UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended ~~September~~March 3031, ~~2014~~2015

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

COMMISSION FILE NUMBER: 333-187931

Truven Holding Corp.

(Exact name of registrant parent guarantor as specified in its charter)



Delaware	7374	45-5164353
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Truven Health Analytics Inc.

(Exact name of registrant issuer as specified in its charter)



Delaware	7374	06-1467923
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

777 E. Eisenhower Parkway

Ann Arbor, Michigan 48108

(Address of registrants' principal executive offices)

(734) 913-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

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

Large accelerated filer ¨ Accelerated Filer ¨ Non-accelerated filer þ smaller reporting company ¨

(do not check if a smaller reporting company)

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

As of ~~November~~May 37, ~~2014~~2015, there was one outstanding share of each of the registrants.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Interim Condensed Consolidated Balance Sheets - As of September 30, 2014 and December 31, 2013	1
	Unaudited Interim Condensed Consolidated Balance Sheets - As of March 31, 2015 and December 31, 2014	1
	Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss - For the three and nine months ended September 30, 2014 and September 30, 2013	2
	Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss - For the three months ended March 31, 2015 and March 31, 2014	2
	Unaudited Interim Condensed Consolidated Statements of Cash Flows - For the nine months ended September 30, 2014 and September 30, 2013	3
	Unaudited Interim Condensed Consolidated Statements of Cash Flows - For the three months ended March 31, 2015 and March 31, 2014	3
	Unaudited Interim Condensed Consolidated Statement of Equity - For the nine months ended September 30, 2014	5
	Unaudited Interim Condensed Consolidated Statement of Equity - For the three months ended March 31, 2015	4
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	65
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4240
Item 4.	Controls and Procedures	4340
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	4542
Item 1A.	Risk Factors	4542
Item 5.	Other Information	4542
Item 6.	Exhibits	4643
Signatures		4744

Definition of Terms

Unless otherwise indicated or the context otherwise requires, references in this report to:


•	the term “Holdings LLC” refers to VCPH Holdings LLC, a Delaware limited liability company;

• the terms “~~the~~ Company”, ~~“Truven Holding”,~~ "we", "us", ~~"our"~~ and "~~Parent~~our" refer to Truven Holding Corp., aand ~~Delaware~~Truven ~~corporation~~Health ~~that~~Analytics isInc., ~~directly~~together ~~owned~~with bytheir ~~Holdings LLC~~subsidiaries;


•	the terms “Truven Holding” and "Parent" refer to Truven Holding Corp., a Delaware corporation that is directly owned by Holdings LLC and that is the direct parent of Truven;


•	the term “TRHI” refers to Thomson Reuters (Healthcare) Inc., a Delaware corporation, which, upon consummation of the Merger, became a direct wholly-owned subsidiary of VCPH Holding Corp. (now known as Truven Holding) and subsequently changed its name to Truven Health Analytics Inc.;

• the term “Thomson Reuters Healthcare” refers to TRHI, together with certain other assets and liabilities of the Thomson Reuters Healthcare business prior to and including the date of the closing of the Prior Acquisition on June 6, 2012;

• the ~~term~~terms “~~Wolverine~~Truven” ~~refers~~and the “Issuer” refer to ~~Wolverine~~Truven ~~Healthcare~~Health Analytics, Inc., a Delaware corporation and ~~an affiliate of The Veritas Capital Fund IV, L.P.,~~ a ~~private equity fund managed by Veritas Capital, which was formed on May 16, 2012 as a~~ direct wholly-owned subsidiary of ~~VCPH Holding Corp. (now known as~~ Truven Holding~~) and~~, ~~upon consummation of the Acquisition, merged with~~ and ~~into TRHI, with TRHI surviving the Merger as a direct wholly-owned subsidiary of VCPH Holding Corp. (now known as Truven Holding) and subsequently changing~~ its ~~name to Truven Health Analytics Inc.~~subsidiaries;

• the ~~terms~~term “~~Truven~~Prior Acquisition” refers to the acquisition by Wolverine of 100% of the equity interests of TRHI and certain assets and liabilities of the ~~“Issuer”~~Thomson ~~refer~~Reuters Healthcare business, pursuant to the Stock and Asset Purchase Agreement, dated as of April 23, 2012, which VCPH Holding Corp. (now known as Truven ~~Health~~Holding) ~~Analytics~~entered into with Thomson Reuters U.S. Inc., aand ~~Delaware~~Thomson ~~corporation~~Reuters Global Resources and asubsequently ~~direct~~assigned ~~wholly-owned~~to ~~subsidiary~~Wolverine ofon ~~Truven~~May ~~Holding~~24, 2012, and which closed on June 6, 2012;

• the term “~~Acquisition~~Wolverine” refers to ~~the~~Wolverine ~~acquisition~~Healthcare byAnalytics, ~~Wolverine~~Inc., ofa ~~100%~~Delaware ofcorporation ~~the~~and ~~equity~~an ~~interests~~affiliate of ~~TRHI~~The ~~and~~Veritas ~~certain~~Capital ~~assets~~Fund ~~and~~IV, ~~liabilities~~L.P., ofa ~~the~~private ~~Thomson~~equity ~~Reuters~~fund ~~Healthcare~~managed ~~business,~~by ~~pursuant~~Veritas toCapital, ~~the~~which ~~Stock~~was ~~and~~formed ~~Asset~~on ~~Purchase~~May ~~Agreement~~16, ~~dated~~2012 as ofa ~~April~~direct ~~23,~~wholly-owned ~~2012,~~subsidiary ~~which~~of VCPH Holding Corp. (now known as Truven Holding) ~~entered~~and, ~~into~~upon ~~with~~consummation of the ~~Stock~~Prior ~~Seller~~Acquisition, merged with and ~~Thomson~~into ~~Reuters~~TRHI, ~~Global~~with ~~Resources~~TRHI ~~and~~surviving ~~subsequently~~the ~~assigned~~Merger toas ~~Wolverine~~a ondirect ~~May~~wholly-owned ~~24,~~subsidiary ~~2012,~~of VCPH Holding Corp. (now known as Truven Holding) and ~~which~~subsequently ~~closed~~changed onits ~~June~~name 6,to ~~2012~~Truven Health Analytics Inc.;

• the term “Merger” refers to the merger upon the closing of the Prior Acquisition, whereby Wolverine (which was formed solely for the purpose of completing the Prior Acquisition) merged with and into TRHI, with TRHI surviving the Merger as a direct wholly-owned subsidiary of VCPH Holding Corp. (now known as Truven Holding) and subsequently changing its name to Truven Health Analytics Inc.;

• the term “Stock Seller” refers to Thomson Reuters U.S. Inc.;


