227,300 shares from treasury stock to consummate
the Walsh  acquisition.  The direct acquisition and integration costs consist of
severance of $4,876 lease  terminations  of $2,569 and other direct  acquisition
and integration costs of $9,634.  These direct acquisition and integration costs
are  incremental  to other  costs and were  incurred  as a direct  result of the
formal plan to exit certain activities as part of the overall integration effort
(such as severance  costs related to Walsh  employees)  and certain  contractual
cancellation  costs (such as Walsh  leases).  The impact of the  acquisition  on
results  of  operations,  other  than the charge  for  in-process  research  and
development,  had it occurred  January 1, 1998 or 1997 would be  immaterial.  To
date incurred  acquisition and integration costs are within original  estimates.
Approximately $156,557 will be recorded as the excess of the purchase price over
the fair value of  identifiable  net assets,  also known as  goodwill,  which is
being amortized on a straight-line basis over 15 years.



<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

PMSI Acquisition

     IMS Health acquired certain  non-U.S.  assets of  Pharmaceutical  Marketing
Services Inc.  ("PMSI") on August 5, 1998. The purchase price of the acquisition
was $103,291,  including $75,292 of common stock,  $5,415 of stock options to be
issued and $22,584 of accrued acquisition integration costs.

Under terms of the PMSI acquisition agreement, PMSI received 1,197,963 shares of
IMS Health common stock, consideration of approximately $75,292. The acquisition
integration costs consist of severance of $3,794,  lease terminations of $1,623,
contract  cancellation  costs of  $10,935,  and  other  direct  acquisition  and
integration  costs of $6,232.  These direct  acquisition  integration  costs are
incremental  to other costs and were  incurred as a direct  result of the formal
plan to exit certain activities as part of the overall  integration effort (such
as  severance  costs  related  to  PMSI   employees)  and  certain   contractual
cancellation costs (such as PMSI contracts and leases).  Approximately  $115,275
is  recorded  as the  excess  of the  purchase  price  over  the  fair  value of
identifiable net assets (goodwill),  which is being amortized on a straight-line
basis over 15 years.

Purchase Price Allocation

The  Company  made  allocations  of the  aggregate  purchase  price to  acquired
in-process  research and development  ("IPR&D")  amounting to $21,900 related to
the Walsh acquisition and $10,900 related to the PMSI acquisition.

The  Securities  and Exchange  Commission  (the "SEC")  recently  issued revised
guidance  with  respect to  allocations  of IPR&D  projects in  connection  with
acquisitions.  In accordance with this guidance,  the amount  allocated to IPR&D
reflects  the  relative   value  and   contribution   of  the  acquired   IPR&D.
Consideration was given to the project's stage of completion,  the complexity of
the  work  completed  to  date,  the  difficulty  of  completing  the  remaining
development,  costs  already  incurred  and the  projected  cost to complete the
projects.

The  preliminary  allocation of the Company's  aggregate  purchase  price to the
tangible and identifiable intangible assets acquired and liabilities assumed was
based  primarily on  independent  appraisals  of  estimates  of fair value.  The
allocation is summarized as follows:

                                     Walsh            PMSI             Total
  In-process R&D write-off      $   21,900       $   10,900        $   32,800
  Net liabilities assumed           (5,009)         (28,274)          (33,283)
  Software/Core technology          29,000            7,700            36,700
  Deferred taxes                    (8,700)          (2,310)          (11,010)
  Goodwill                         156,557          115,275           271,832
------------------------------ ---------------- ---------------- --------------
   Total Purchase Price         $  193,748       $  103,291        $  297,039
----------------------------- ---------------- ---------------- ---------------


The Company does not believe that the current price  allocation,  either related
to Walsh or PMSI acquisitions,  will differ  significantly from this preliminary
purchase price allocation.

<PAGE>



IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

In the  aggregate,  the  impact of both the Walsh and PMSI  acquisitions  on the
results of operations, other than the one-time charges and the charge for IPR&D,
had it occurred January 1, 1998 or 1997, would be immaterial.

At the  date  of the  respective  acquisitions,  the  development  of the  IPR&D
projects had not yet reached  technological  feasibility  and had no alternative
future use. Accordingly, these costs were expensed as of the acquisition date.

The projects  identified as in-process research and development at Walsh include
enhancement  of Walsh's  Windows  based  sales  management  information  system,
enhancement  of its  pharmaceutical  marketing  database  and  development  of a
next-stage  integrated and enhanced sales management  information system.  These
projects  were  identified  as  underway  at  Walsh  and,  at  the  date  of the
acquisition,   would  require  additional  effort  to  establish   technological
feasibility.  In addition,  based on a third party  independent  appraiser,  the
Company  allocated  $29,000 to existing core  technology  representing  computer
software that is currently in use, which is being amoritzed over 5 years.