•	the terms “Sponsor” and “Veritas Capital” refers to Veritas Capital Fund Management, L.L.C.;

• the ~~terms~~term “Thomson Reuters” ~~and the “Predecessor Parent”~~ refers to Thomson Reuters Corporation;

• the term “Stock and Asset Purchase Agreement” ~~refer~~refers to the Stock and Asset Purchase Agreement among VCPH Holding Corp., ~~the~~Thomson ~~Stock~~Reuters ~~Seller~~U.S. Inc. and Thomson Reuters Global Resources, dated as of April 23, 2012, which VCPH Holding Corp. assigned to Wolverine on May 24, 2012;

• the term "Notes" refers to the 10.625% Senior Notes.;

• the term "Senior Credit ~~Facility"~~Agreement, ~~refers~~dated toas of June 6, 2012, among Truven Holding, Truven Health Analytics Inc., the ~~Term~~several ~~Loan~~lenders ~~Facility~~from time to time parties thereto, Morgan Stanley Senior Funding, Inc. and ~~Revolving~~UBS ~~Credit~~Securities ~~Facility~~LLC, ~~from~~as ~~syndicate~~co-documentation ofagents, ~~banks~~Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndication agent, and ~~other~~JPMorgan ~~financial~~Chase ~~institutions~~Bank, N.A., as administrative agent, as amended from time to time;

• the term "~~Old~~Senior ~~Notes~~Credit Facility" refers to the ~~10.625%~~Term ~~Senior~~Loan ~~Notes,~~Facility ~~Series~~and A,Revolving ~~issued~~Credit inFacility ~~a private offering~~ under anthe ~~indenture,~~senior ~~dated~~credit ~~June 6, 2012.~~agreement;

• the term "~~Exchange~~Old Notes" refers to the 10.625% Senior Notes, Series BA, ~~registered~~issued ~~under~~in ~~the~~a ~~United~~private ~~States~~offering ~~Securities~~under ~~Act~~an ofindenture, ~~1933~~dated June 6, 2012, and which were exchanged for the Exchange Notes (as ~~amended.~~defined below);

• the term "~~Simpler~~Exchange Notes" refers to ~~Simpler~~the ~~Consulting, L~~10.P.625% ~~and~~Senior ~~certain~~Notes, ofSeries ~~its affiliated entities and persons~~B, ~~which~~registered ~~was~~under ~~acquired~~the byU.S. ~~certain~~Securities ~~wholly-owned~~Act ~~subsidiaries~~ of ~~the Company on April 11~~1933, ~~2014.~~as amended;

• the term "~~Simpler~~Additional ~~Transaction~~Notes" refers to ~~execution of~~ the ~~Purchase Agreement in April 11, 2014, whereby Truven indirectly acquired all of the outstanding equity of Simpler in exchange for a purchase price of $81~~10.1625% ~~million,~~Senior ~~including a preliminary working capital adjustment of $1.1 million~~Notes, ~~and~~Series ~~the issuance by Holdings LLC~~A, ~~the~~that ~~direct~~were ~~parent~~issued ofon ~~the~~November ~~Company~~12, ~~of $3.7 million of equity interests to Simpler.~~2014;


•	the term "Simpler" refers to Simpler Consulting, LLC. and certain of its affiliated entities and persons, which was acquired by certain wholly-owned subsidiaries of the Company on April 11, 2014;


•	the term "JWA" refers to Joan Wellman and Associates, Inc. which was acquired by the Company on October 31, 2014 and


•	the term "HBE" refers to HBE Solutions, LLC which was acquired by certain wholly-owned subsidiaries of the Company on November 12, 2014.

iii

Part I - FINANCIAL INFORMATION

Item 1. Financial Information

Truven Holding Corp.

Unaudited Interim Condensed Consolidated Balance Sheets

~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014

(with the exception of common stock, in thousands of dollars, unless otherwise indicated)

	September 30, 2014			December 31, 2013
	March 31, 2015			December 31, 2014
Assets
Current assets
Cash and cash equivalents	$	2228,~~484~~287		$	1012,~~255~~604
Trade and other receivables (less allowances of $1,249 and $1,530, respectively)	90,238			97,798
Trade and other receivables (less allowances of $1,276 and $1,244, respectively)	103,671			120,214
Prepaid expenses and other current assets	3028,~~667~~220			2430,~~208~~251
Total current assets	143,389			132,261
Deferred tax assets	443			621
Computer hardware and other property, net	35,456			48,037
Total current assets	160,621			163,690
Developed technology and content, net	133,654			148,637
Computer hardware and other property, net	34,035			37,435
Goodwill	485,917			457,677
Developed technology and content, net	129,496			134,078
Other identifiable intangible assets, net	377,071			362,014
Goodwill	498,820			498,820
Other noncurrent assets	14,428			15,977
Other identifiable intangible assets, net	369,854			382,879
Deferred tax asset	6,234			—
Other noncurrent assets	15,369			16,187
Total assets	$	1,~~196~~208,~~149~~195		$	1,~~164~~233,~~603~~089
Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses	$	6468,~~570~~468		$	5367,~~376~~228
Deferred revenue	~~111~~135,~~967~~097			~~128~~129,~~392~~129
Current portion of long-term debt	6,360			56,~~350~~360
Capital lease obligation	~~656~~673			~~1,596~~664
Deferred tax liabilities	7,483			711
Current taxes payable	43			173
Current taxes payable	290			189
Total current liabilities	210,641			203,554
Total current liabilities	191,326			189,614
Deferred revenue	6,306			5,456
Deferred revenue	4,652			2,096
Capital lease obligation	1,203			1,374
Capital lease obligation	1,544			2,102
Long-term debt	970,580			971,362
Long-term debt	945,907			866,908
Deferred tax liabilities	443			621
Deferred tax liabilities	—			22,027
Other noncurrent liabilities	3,420			3,599
Other noncurrent liabilities	3,540			2,573
Total liabilities	1,192,593			1,185,966
Total liabilities	1,146,969			1,085,320
Equity
Common stock—$ 0.01 par value; 1,000 shares authorized, 1 share issued and outstanding at September 30, 2014 and December 31, 2013	—			—
Common stock—$ 0.01 par value; 1,000 shares authorized, 1 share issued and outstanding at March 31, 2015 and December 31, 2014	—			—
Additional paid-in capital	483,~~234~~861			~~478~~483,~~549~~550
Accumulated deficit	(~~433~~468,~~778~~133		)	(~~399~~436,~~101~~123		)
Foreign currency translation adjustment	(~~276~~126		)	(~~165~~304		)
Total equity	4915,~~180~~602			7947,~~283~~123
Total liabilities and equity	$	1,~~196~~208,~~149~~195		$	1,~~164~~233,~~603~~089

See the notes to these unaudited condensed consolidated financial statements.

Truven Holding Corp.

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

(in thousands of dollars, unless otherwise indicated)

	Three months ended September 30,						Nine months ended September 30,
	Three months ended March 31,
	2014			2013			2014			2013
	2015			2014
Revenues, net	$	~~140~~143,~~187~~173		$	~~123~~118,~~594~~262		$	~~394,874~~		$	~~363,481~~
Operating costs and expenses Cost of revenues, excluding depreciation and amortization	(7583,~~089~~829		)	(6470,~~293~~287		)	~~(221,098~~		)	~~(200,983~~		)
Selling and marketing, excluding depreciation and amortization	(1315,~~087~~934		)	(1213,~~899~~724		)	~~(42,623~~		)	~~(42,111~~		)
General and administrative, excluding depreciation and amortization	(1416,~~398~~882		)	(1211,~~387~~285		)	~~(39,095~~		)	~~(31,326~~		)
Depreciation	(45,~~931~~135		)	(56,~~422~~593		)	~~(17,448~~		)	~~(14,411~~		)
Amortization of developed technology and content	(910,~~820~~809		)	(89,~~228~~197		)	~~(28,689~~		)	~~(23,672~~		)
Amortization of other identifiable intangible assets	(1113,~~960~~025		)	(8,615		)	~~(32,843~~		)	~~(25,845~~		)
Other operating expenses	(510,~~826~~338		)	(86,~~278~~529		)	~~(17,201~~		)	~~(28,778~~		)
Total operating costs and expenses	(~~135~~155,~~111~~952		)	(~~120~~126,~~122~~230		)	~~(398,997~~		)	~~(367,126~~		)
Operating income (loss)	5,076			3,472			(4,123		)	(3,645		)
Operating loss	(12,779		)	(7,968		)
Net interest expense	(1718,~~663~~472		)	(16,~~661~~273		)	~~(51,352~~		)	~~(54,753~~		)
Other finance costs	(81469		)	(1976		)	~~(417~~		)	~~(472~~		)
Loss before income taxes	(1231,~~668~~720		)	(1324,~~208~~317		)	~~(55,892~~		)	~~(58,870~~		)
Benefit from income taxes	6,048			4,865			21,215			21,902
Benefit from (provision for) income taxes	(290		)	5,060
Net loss	$	(632,~~620~~010	)	$	(819,~~343~~257	)	$	~~(34,677~~	)	$	~~(36,968~~	)
Other comprehensive loss:
Foreign currency translation adjustments	~~(26~~$	178	)	~~(17~~$	(139	)	~~(111~~		)	~~(19~~		)
Total comprehensive loss	$	(631,~~646~~832	)	$	(819,~~360~~396	)	$	~~(34,788~~	)	$	~~(36,987~~	)

See the notes to these unaudited condensed consolidated financial statements.

Truven Holding Corp.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands of dollars, unless otherwise indicated)

	Nine months ended September 30,
	Three months ended March 31,
	2014			2013
	2015			2014
Operating activities
Net loss	$	(3432,~~677~~010	)	$	(3619,~~968~~257	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	175,~~448~~135			146,~~411~~593
Amortization of developed technology and content	2810,~~689~~809			239,~~672~~197
Amortization of other identifiable intangible assets	3213,~~843~~025			258,~~845~~615
Amortization of debt issuance costs	1,878			1,931
Amortization of debt issue costs	734			626
Amortization of debt discount	~~2,421~~808			~~1,922~~720
Amortization of unfavorable leasehold interest	—			(9447		)
Loss on extinguishment of debt	—			2,353
Asset write-off	6,000			4,706
Deferred income tax benefit	~~(21,490~~—		)	(225,~~383~~362		)
Share-based compensation expense	~~955~~311			~~1,137~~240
Retention bonus in conjunction with the Acquisition	—			1,378
Changes in operating assets and liabilities:
Asset write-off	4,706			—
Trade and other receivables	16,640			16,000
Changes in operating assets and liabilities, net of business combinations:
Prepaid expenses and other current assets	(4,019		)	(6,028		)
Trade and other receivables	15,320			13,328
Accounts payable and accrued expenses	5,746			7,239
Prepaid expenses and other current assets	(10,739		)	(4,453		)
Deferred revenue	6,728			7,099
Accounts payable and accrued expenses	14,438			(7,203		)
Income taxes	(109		)	146
Deferred revenue	(14,469		)	(13,415		)
Other	(94		)	130
Income taxes	101			289
Net cash provided by operating activities	29,704			30,617
Other	638			(599		)
Net cash provided by operating activities	38,062			1,151
Investing activities
Acquisition of Simpler, net of cash acquired	(77,400		)	—
Acquisition - payment of working capital adjustment	(91		)	—
Capital expenditures	(2412,~~412~~355		)	(3410,~~853~~299		)
Net cash used in investing activities	(~~101~~12,~~812~~446		)	(3410,~~853~~299		)
Continued on next page
Financing activities
Principal repayment of senior term loan	(1,590		)	(1,338		)
Repayment of revolving credit facility	—			(15,000		)
Payment of capital lease obligation	(163		)	(1,120		)
Net cash used in financing activities	(1,753		)	(17,458		)
Effect of exchange rate changes in cash and cash equivalents	178			(138		)
Net increase in cash and cash equivalents	15,683			2,722
Cash and cash equivalents
Beginning of period	12,604			10,255
End of period	$	28,287		$	12,977



Supplemental cash flow disclosures
Interest paid	$	7,149	$	6,236
Income taxes paid	$	176	$	156

	Nine months ended September 30,
	2014			2013
Financing activities
Additional capital contribution	—			1,950
Proceeds from revolving credit facility	15,000			15,000
Principal repayment of senior term loan	(4,517		)	(3,994		)
Repayment of revolving credit facility	(30,000		)	—
Proceeds from senior term loan related to refinancing	100,000			86,105
Principal repayment of senior term loan related to refinancing	—			(74,772		)
Premium payment for refinancing the credit facility	—			(5,760		)
Payment of debt issuance costs	(2,895		)	—
Payment of capital lease obligation	(1,498		)	(844		)
Net cash provided by financing activities	76,090			17,685
Effect of exchange rate changes in cash and cash equivalents	(111		)	(19		)
Net increase (decrease) in cash and cash equivalents	12,229			(16,036		)
Cash and cash equivalents
Beginning of period	10,255			23,805
End of period	$	22,484		$	7,769

Supplemental cash flow disclosures
Interest paid	$	38,182			$	38,100

See the notes to these unaudited condensed consolidated financial statements.