The  projects   identified  as  in-process  and   development  at  PMSI  include
significant  improvements of PMSI's  physician  database  products in Europe and
Japan and to its pharmacy software system in the United Kingdom.  These projects
were identified as being underway at PMSI, at the date of the  acquisition,  and
would  require  additional  effort to establish  technological  feasibility.  In
addition,  based on a third party independent  appraiser,  the Company allocated
$7,700 to  existing  core  technology  representing  computer  software  that is
currently in use, which is being amortized over 5 years.

The amounts  assigned to the IPR&D projects were determined by first  estimating
the degree of  completion  of each project and the potential net cash flows from
such  projects  after  commercial  introduction.  The  potential  net cash flows
include  reductions  reflecting  the  necessary  investment in fixed and working
capital and other  collateral  assets,  which  include  core  technology,  where
appropriate  and a fair return on those  assets.  A portion of the potential net
cash flows for each project was then attributed to the effort already  completed
by Walsh and PMSI by the acquisition  date,  based upon the estimated  degree of
completion.  The  attributed  potential  net cash  flows for each  project  were
discounted to present value using a risk-adjusted discount rate.

The discount rates utilized to value the IPR&D projects  ranged from 17% to 30%.
Such  discount  rates took into account the industry risk for the Walsh and PMSI
businesses  acquired (as evidenced by the  calculated  weighted  average cost of
capital),  technology development risk associated with completing the in-process
projects,  and market and commercial risk  associated  with  introducing the new
products/technology.  The  implied  weighted  average  cost of  capital  for the
different Walsh and PMSI projects ranged from 12% to 15%.

The degree of completion represents the extent to which the different in-process
projects are complete,  as of the  acquisition  date. The completion  percentage
ranged from 53% to 87% for

<PAGE>

IMS HEALTH INCORPORATED
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)
 (Dollar amounts in thousands, except per share data)

projects  at Walsh  and 80% to 90% for  projects  at  PMSI.  In the  opinion  of
management, IMS Health is on target to begin  realizing  the benefits from these
various  projects  through  product  introductions  at launch dates ranging from
early 1999 to January 2000.

The Company believes that the assumptions used,  including the revenue forecasts
and margin analysis,  are reasonable.  No assurance can be given,  however, that
the underlying assumptions used to estimate expected project sales,  development
costs or profitability,  or events associated with such projects, will transpire
as  estimated.  For these  reasons,  actual  results may vary from the projected
results.

Management  expects to continue  supporting these IPR&D efforts and believes the
Company has a reasonable  chance of successfully  completing the IPR&D programs.
However,  there is risk associated with the completion of the IPR&D projects and
the Company  cannot be assured that any will meet with either  technological  or
commercial success.

If none of these  IPR&D  projects  are  successfully  developed  the  sales  and
profitability  of the Company may be adversely  affected in future periods.  The
failure of any particular  individual  project  in-process  would not materially
impact the Company's financial  condition,  results of operations or cash flows.
Operating  results are subject to uncertain  market events and risks,  which are
beyond  the  Company's  control,  such  as  trends  in  technology,   government
regulations,  market size and growth, and product  introduction or other actions
by competitors.

In connection with the PMSI acquisition,  the Company commenced an evaluation of
its existing IMS Health product offerings.  Based on this strategic  assessment,
the Company decided to abandon  certain of its existing  software  products.
The impact of this decision is to recognize the  impairment of certain  computer
software assets ($36,000),  the closure of certain IMS facilities ($800) and the
severance of some IMS employees ($5,600).  This resulted in a one-time charge of
$43,019 and is included as a component of operating income.

Investment in Gartner

In September 1997, the Company's  voting interest in Gartner fell below 50% as a
result of the exercise of Gartner  employee  stock  options and  employee  stock
purchases.   Accordingly,   effective   January  1,  1997,   the   Company   has
deconsolidated Gartner (the "Gartner Deconsolidation") and is accounting for its
ownership interest under the equity basis. The Company also recognizes as income
any gains or losses  related to the sale or issuance of stock by a  consolidated
subsidiary or a company accounted for under the equity basis ("SAB 51 Gain").