Truven Holding Corp.

Unaudited Interim Condensed Consolidated Statement of Equity

~~Nine~~Three months ended ~~September~~March 3031, ~~2014~~2015

(in thousands of dollars, unless otherwise indicated)

	Common stock		Additional paid-in capital		Accumulated deficit			Accumulated other comprehensive loss			Total equity
Balance at December 31, 2013	$	—	$	478,549	$	(399,101	)	$	(165	)	$	79,283
Balance at December 31, 2014	$	—	$	483,550	$	(436,123	)	$	(304	)	$	47,123
Additional capital contribution	—		3,730		—			—			3,730
Share-based compensation expense	—		311		—			—			311
Share-based compensation expense	—		955		—			—			955
Foreign currency translation adjustment	—		—		—			178			178
Foreign currency translation adjustment	—		—		—			(111		)	(111		)
Net loss	—		—		(32,010		)	—			(32,010		)
Net loss	—		—		$	(34,677	)	—			(34,677		)
Balance at March 31, 2015	$	—	$	483,861	$	(468,133	)	$	(126	)	$	15,602
Balance at September 30, 2014	$	—	$	483,234	$	(433,778	)	$	(276	)	$	49,180

See the notes to these unaudited condensed consolidated financial statements.

Truven Holding Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands of dollars, unless otherwise indicated)


1.	Description of Business and Basis of Presentation

Description of the Business

~~On April 23, 2012, VCPH Holding Corp. (now known as~~ Truven Holding ~~Corp.,),~~was anformed affiliate of Veritas Capital, entered into the Stock and Asset Purchase Agreement with Thomson Reuters U.S. Inc. ("TRUSI") and Thomson Reuters Global Resources ("TRGR"), both affiliates of the Thomson Reuters Corporation, which the Company assigned to Wolverine on ~~May~~April 2420, 2012. ~~Wolverine is an affiliate of The Veritas Fund IV, L.P., a fund managed~~ by Veritas Capital. ~~Pursuant~~for to the ~~Stock~~purpose ~~and Asset Purchase Agreement, on June 6, 2012, Wolverine acquired 100%~~ of ~~the~~consummating ~~equity interests of TRHI from TRUSI and certain other assets and liabilities of~~ the ~~Thomson~~Prior ~~Reuters Healthcare business from TRGR and its affiliates. Upon the closing of the~~ Acquisition, ~~Wolverine merged with~~ and ~~into~~has ~~TRHI,~~had ~~with~~no ~~TRHI~~operations ~~surviving~~from ~~the~~inception ~~Merger~~other asthan ~~a direct wholly-owned subsidiary of the Company, and subsequently changed~~ its ~~name~~investment toin Truven ~~Health Analytics Inc. (Truven). Following the Merger, the assets acquired~~ and ~~liabilities~~its ~~assumed are owned by Truven, which remains a direct wholly-owned subsidiary of the Company~~subsidiaries.

Truven provides analytic ~~healthcare data and analytics~~ solutions and ~~services~~service toofferings ~~key~~across ~~constituents~~the infull ~~the~~spectrum of healthcare ~~system~~constituents, including ~~employers~~state and ~~health plans,~~ federal government agencies, ~~state~~hospitals, ~~government~~health ~~agencies~~systems, ~~hospitals~~employers, ~~clinicians~~health ~~and~~plans, ~~pharmaceutical~~life sciences companies and consumers. Truven operates and manages its business under two reportable segments: Commercial and Government ~~(see Note 8)~~.

The Company was formed on April 20, 2012 by Veritas Capital for the purpose of consummating the Acquisition and has had no operations from inception other than its investment in Truven.

Basis of Presentation

These unaudited interim condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting and are consistent with the accounting policies and methods used in preparation of the Company's consolidated financial statements as of December 31, ~~2013~~2014. The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim condensed consolidated financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions that the Company may undertake in the future, actual results could differ from those estimates. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal and recurring adjustments) necessary for a fair statement for the periods presented have been recorded. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, ~~2014~~2015. These financial statements should be read in conjunction with, and have been prepared in conformity with, the accounting principles reflected in the Company’s financial statements and the notes thereto for the year ended December 31, ~~2013~~2014 included in the Form10-K as filed with the Securities and Exchange Commission ("SEC") on March 3113, ~~2014~~2015.

2. Recent Accounting Pronouncements

InOn ~~March~~April ~~2013~~7, 2015, the Financial Accounting Standards Board (“"FASB”") issued ~~guidance~~Accounting onStandard Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a ~~parent’s~~direct ~~accounting~~deduction ~~for~~from the ~~cumulative~~associated ~~translation~~debt ~~adjustment~~liability. ~~upon~~For ~~derecognition~~public ofbusiness aentities, ~~subsidiary~~the orstandard ~~group~~is ofeffective ~~assets~~for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within athose ~~foreign~~fiscal ~~entity~~years. ~~This~~For ~~new~~all ~~guidance~~other ~~requires~~entities, ~~that~~ the ~~parent~~standard ~~release~~is ~~any~~effective ~~related~~for ~~cumulative~~financial ~~translation~~statements ~~adjustment~~issued ~~into~~for ~~net~~fiscal ~~income~~years ~~only~~beginning ifafter ~~the~~December ~~sale~~15, or2015, ~~transfer~~and ~~results~~interim inperiods ~~the~~within ~~complete~~fiscal oryears ~~substantially~~beginning ~~complete~~after ~~liquidation~~December of15, ~~the~~2016. ~~foreign~~Early ~~entity~~adoption inis ~~which~~permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. The Company will adopt the ~~subsidiary~~guidance starting on January 1, 2016 on a retrospective basis.

6In May 2014, as part of its ongoing efforts to assist in the convergence of GAAP and International Financial Reporting Standards, the FASB issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard, as currently issued will be effective beginning January 1, 2017. On April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). The proposal will be subject to the FASB’s due process requirement, which includes a period for public comments. The new standard allows for two methods of adoption: (a) full retrospective adoption, meaning the standard is applied to all periods presented, or (b) modified retrospective adoption, meaning the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. The Company

~~or group of assets had resided. The new guidance became effective for us beginning July 1, 2014 and had no impact on our financial statements.~~ 5

Inis ~~May 2014, as part of its ongoing efforts to assist~~ in the ~~convergence~~process of ~~U.S.~~determining ~~GAAP and International Financial Reporting Standards,~~ the ~~FASB~~adoption ~~issued~~method aas ~~new~~well ~~standard~~as ~~related to revenue recognition. Under~~ the ~~new~~effects ~~standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects~~ the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning January 1, 2017 and early adoption ~~is not permitted. We are currently evaluating the impact this standard~~ will have on ~~our~~its consolidated financial statements.