Operations

Revenue for the third  quarter  increased by 12.9% to $283,606 from $251,130 for
the third  quarter of the prior year.  Year-to-date  revenue  increased  8.7% to
$795,070 from $731,511 for the comparable  period a year ago. Revenue growth for
the quarter and  year-to-date  was reduced by the absence of revenues from Pilot
Software Inc. ("Pilot") since its divestiture on July 31, 1997 and the impact of
a

<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)


stronger U.S. dollar.  Adjusting for these items,  revenue for the third quarter
and  year-to-date  increased  by 18.8% and 15.9%,  respectively.  This  increase
reflected  double-digit  constant  dollar revenue growth at IMS, Erisco and CTS.
The impact of a stronger U.S. dollar decreased reported revenue by approximately
5% in the third  quarter  and 4%  year-to-date,  including  the  impact of gains
related to the Company's hedging strategy.

Operating  income for the third  quarter  was  $4,753,  a decrease of 92.0% from
operating  income of $59,174 for the third quarter of the prior year.  Operating
income in the third quarter includes Year 2000 compliance  costs of $11,780;  an
in-process research and development  write-off of $10,900 and direct acquisition
integration costs of $43,019 related to the PMSI acquisition.

Year-to-date  operating  income was $9,569,  a decrease of 92.0% from  operating
income of $120,137 for the comparable period a year ago. Year-to-date  operating
losses  include Year 2000  compliance  costs of $34,081;  one-time  spin-related
charges of $35,025;  in-process  research and development  write-offs of $32,800
and direct  acquisition  integration  costs of $48,019  related to the Walsh and
PMSI acquisitions.

Adjusting  for these items and the impact of a stronger U.S.  dollar,  operating
income for the third  quarter and  year-to-date  of 1998  increased by 29.3% and
44.9%,  respectively.  Adjusted  operating income growth outpaced revenue growth
primarily due to the absence of Pilot operating  losses since its divestiture on
July 31, 1997.

Non-operating  income-net for the third quarter was $32,941compared with $21,259
for the third quarter of the prior year.  This increase is primarily  related to
realizing  certain  divestitures  and  higher  gains  in  1998 on the  sales  of
Enterprises'  investments of $9,316 compared with 1997 gains of $3,955;  the CTS
over  allotment  gain of $2,731;  and recording a higher  pre-tax SAB 51 Gain on
Gartner stock of $1,459 compared with the 1997 gain of $706; partially offset by
recording,  within Gartner equity income, the Company's share of a loss from the
sale of the Gartner Learning Business of $932.

Year-to-date non-operating income-net was $105,616 compared with $59,967 for the
comparable  period a year ago. This  increase is primarily  related to realizing
higher gains in 1998 on the sale of Enterprises' investments of $19,731 compared
with 1997 gains of $9,391;  the CTS IPO Gain of $12,777;  the CTS over allotment
gain of $2,731;  and recording a pre-tax SAB 51 Gain on Gartner stock of $14,838
compared  with the 1997  gain of $706;  partially  offset by  recording,  within
Gartner  equity  income,  the  Company's  share of an  in-process  research  and
development  write-off  at  Gartner  of  $2,998  and a loss from the sale of the
Gartner Learning Business of $932.

The  Company's  effective  tax rate was  33.8% for the  third  quarter  of 1998,
compared  with an effective  tax rate of 28.7% in the  comparable  period of the
prior  year.  The third  quarter  1998  effective  tax rate was  impacted by the
estimated  in-process  research and development  write-off of $10,900 related to
the PMSI acquisition.  This did not give rise to a tax benefit.  Excluding these
items, the Company's effective tax rate was 27.4% for the third quarter of 1998.


<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Year-to-date  the  Company's  effective  tax rate was  43.1%,  compared  with an
effective  tax  rate of  27.4%  in the  comparable  period  of the  prior  year.
Excluding the one-time  spin-related  charges, the estimated in-process research
and  development  write-offs  related  to the  Walsh and PMSI  acquisitions  and
certain  non-deductible  direct  acquisition  integration  costs related to both
acquisitions, the effective tax rate from operations year-to-date was 27.4%.

Income from  continuing  operations  in the third  quarter of 1998 was  $24,955,
compared with income from continuing  operations of $57,317 in the third quarter
of the prior year, a decrease of 56.5%.  Excluding the  after-tax  impact of the
SAB 51 Gain in both years;  Enterprise  gains in both years;  CTS over allotment
gain; Year 2000 compliance  costs;  and the in-process  research and development
write-off  and  direct  acquisition   integration  costs  related  to  the  PMSI
acquisition,  income from  continuing  operations  increased 23.2% to $66,569 in
1998.

Year-to-date  income from  continuing  operations  was  $65,589,  compared  with
$130,755 of the prior year, a decrease of 49.8%.  Excluding the after-tax impact
of gains associated with Enterprises' investments in both years; the SAB 51 Gain
in both years; the CTS over allotment and IPO gains; Year 2000 compliance costs;
the one-time  spin-related  charges;  and the estimated  in-process research and
development  write-offs and direct acquisition  integration costs related to the
Walsh and PMSI acquisitions,  income from continuing  operations increased 29.3%
to $159,601 in 1998.