3. Acquisitions

~~On April 11, 2014, certain wholly-owned subsidiaries of the Company entered into a Purchase Agreement (the "Purchase Agreement") with~~ Simpler~~. Simpler~~ provides Lean enterprise transformation consulting services. This strategic acquisition combines the Company’s market-leading cost and quality analytics in the commercial segment with Simpler’s performance management consulting capabilities to deliver performance improvement solutions to healthcare and commercial customers. Pursuant to the Purchase Agreement, the Company indirectly acquired all of the outstanding equity of Simpler in exchange for a purchase price of $81.1 million, including a working capital adjustment of $1.1 million, and the issuance of equity interests by Holdings LLC, the direct parent of the Company, of $3.7 million to Simpler. The related acquisition costs amounted to $2.7 million. The Company financed the acquisition and related costs and expenses through the $100.0 million increase in the "Tranche B Term Loans" (the "Supplemental Tranche B Term Loans") (see Note 6). The acquisition was consummated concurrently with the execution of the Purchase Agreement. The Company and its affiliates did not assume any indebtedness in connection with the Simpler Transaction. Acquisition

On April 11, 2014, we acquired Simpler (the "Simpler Transaction"). Simpler provides "Lean" enterprise transformation consulting services. This strategic acquisition combines the Company’s market-leading cost and quality analytics in the commercial segment with Simpler’s performance management consulting capabilities to deliver performance improvement solutions to healthcare and commercial customers. Pursuant to the Simpler purchase agreement, the Company indirectly acquired all of the outstanding equity of Simpler for a purchase price of $81.1 million, including a working capital adjustment of $1.1 million, and the issuance of equity interests by Holdings LLC, the direct parent of the Company, of $3.7 million to Simpler. The related acquisition costs amounted to $3.6 million. The Company financed the acquisition and related costs and expenses through an increase in the Tranche B Term Loans (the "Supplemental Tranche B Term Loans") (see Note 6). The Company and its affiliates did not assume any indebtedness in connection with the Simpler Transaction.

The following is a summary of the allocation of the purchase price of the Simpler Transaction to the estimated fair values of assets acquired and liabilities assumed in the Simpler Transaction. The allocation of the purchase price is based on management's judgment after evaluating several factors, including a valuation assessment prepared by a third party valuation firm:

	Values recognized at acquisition date
Trade and other receivables	$	7,560
Prepaid assets and other current assets	425
Computer hardware and other property	181
Other identifiable intangible assets	47,~~900~~500
Current liabilities	(2,575		)
Deferred revenue	(600		)
Net assets acquired	52,~~891~~491
Goodwill on acquisition	28,~~240~~571
Net consideration	$	81,~~131~~062

Adjustments recorded during the quarter as result of valuation and management review of certain accounts resulted in an increase of goodwill and current asset of $2.6 million and $0.2 million, respectively, and a corresponding decrease in other identifiable intangible asset of $2.5 million.

Accounts receivable, accounts payable, and liabilities were stated at historical carrying values, given their short-term nature.

The Company engaged a third party valuation firm to assist in determining the fair values of other identifiable assets and liabilities acquired, including trademarks and trade names, customer relationships, backlogs, non-compete agreements, and deferred revenue.

Computer hardware and other property have been valued at historical carrying values as management estimated that its replacement costs would not significantly differ from its carrying values.

Trademarks and trade names have been valued using the relief from royalty method under the income approach to estimate the cost savings that accrue to the Company which would otherwise have gone to pay royalties or license fees on revenues earned through the use of the asset. Using this approach, trademarks and trade names were valued at $8.0 million, with estimated useful lives of 13 years.

Customer relationships were determined using an income approach, taking into account the expected revenue growth and attrition rates of the customers and the estimated capital charges for the use of other net tangible and identifiable ~~net intangible assets. Using this approach, customer relationships were assigned a value of $21.1 million, with estimated useful lives of 3 to 9 years.~~

Backlog was determined using an income approach based on projected backlog as of acquisition date. Using this approach, backlog was assigned a value of $14.3 million, with an estimated useful life of 1 to 2 years.6

net intangible assets. Using this approach, customer relationships were assigned a value of $21.4 million, with estimated useful lives of 3 to 9 years.

Backlog was determined using an income approach based on projected backlog as of the acquisition date. Using this approach, backlog was assigned a value of $13.7 million, with an estimated useful life of 1 to 2 years.

Non-compete agreements were determined using an income approach based on projected lost revenue. Using this approach, non-compete agreements were assigned a value of $4.4 million, with estimated useful lives of 2 to 3 years.

Deferred revenue has been valued using a cost build-up approach and is calculated as the cost to fulfill the legal performance obligation plus a reasonable profit margin.

The goodwill recognized upon closing of the Simpler acquisition is attributable mainly to the skill of the acquired work force and Simpler’s position as a provider of services to key constituents of the U.S. market. The total goodwill relating to the Simpler Transaction is tax deductible.

Simpler's ~~unaudited~~ revenue and net loss for the three ~~month~~months ~~period~~ ended ~~September~~March 3031, ~~2014 and period from April 12~~2015, ~~2014 to September 30, 2014,~~ amounted to $1213.98 million and $231.5 million, respectively~~, and $0~~.~~4 million and $1.3 million, respectively. Unaudited pro forma financial information has not been presented due to immateriality.~~

4.The ~~Goodwill~~following unaudited pro forma financial data summarizes the Simpler’s results of operations for the three months ended March 31, 2014 had the acquisition of Simpler occurred as of January 1, 2013:

The changes in the carrying amount of goodwill by reportable segment during the three and nine months ended September 30, 2014, were as follows:



	Three months ended March 31, 2014
	(Unaudited)
Revenues, net	$	12,663
Net loss	1,217

	Commercial			Government			Total
Balance as of December 31, 2013 and March 31, 2014	$	733,041		$	91,298		$	824,339
Acquisition (see Note 3)	25,623			—			25,623
Balance as of June 30, 2014	758,664			91,298			849,962
Adjustment (see Note 3)	$	2,617		$	—		$	2,617
Balance as of September 30, 2014	$	761,281		$	91,298		$	852,579
Accumulated impairment:
Balance as of December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014	$	(321,064	)	$	(45,598	)	$	(366,662	)
Net book value as of December 31, 2013	$	411,977		$	45,700		$	457,677
Net book value as of March 31, 2014	$	411,977		$	45,700		$	457,677
Net book value as of June 30, 2014	$	437,600		$	45,700		$	483,300
Net book value as of September 30, 2014	$	440,217		$	45,700		$	485,917

JWA Acquisition

On October 31, 2014, we acquired JWA (the "JWA Transaction"), a company that provides "Lean" healthcare consulting services. The Company acquired all of the outstanding equity of JWA for a cash purchase price of $15.3 million, including a $1.2 million working capital adjustment and $0.1 million holdback payment. Truven also agreed to pay $1.9 million in three annual payments as compensation to a former major shareholder of JWA who became Truven's employee, as long as the former major shareholder remained with Truven for the next three years. The related acquisition costs amounted to $0.6 million. The Company and its affiliates did not assume any indebtedness in connection with the JWA Transaction. We financed the acquisition and related costs and expenses through the issuance of the Additional Notes.