Year-to-date income from discontinued operations net of income taxes was $42,093
(which includes six months of Nielsen Media Research 1998 operations),  compared
with $59,271 in nine months of the prior year.

The Company's  net income for the third quarter of 1998 was $24,955,  a decrease
of 67.6%  from net income of  $77,066  in the third  quarter of the prior  year.
Excluding  the  after-tax  impact of Year 2000  compliance  costs,  the one-time
spin-related   charges,   the  estimated  in-process  research  and  development
write-offs,  the direct acquisition  integration costs, the SAB 51 Gain, and the
CTS over allotment gain, and discontinued operations in 1997, net income for the
quarter increased 23.2%

The Company's  year-to-date net income decreased 43.3% to $107,682 from $190,026
for the comparable  period of the prior year.  Excluding the after-tax impact of
Year 2000 compliance  costs, the one-time  spin-related  charges,  the estimated
in-process   research  and  development   write-offs,   the  direct  acquisition
integration   costs,  the  SAB  51  Gain,  gains  associated  with  Enterprises'
investments,  the CTS over allotment and IPO gains, and discontinued  operations
in both years, year-to-date net income increased 29.3%.

Basic earnings per share from continuing operations in the third quarter of 1998
were $.15 a decrease of 57.1%.  Excluding the after-tax impact of the previously
identified  one-time items,  basic earnings per share for the quarter  increased
24.2%.

Diluted  earnings per share from  continuing  operations in the third quarter of
1998 decreased  55.9% to $.15 from $.34 for the  comparable  period of the prior
year. Excluding the after-tax impact of the previously identified one-time items
diluted earnings per share for the quarter increased 21.9%.



<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Year-to-date basic earnings per share from continuing operations decreased 49.4%
to $.40 from $.79 for the  comparable  period of the prior year.  Excluding  the
after-tax impact of the previously identified one-time items, year-to-date basic
earnings per share increased 32.4%.

Year-to-date  diluted  earnings per share from continuing  operations  decreased
50.0% to $.39 from $.78 for the comparable  period of the prior year.  Excluding
the after-tax impact of the previously  identified one-time items,  year-to-date
diluted earnings per share increased 28.4%.

On October 20,  1998,  the Company  announced  that its Board of  Directors  had
authorized a systematic stock repurchase program to buy up to 8.0 million shares
of the Company's outstanding common stock. This is in addition to the previously
approved  program to repurchase 9.3 million shares.  As of November 10, 1998 the
Company has purchased 9.2 million shares.

Results by Business Segment

As  discussed in Note 11  Operations  by Business  Segment,  in 1997 the Company
adopted SFAS No. 131  "Disclosures  About  Segments of an Enterprise and Related
Information"  which changes the way public  companies report  information  about
segments.  As  required,  the Company has  restated the prior period in order to
conform to the 1998 presentation.

The IMS segment  represents the Company's  principle  operations,  which are the
leading global providers of market  information,  sales  management  systems and
decision-support  services to the pharmaceutical and healthcare industries.  IMS
revenue for the third quarter of 1998 increased  10.4% to $257,411 from $233,196
in the third  quarter of the prior year.  Adjusting for the impact of a stronger
U.S. dollar,  revenue for the third quarter 1998 increased by 15.4%. IMS revenue
growth benefited from strong performance of its sales management products.

 Income  from IMS for the third  quarter  was  $8,922,  a decrease  of 86% from
operating  income of $63,953 in the third  quarter of the prior year.  Operating
income in the third  quarter of 1998  includes  $11,780 of costs related to Year
2000 compliance; an estimate of in-process research and development write-off of
$10,900 and direct acquisition  integration costs of $43,019 related to the PMSI
acquisition.  Excluding these costs, costs related to 1997 year 2000 compliance,
and the impact of a stronger U.S. dollar, operating income for the third quarter
of 1998 increased 17.4%.

Year-to-date  IMS revenue  increased 8.6% to $730,234 from $672,382 of the prior
year.  Adjusting for the impact of a stronger U.S. dollar,  revenue year-to-date
1998 increased by 13.2%.  IMS operating income  year-to-date  decreased 60.0% to
$63,035 from $157,624 in year-to-date of the prior year.  Year-to-date operating
income includes Year 2000  compliance  costs of $34,081;  one-time  spin-related
charges of $35,025;  in-process  research and development  write-offs of $32,800
and direct  acquisition  integration  costs of $48,019  related to the Walsh and
PMSI  acquisitions.  Excluding  these  costs,  costs  related  to 1997 year 2000
compliance,  and  the  impact  of  a  stronger  U.S.  dollar,  operating  income
year-to-date 1998 increased 17.3%.