The following is a summary of the allocation of the purchase price of the JWA Transaction to the estimated fair values of assets acquired and liabilities assumed in the JWA Transaction. The allocation of the purchase price is based on management's judgment after evaluating several factors, including a valuation assessment prepared by a third party valuation firm:



	Values recognized at acquisition date
Trade and other receivables	$	1,462
Prepaid assets and other current assets	41
Computer hardware and other property	17
Other identifiable intangible assets	7,489
Current liabilities	(607		)
Deferred revenue	(126		)
Net assets acquired	8,276
Goodwill on acquisition	7,020
Net consideration	$	15,296

Accounts receivable, accounts payable, liabilities and deferred revenue were stated at historical carrying values, given their short-term nature.

Computer hardware and other property have been valued at historical carrying values as management estimated that its replacement costs would not significantly differ from its carrying values.

Trademarks and trade names have been valued using the relief from royalty method under the income approach to estimate the cost savings that accrue to the Company, which would otherwise have gone to pay royalties or license fees on revenues earned through the use of the asset. Using this approach, trademarks and trade names were valued at $0.3 million, with estimated useful lives of 3 to 5 years.

Customer relationships were determined using an income approach, taking into account the expected revenue growth and attrition rates of the customers and the estimated capital charges for the use of other net tangible and identifiable net intangible assets. Using this approach, customer relationships were assigned a value of $6.1 million, with estimated useful lives of 10 to 11 years.

Backlog was determined using an income approach based on projected backlog as of the acquisition date. Using this approach, backlog was assigned a value of $1.0 million, with an estimated useful life of 1 year.

The goodwill recognized upon closing of the acquisition is attributable mainly to the skill of the acquired work force and JWA’s position as a provider of services to key constituents of the U.S. market. The total goodwill relating to the JWA Transaction is tax deductible.

JWA's revenue and net income for the three months ended March 31, 2015 amounted to $3.1 million and $0.2 million, respectively.

The following unaudited pro forma financial data summarizes JWA's results of operations for the three months ended March 31, 2014 had the acquisition of JWA occurred as of January 1, 2013:



	Three months ended March 31, 2014
	(Unaudited)
Revenues, net	$	2,831
Net Income	173

~~Goodwill~~HBE is not amortized. Instead, goodwill is tested for impairment annually as well as whenever there is an indication that the carrying amount may not be recoverable. The goodwill arising from the Simpler Transaction (see Note 3) has been allocated to the Company's commercial segment. Acquisition

On November 12, 2014, Truven consummated the acquisition of HBE, a leading provider of stakeholder information that is essential for life sciences companies to gain drug approval, reimbursement, and adoption, for a cash purchase price of $17.2 million, including negative working capital adjustment of $2.8 million (the "HBE Transaction"). The related acquisition costs amounted to $1.2 million.

The Company financed the acquisition and related costs and expenses through the issuance of the Additional Notes (see Note 6). The Company and its affiliates did not assume any indebtedness in connection with the HBE Transaction.

The following is a summary of the allocation of the purchase price of the HBE Transaction to the estimated fair values of assets acquired and liabilities assumed in the HBE Transaction. The allocation of the purchase price is based on management's judgment after evaluating several factors, including a valuation assessment prepared by a third party valuation firm:



	Values recognized at acquisition date
Trade and other receivables	$	7,670
Prepaid assets and other current assets	768
Computer hardware and other property	140
Developed technology and content	4,621
Other identifiable intangible assets	11,278
Other noncurrent assets	67
Current liabilities	(8,604		)
Deferred revenue	(4,249		)
Net assets acquired	11,691
Goodwill on acquisition	5,552
Net consideration	$	17,243

Adjustment recorded during the quarter reduced current assets by $0.3 million and increased total liabilities by $0.1 million, as a result of the final working capital adjustment.

Accounts receivable, accounts payable, and liabilities were stated at historical carrying values, given their short-term nature.

Computer hardware and other property have been valued at historical carrying values as management estimated that its replacement costs would not significantly differ from its carrying values.

Trademarks and trade names have been valued using the relief from royalty method under the income approach to estimate the cost savings that accrue to the Company which would otherwise have gone to pay royalties or license fees on revenues earned through the use of the asset. Using this approach, trademarks and trade names were valued at $2.5 million, with estimated useful lives of 12 to 14 years.

Customer relationships were determined using an income approach, taking into account the expected revenue growth and attrition rates of the customers and the estimated capital charges for the use of other net tangible and identifiable net intangible assets. Using this approach, customer relationships were assigned a value of $8.8 million, with estimated useful lives of 9 to 11 years.

Deferred revenue has been valued using a cost build-up approach and is calculated as the cost to fulfill the legal performance obligation plus a reasonable profit margin.

The goodwill recognized upon closing of the acquisition is attributable mainly to the skill of the acquired work force and HBE’s position as a provider of services to key constituents of the global life sciences market. The total goodwill relating to the HBE Transaction is tax deductible.

HBE's revenue and net loss for the three months ended March 31, 2015, amounted to $2.8 million and $1.8 million respectively.

The following unaudited pro forma financial data summarizes HBE’s results of operations for the three months ended March 31, 2014 had the acquisition of HBE occurred as of January 1, 2013:



	Three months ended March 31, 2014
	(Unaudited)
Revenues, net	$	5,444
Net income	992


4.	Goodwill

The changes in the carrying amount of goodwill by reportable segment during the three months ended March 31, 2015, were as follows:



	Commercial			Government			Total

Balance as of March 31, 2015 and December 31, 2014	$	774,184		$	91,298		$	865,482
Accumulated impairment:
Balance as of March 31, 2015 and December 31, 2014	(321,064		)	(45,598		)	(366,662		)

Net book value as of March 31, 2015 and December 31, 2014	$	453,120		$	45,700		$	498,820


5.	Other Identifiable Intangible Assets

Other identifiable intangible assets, net, consisted of the following:

	September 30, 2014
	Average life (years)	Cost		Accumulated amortization			Net
Customer relationships	13.0	$	351,000	$	(67,707	)	$	283,293
Trademarks and trade names	11.5	94,200		(13,595		)	80,605
Others	2.0	18,700		(5,527		)	13,173
		$	463,900	$	(86,829	)	$	377,071
	December 31, 2013
	Average life (years)	Cost		Accumulated amortization			Net
Customer relationships	11.5	$	329,800	$	(44,983	)	$	284,817
Trademarks and trade names	15.0	86,200		(9,003		)	77,197
		$	416,000	$	(53,986	)	$	362,014

Amortization expense for each of the next five twelve-month periods beginning October 1, 2014, is expected to be approximately $36.2 million for 2015, $39.8 million for 2016, $37.7 million for 2017, $37.4 million for 2018, and $37.2 million for 2019.



	As of March 31, 2015
	Average life (years)	Cost		Accumulated amortization			Net
Customer relationships	11.0	$	366,085	$	(83,953	)	$	282,132
Trademarks and trade names	15.0	97,024		(16,884		)	80,140
Backlog	1.0	14,732		(9,886		)	4,846
Non-Compete	3.0	4,426		(1,690		)	2,736
		$	482,267	$	(112,413	)	$	369,854

	As of December 31, 2014
	Average life (years)	Cost		Accumulated amortization			Net
Customer relationships	11.0	$	366,085	$	(75,756	)	$	290,329
Trademarks and trade names	15.0	97,024		(15,224		)	81,800
Backlog	1.0	14,732		(7,160		)	7,572
Non-Compete	3.0	4,426		(1,248		)	3,178
		$	482,267	$	(99,388	)	$	382,879

Amortization expense for each of the next five twelve-month periods beginning April 1, 2015, is expected to be approximately $46.0 million for 2016, $40.4 million for 2017, $39.4 million for 2018, $39.0 million for 2019, and $38.9 million for 2020.


6.	Long-Term Debt

The Company's long-term debt consists of the following:

	September 30, 2014			December 31, 2013
		March 31, 2015			December 31, 2014
Senior Credit Facility
Term Loan Facility (net of $14,831 and $14,156 discount, respectively)	$	611,639		$	516,831
	Term Loan Facility (net of $13,239 and $14,035 discount, respectively)	$	610,051		$	610,845
Revolving Credit Facility	15,000			30,000
10.625% Senior Notes ("the Notes") (net of $1,388 and $1,455 discount, respectively)		325,762			325,695
10.625% Senior Notes ("the Notes") (net of $1,522 and $1,723 discount, respectively)	325,628			325,427
10.625% Additional Senior Notes ("the Additional Notes") (including $1,127 and $1,182 premium, respectively)		41,127			41,182
	952,267			872,258
		976,940			977,722
Less: current portion of long-term debt	~~6,360~~	6,360		~~5,350~~	6,360
Long-term debt	$	~~945,907~~$	970,580	$	~~866,908~~$	971,362

In connection with the Prior Acquisition, on June 6, 2012, Truven entered into the Senior Credit Facility and issued the 10Old Notes.~~625%~~ ~~Senior~~On ~~Notes~~November (12, 2014, in connection with the "JWA Transaction and the HBE Transaction, Truven issued $40 million aggregate principal amount of Additional Notes"). Truven financed the Simpler Transaction and related costs and expenses through a $100.0 million increase in the Tranche B Term Loans under the Senior Credit Facility. Except as otherwise indicated by the context, the Old Notes, the Exchange Notes and the ~~Exchange~~Additional Notes are collectively and individually defined as the "Notes".

911

Senior Credit Facility

The Senior Credit Facility, as amended on April 11, 2014, is with a syndicate of banks and other financial institutions and provides financing of up to $679.7 million, consisting of the $629.7 million Term Loan Facility with a maturity of five years and the $50.0 million Revolving Credit Facility with a maturity of five years. On ~~July~~As 2of March 31, ~~2014~~2015, ~~Truven~~the ~~had~~Company ~~drawn~~has ~~$15.0~~no ~~million~~outstanding ~~from~~revolving ~~its~~loan ~~Revolving Credit Facility for working capital requirements~~ and ~~issued~~has aoutstanding ~~letter~~letters of credit inamounting ~~the~~to ~~amount of~~ $7.5 million ~~as surety on government contracts~~, which, while not drawn, reduce the available line of credit under the Revolving Credit Facility to $2742.5 million.

Borrowings under the Senior Credit Facility, other than swing line loans, bear interest at a rate per annum equal to an applicable margin plus, at Truven’s option, either (a) a base rate determined by reference to the highest of (1) the prime rate of JPMorgan Chase Bank, N.A., (2) the federal funds effective rate plus 0.50% and (3) the one month Eurodollar rate plus 1.00%; provided, that the base rate for the Term Loan Facility at any time shall not be less than 2.25%, or (b) a Eurodollar rate adjusted for statutory reserve requirements for a one, two, three or six month period (or a nine or twelve month interest period if agreed to by all applicable lenders); provided that the Eurodollar base rate used to calculate the Eurodollar rate for the Term Loan Facility at any time shall not be less than 1.25%. Swing line loans will bear interest at the interest rate applicable to base rate loans, plus an applicable margin. In addition to paying interest on outstanding principal under the Senior Credit Facility, we are required to pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate equal to 0.50% (subject to reduction upon attainment of certain leverage ratios). We will also pay customary letter of credit fees and certain other agency fees. Truven may voluntarily repay outstanding loans under the Senior Credit Facility at any time without premium or penalty, other than customary “breakage” costs with respect to adjusted LIBOR loans. Following the Third Amendment (the "Third Amendment") to the Senior Credit Agreement to increase the "Tranche B Term Loans" by $100 million as discussed below, we are required to repay $1.6 million of the Term Loan Facility quarterly, through March 31, 2019, with any remaining balance due June 6, 2019.

All obligations under the Senior Credit Facility are guaranteed by Truven Holding ~~Corp.~~ and each of Truven’'s existing and future wholly-owned domestic subsidiaries. AsDuring ~~of June 30,~~ 2014, ~~certain~~all domestic subsidiaries acquired by the Company became aguarantors ~~guarantor~~ under the Senior Credit Facility (see ~~Notes~~Note 1514). All obligations under the Senior Credit Facility and the guarantees of those obligations are collateralized by first priority security interests in substantially all of Truven’'s assets as well as those of each guarantor (subject to certain limited exceptions).