<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Results by Business Segment (continued)

The  Emerging   Markets  segment   includes   Erisco,   a  leading  supplier  of
software-based  administrative  and  analytical  solutions  to the managed  care
industry;  CTS, a provider of software applications  development and maintenance
services  and Year 2000 and  Eurocurrency  compliance  services;  Super  Systems
Japan,  a marketer of financial  application  software  products to the Japanese
market; Enterprises,  the Company's venture capital unit, focused on investments
in emerging healthcare businesses; and Pilot which was sold as of July 31, 1997.

Emerging  Markets  revenue  for the third  quarter  of 1998  increased  46.1% to
$26,195 from $17,934 in the third  quarter of the prior year.  This increase was
primarily due to strong growth at CTS. Emerging Markets operating income for the
third quarter of 1998 increased to $3,602 from operating income of $2,221 in the
third quarter of the prior year.  This increase was primarily due to the absence
of losses from Pilot since its divestiture and strong performance at CTS.

Year-to-date  revenue in Emerging Markets increased 9.7% to $64,836 from $59,129
in the prior  year,  reflecting  the  absence of  revenues  from Pilot since its
divestiture.  Excluding  the effect of Pilot and the  impact of a stronger  U.S.
dollar, revenue increased 59.5%.

Year-to-date  operating income in Emerging Markets  increased to $6,188 compared
to an  operating  loss of $16,498 for the  comparable  period of the prior year.
This  increase was  primarily  due to the absence of losses from Pilot since its
divestiture.

Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1998 and 1997

Net cash provided by operating  activities  totaled $155,559 for the nine months
ended  September 30, 1998 compared  with $199,028 for the  comparable  period in
1997. The decrease of $43,469 principally  reflects lower net income in 1998 and
a lower increase in deferred revenues ($17,329).  These decreases were partially
offset by a greater  decrease in accounts  receivable  in 1998  compared with in
1997  ($7,263),  and an increase in accrued income taxes in 1998 compared with a
decrease in 1997 ($8,352).

Net cash used in investing  activities  totaled  $30,750 for 1998  compared with
$37,050 for the comparable period in 1997. The decrease of $6,300 is principally
due to lower capital  expenditures  in 1998 compared to 1997  ($13,683) and cash
received from companies  acquired in stock  purchases in 1998  ($11,895).  These
sources of cash were  partially  offset by an increase in other  investments  in
1998 compared with a decrease in 1997 ($20,973).

Net cash used in financing activities totaled $100,215 for the nine months ended
September 30, 1998 compared with $205,593 for the comparable period in 1997. The
reduction in cash usage from financing  activities of $105,378 was primarily due
to proceeds  from the debt  assumed by Nielsen  Media  Research  ($300,000),  an
increase in proceeds  from the exercise of stock options in 1998  ($61,638),  as
compared  with 1997  ($11,365) and proceeds  from the CTS IPO  ($27,128).  These
increases were partially offset by the absence of minority interest financing in
1998  ($100,000) and higher cash payments for the purchase of treasury shares in
1998 compared to 1997 ($208,856).


<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Changes in Financial Position at September 30, 1998 Compared to
 December 31, 1997

Investment  in Gartner Group  increased to $238,551 at September 30, 1998,  from
$195,695 at December 31, 1997, reflecting principally equity income-net of taxes
($27,884) and a gain on the sale of Gartner stock ($14,838).

Goodwill  increased to $352,465 at September 30, 1998,  from $87,430 at December
31, 1997,  primarily  reflecting the Walsh  acquisition  ($156,557) and the PMSI
acquisition ($115,275).

Assets from Discontinued  Operations decreased to $0 at September 30, 1998, from
$122,778  at  December  31,  1997,  due to the  distribution  of  Nielsen  Media
Research.

Accounts and Notes  Payable  increased to $91,800 at  September  30, 1998,  from
$44,441 at December 31, 1997, primarily  reflecting  borrowings in Japan and the
inclusion of the Walsh and PMSI businesses.

Deferred  Revenue  increased to $145,169 at September 30, 1998, from $110,768 at
December 31, 1997, primarily reflecting higher sales at IMS and the inclusion of
the Walsh and PMSI businesses.

Shareholders'  Equity increased to $801,603 at September 30, 1998, from $801,570
at December 31, 1997,  primarily  reflecting the issuance of stock in connection
with  acquisitions  ($234,854),  the  proceeds  of  bank  borrowings  net of the
dividend  of Nielsen  Media  Research's  net  liability  ($109,830),  net income
($107,682),  and proceeds from stock option exercises ($61,638). These increases
were partially  offset by cash dividends paid  ($14,805),  currency  translation
adjustments ($9,421) and treasury share repurchases ($510,867).

Adoption of Statements of Financial Accounting Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard ("SFAS") No. 133,  "Accounting for Derivative
Instruments  and  Hedging  Activities".  SFAS 133 is  effective  for all  fiscal
quarters for all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company).  SFAS 133 requires that all derivative  instruments be recorded on
the balance sheet at their fair value.  Changes in the fair value of derivatives
are  recorded  each period in current  earnings or other  comprehensive  income,
depending on whether a derivative is  designated as part of a hedge  transaction
and, if it is the type of hedge  transaction.  For fair-value hedge transactions
in which the  Company is hedging  changes in an  asset's,  liability's,  or firm
commitment's fair value, changes in the fair value of the derivative  instrument
will generally be offset in the income statement by changes in the hedged item's
fair value.  For cash-flow hedge  transactions,  in which the Company is hedging
the variability of cash flows related to a variable-rate asset,  liability, or a
forecasted  transaction,  changes in the fair value of the derivative instrument
will be  reported  in other  comprehensive  income.  The gains and losses on the
derivative  instrument that are reported in other  comprehensive  income will be
reclassified  as earnings in the periods in which  earnings  are impacted by the
variability of the cash flows of the hedged item. The ineffective portion of all
hedges will be recognized in current  period  earnings.  Management is currently
evaluating the effects of this change on the Company's financial statements.


<PAGE>


IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)


         Year 2000

Many existing computer systems and software  applications use two digits, rather
than four, to record years, e.g., "98" instead of "1998". Unless modified,  such
systems will not properly record or interpret years after 1999, which could lead
to business disruptions. This is known as the Year 2000 issue.

The  Company  began to  address  the Year 2000  issue in 1996,  when it began to
assess the impact on its  operations.  In 1997, the Company  created a Year 2000
Task  Force  (the  "task  force")  to manage  overall  risks  and to  facilitate
activities across the entire Company. CTS, a majority owned subsidiary, is being
used to convert the majority of the systems to allow most internal staff members
to focus on the core  business.  The Company has also used  outside  services to
assist in conversion  and to assess the progress of its Year 2000  program.  The
Company has  identified its Year 2000 areas of focus as systems and software for
the  creation  and  delivery of its  products  and systems and  software for its
internal administrative operations.

The task force  developed a conversion  methodology  that included three phases:
analysis, coding and testing, and testing and implementation. The analysis phase
includes  planning,  inventory and impact analysis.  Coding and testing involves
code changes,  using conversion  rules and criteria and unit testing,  verifying
and  documenting  the  results of the  conversion.  Testing  and  implementation
includes  system test across  platforms and  verification of data, an acceptance
test within the user  environment  and  implementation  or releasing the systems
back  into  production.   This  conversion  methodology  has  been  communicated
throughout  the Company and is being utilized to achieve  systems  compliance by
the Year 2000.

The creation of customer  products  relies on the receipt of data from  external
data  suppliers  and the  Company's  ability to convert the data and deliver the
information  to its  customers.  The  consolidation  of the data is  principally
performed  at  central  processing  locations.   The  Company  operates  central
processing facilities in Germany,  England, United States and Japan. The systems
at these sites contained the most lines of code required to undergo  conversion.
The following is a status report of each location as of September 30, 1998:

 ------------------- --------------------------------- ------------------------
   Location     % of  Line of Code Tested and            Target completion date
                      Implemented to date
 ------------------ --------------------------------- -------------------------
 ------------------- --------------------------------- ------------------------
 Germany             68% lines of code converted        90% of central systems
                                                        schedule for 12/98
                                                        target date - balance
                                                        Q1 1999
 ------------------- --------------------------------- ------------------------
 ------------------- --------------------------------- ------------------------
 England             43% lines of code converted        80% of central systems
                                                        schedule for 12/98
                                                        target date - balance
                                                        Q1 1999
 ------------------- --------------------------------- ------------------------
 ------------------- --------------------------------- ------------------------
 United States        74% lines of code converted       90% of central systems
                                                        schedule  for 12/98
                                                        target date - balance
                                                        Q1 1999
 ----------------- --------------------------------- -------------------------
 ----------------- --------------------------------- -------------------------
 Japan               79% lines of code converted        80% of central systems
                                                        schedule for 12/98
                                                        target date - balance
                                                        Q1 1999
 ------------------- --------------------------------- -----------------------


<PAGE>

IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Year 2000  (continued)

The Company has also  developed an internal  audit  program  which  examines the
testing and effectiveness of controls, assesses the accuracy and completeness of
inventories and reviews the documentation  for completeness and accuracy.  As of
September  30, 1998 audits  occurred  in England and  Germany,  with a follow up
scheduled for early 1999 and an audit of the United States  planned  November of
1998.

As part  of its  Year  2000  conversion,  the  task  force  has  identified  and
prioritized  key data  suppliers.  In order to increase  awareness  of Year 2000
issues of its data suppliers and customers,  the Company has developed a program
consisting of seminars, visits, mailings, and telephone calls.

Due to the Company's  reliance on data  suppliers it is  developing  contingency
plans. This includes addressing  interfaces and system changes for data with the
Company's systems, identifying stop-gap procedures for a temporary lack of data,
and a plan for statistical extrapolation if necessary.

The  Company  has a process  in place to  convert  its  internal  administrative
operations systems and software.  These operations include accounts  receivable,
payroll,  accounts  payable and the general ledger  systems.  The conversions of
these  systems will  substantially  be completed by the end of 1998.  Testing is
expected to be completed by the end of the first quarter of 1999.

Throughout  1999 the  Company's  efforts  will;  (i) heavily focus on testing of
critical  components of the Company's  systems;  (ii) continue the assessment of
supplier and customer  readiness to address the Year 2000  conversion and; (iii)
finalize contingency plans to address unanticipated issues.

External and internal costs of addressing  the Year 2000 issue are expensed.  It
is currently estimated that the aggregate cost of the Company's Y2K program will
be approximately $65 to $70 million.  Through September 30, 1998 the Company has
incurred $43.9 million. These estimates do not include the costs of software and
systems that are being replaced or upgraded in the normal course of business.

The cost of  addressing  the Year 2000  issue and the date on which the  Company
currently expects to complete Year 2000 compliance are based on the current best
estimates  of  management,  which  are  derived  utilizing  various  assumptions
regarding the future events. There can be no guarantee that these estimates will
be achieved, and actual results may differ materially. Specific factors that may
cause  such  material   differences   include,  but  are  not  limited  to,  the
availability  and cost of  personnel  trained  in this  area of  expertise,  the
ability to locate and correct all relevant  computer  codes,  and the success of
customers and suppliers in addressing the Year 2000 issue.

The above expectations are subject to uncertainties. For example, if the Company
is  unsuccessful in identifying or fixing all Year 2000 problems in its critical
operations,  or  effected  by the  inability  of its  data  suppliers  or  major
customers to continue operations due to such a problem, the Company's results of
operations or financial condition could be materially impacted.

<PAGE>

IMS HEALTH INCORPORATED

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued) (Dollar amounts in thousands, except per share data)

Euro Conversion

On January 1, 1999, certain member countries of the European Union are scheduled
to establish fixed  conversion  rates between their existing  currencies and the
European  Union's  common  currency  ("Euro").  The  transition  period  for the
introduction of the Euro will be between January 1, 1999 and January 1, 2002.

 The  Company  has  been  preparing  for the  introduction  of the  Euro  and is
currently  addressing the many issues involved with its introduction,  including
the conversion of information  technology systems,  recalculating currency risk,
recalibrating derivatives and other financial instruments, strategies concerning
continuity of contracts, and impacts on the processes for preparing taxation and
accounting records, and the increased price transparency  resulting from the use
of the single currency in the eleven participating  countries,  which may affect
the ability of the Company and other companies to price products  differently in
the various European markets. Nevertheless, differences in national market size,
data collection requirements and specific product specifications required due to
the diverse market  information  needs in the  Healthcare  markets of Europe are
expected to reduce the potential for price harmonization in most product ranges.

IMS Health's expectations  regarding the Euro currency issue are forward-looking
statements that involve a number of risks and uncertainties that could cause the
actual results to differ materially from the projected results. Factors that may
cause  these  differences  include,  but are not  limited  to,  the  ability  or
willingness of third parties to convert affected systems in a timely manner; the
ability of the Company to modify its systems and  processes in a timely  manner;
and the actions of governmental  agencies or other third parties with respect to
Euro currency issues.


<PAGE>


IMS HEALTH INCORPORATED

PART II.  OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits:

10   Material Contracts:
  .1  Distribution Agreement between Cognizant and IMS Health Incorporated dated
      as of June 30, 1998. (incorporated by reference to Exhibit 10.1 to the IMS
      Health  Report on Form 10Q for the  quarter  ended  June 30,  1998,  filed
      August 14, 1998, file number 001-14049).
  .2  Tax Allocation  Agreement  between  Cognizant and IMS Health  Incorporated
      dated as of June 30, 1998.  (incorporated  by reference to Exhibit 10.2 to
      the IMS Health  Report on Form 10Q for the  quarter  ended June 30,  1998,
      filed August 14, 1998, file number 001-14049).
  .3  Employee Benefits  Agreement between Cognizant  Corporation and IMS Health
      Incorporated  dated as of June 30,  1998.  (incorporated  by  reference to
      Exhibit  10.3 to the IMS Health  Report on Form 10Q for the quarter  ended
      June 30, 1998, filed August 14, 1998, file number 001-14049).
  .4  Amended  and  Restated  Transition  Services  Agreement  between The Dun &
      Bradstreet Corporation,  The New Dun & Bradstreet  Corporation,  Cognizant
      Corporation,  IMS Health Incorporated,  ACNielsen  Corporation and Gartner
      Group,  Inc.  dated as of June 30,  1998.  (incorporated  by  reference to
      Exhibit  10.4 to the IMS Health  Report on Form 10Q for the quarter  ended
      June 30, 1998, filed August 14, 1998, file number 001-14049).
  .5  Undertaking  of  IMS  Health  Incorporated  dated  as of  June  29,  1998.
      (incorporated  by reference  to Exhibit  10.5 to the IMS Health  Report on
      Form 10Q for the quarter ended June 30, 1998,  filed August 14, 1998, file
      number 001-14049).
  .6  Distribution Agreement among Cognizant  Corporation,  The Dun & Bradstreet
      Corporation  and  ACNielsen  Corporation  dated  as of  October  28,  1996
      (incorporated by reference to Exhibit 10.1 to Cognizant's Annual Report on
      Form 10-K for the year ended December 31, 1996, filed March 27, 1997, file
      number 001-12275).
  .7  Tax Allocation Agreement among Cognizant Corporation, The Dun & Bradstreet
      Corporation  and  ACNielsen  Corporation  dated  as of  October  28,  1996
      (incorporated by reference to Exhibit 10.2 to Cognizant's Annual Report on
      Form 10-K for the year ended December 31, 1996, filed March 27, 1997, file
      number 001-12275).
  .8  Employee  Benefits  Agreement  among  Cognizant  Corporation,  The  Dun  &
      Bradstreet  Corporation and ACNielsen  Corporation dated as of October 28,
      1996  (incorporated  by reference to Exhibit  10.3 to  Cognizant's  Annual
      Report on Form 10-K for the year ended December 31, 1996,  filed March 27,
      1997, file number 001-12275).
  .9  Indemnity and Joint Defense Agreement among Cognizant Corporation, The Dun
      & Bradstreet Corporation and ACNielsen Corporation dated as of October 28,
      1996  (incorporated  by reference to Exhibit  10.4 to  Cognizant's  Annual
      Report on Form 10-K for the year ended December 31, 1996,  filed March 27,
      1997, file number 001-12275).
  .10 TAM  Master  Agreement   between   Cognizant   Corporation  and  ACNielsen
      Corporation  dated as of October 28, 1996  (incorporated  by  reference to
      Exhibit 10.5 to Cognizant's  Annual Report on Form 10-K for the year ended
      December 31, 1996, filed March 27, 1997, file number 001-12275).

27   Financial Data Schedules.

(b) Reports on 8-K:
      A report on Form 8-K was filed on June 30,  1998 to report  under  Item 5,
      Other  Events,  pursuant to  Accounting  Principles  Board ("APB") No. 30,
      "Reporting the Results of Operations--Reporting the effects of Disposal of
      a Segment of a  Business,  and  Extraordinary,  Unusual  and  Infrequently
      Occurring  Events and  Transactions;  and Item 7, Financial  Statements to
      present the consolidated  financial statements and associated notes of the
      Company to reflect Nielsen Media as a discontinued  operation. A report on
      Form  8-K/A  was  filed on June 30,  1998 to report  under  Item 5,  Other
      Events,  and Item 7,  Financial  Statements  A report on Form  8-K/A-1 was
      filed on July 23, 1998 to report under Item 5, Other  Events,  and Item 7,
      Financial  Statements  A report on Form 8-K/A-2 was filed on July 23, 1998
      to report under Item 5, Other Events, and Item 7, Financial Statements


<PAGE>


                               SIGNATURES

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


                      IMS Health Incorporated




                    BY: /s/ J. MICHAL CONAWAY
                    -----------------------------------------------
                             J. Michal Conaway
                             Chief Financial Officer



                    BY:  /s/ JAMES C. MALONE
                    ------------------------------------------------
                              James C. Malone
                       Senior Vice President - Finance & Controller

Date: February 24, 1999



<PAGE>