The Senior Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, Truven’s ability and the ability of each of any restricted subsidiaries to sell assets; incur additional indebtedness; prepay other indebtedness (including the Notes); pay dividends and distributions or repurchase its capital stock; create liens on assets; make investments; make certain acquisitions; engage in mergers or consolidations; engage in certain transactions with affiliates; amend certain charter documents and material agreements governing subordinated indebtedness, change the business conducted by it and its subsidiaries; and enter into agreements that restrict dividends from subsidiaries.

In addition, the Senior Credit Facility requires Truven to comply with a quarterly maximum consolidated senior secured leverage ratio in accordance with the debt covenants as long as the commitments under the Revolving Credit Facility remain outstanding (subject to certain limited exceptions). The Senior Credit Facility also contains certain customary representations and warranties, affirmative covenants and events of default. As of ~~September~~March 3031, ~~2014~~2015, the Company is in compliance with all of these credit facility covenants.

~~Refinancing~~On April 11, 2014, certain wholly-owned subsidiaries of the Company entered into the Purchase Agreement with Simpler (see Note 3). In connection with the Purchase Agreement, Truven entered into the Third Amendment to our Senior Credit Agreement. The Third Amendment provided for a $100.0 million increase in the Tranche B Term Loans, and increased the total amount available under the Senior Credit Facility to $679.7 million, consisting of a $629.7 million Term Loan Facility and a $50.0 million Revolving Credit Facility (which remained unchanged).

On April 2611, ~~2013~~2014, ~~we entered into~~ the ~~Second~~Company ~~Amendment~~borrowed to the ~~Senior~~entire ~~Credit~~$100.0 ~~Facility~~million ~~(referred to as the "April 2013 Refinancing") with a syndicate of banks and other financial institutions to (i) increase the aggregate~~ principal amount of the ~~Term~~Supplemental ~~Loan~~Tranche ~~Facility~~B ~~from~~Term ~~$523.7~~Loans ~~million~~ to ~~$535.0~~finance ~~million, (ii) reduce~~ the ~~applicable~~acquisition ~~margin~~of ~~by 1.25%~~Simpler, ~~(iii)~~repay ~~with~~outstanding ~~respect~~loans tounder ~~the~~its ~~Term~~Revolving ~~Loan~~Credit Facility, ~~determine~~and ~~the~~pay ~~applicable~~fees ~~margin~~and inexpenses ~~accordance~~relating ~~with~~to athe ~~pricing~~acquisition ~~grid based on our consolidated total leverage ratio following delivery~~ of ~~financial~~Simpler. ~~statements~~Under at the ~~end~~terms of ~~each fiscal year or quarter, as applicable, after~~ the ~~second~~Third ~~quarter of fiscal year 2013~~Amendment, ~~(iv)~~ ~~revise~~ the ~~quarterly~~Company ~~principal~~must ~~payments from $1,319.0 to~~

1012

~~$1,337.5~~repay ~~starting~~the principal amount of the Tranche B Term Loans in twenty consecutive quarterly installments beginning on June 30, ~~2013~~2014 and ~~(v)~~continuing ~~extend~~through ~~the~~March 1%31, ~~repricing~~2019 ~~call~~in ~~protection~~the ~~from~~amount ~~June~~of $1.6, ~~2013~~million toeach, ~~October~~and ~~26,~~a ~~2013.~~final ~~There~~installment ~~were~~on noJune ~~other~~6, ~~changes~~2019 in the ~~terms~~amount ~~and~~of ~~conditions~~$597. 8 million. The ~~loans~~terms ~~with~~and ~~certain~~conditions ~~lenders~~that inapply to the ~~bank~~new ~~syndicate~~Supplemental ~~had~~Tranche ~~been~~B ~~determined~~Term toLoans beare ~~extinguished~~substantially ~~under~~the ~~FASB~~same ~~ASC~~as ~~Topics~~the ~~470-50,~~terms ~~Modifications~~ and ~~Extinguishments. As~~conditions athat ~~result,~~apply to the ~~Company~~existing ~~recorded~~Tranche aB ~~loss~~Term onLoans ~~early~~under ~~extinguishment~~the onSenior ~~certain~~Credit ~~debt amounting to $3~~Agreement.3 ~~million~~In ~~during~~addition, the ~~period,~~Consolidated ~~representing~~Senior ~~unamortized~~Secured ~~debt~~Leverage ~~discount,~~Ratio ~~unamortized~~applicable ~~debt~~to ~~issue~~the ~~costs~~Company ~~and~~was ~~certain~~increased ~~costs~~for ~~related~~certain toperiods ~~the~~from ~~extinguished~~2014 ~~debt~~to 2016. During 2014, ~~The~~all ~~loss~~domestic onsubsidiaries ~~early~~acquired ~~extinguishment~~by ofthe ~~debt~~Company isbecame ~~included~~guarantors inunder ~~interest~~the ~~expense~~Senior inCredit ~~the~~Facility ~~consolidated~~(see ~~comprehensive~~Note ~~loss~~14).

In connection with the April 2013 Refinancing, the Company incurred lenders' fees of $6.7 million, representing a call premium. Of the $6.7 million, $5.8 million was recorded as part of original issue discount and presented as net of debt.

On April 11, 2014, certain wholly-owned subsidiaries of the Company entered into the Purchase Agreement with Simpler (see Note 3). In connection with the Purchase Agreement, Truven entered into the Third Amendment to our Credit Agreement. The Third Amendment provided for a $100.0 million increase in the Tranche B Term Loans, and increased the total amount available under the Credit Agreement to $679.7 million, consisting of a $629.7 million Term Loan Facility and a $50.0 million revolving credit facility (which remained unchanged).

On April 11, 2014, the Company borrowed the entire $100.0 million principal amount of the Supplemental Tranche B Term Loans to finance the acquisition of Simpler, repay outstanding loans of $15.0 million in aggregate principal amount under its Revolving Credit Facility and pay fees and expenses relating to the acquisition of Simpler. Under the terms of the Third Amendment, the Company must repay the principal amount of the Tranche B Term Loans in twenty consecutive quarterly installments beginning on June 30, 2014 and continuing through March 31, 2019 in the amount of $1,590 each, and a final installment on June 6, 2019 in the amount of $597.8 million. The terms and conditions that apply to the Supplemental Tranche B Term Loans under the Third Amendment are substantially the same as the terms and conditions that apply to the existing Tranche B Term Loans under the Credit Agreement.

The Third Amendment also amended the Credit Agreement to make certain adjustments to the Consolidated Senior Secured Leverage Ratio applicable to the Company by increasing the maximum permitted ratios for certain periods from 2014 to 2016. As of June 30, 2014, certain domestic subsidiaries acquired by the Company under the Simpler Purchase Agreement became a guarantor under the Senior Credit Facility (see Note 15).

10.625% Senior Notes due 2020

~~The~~Old Notes, which were issued under an indenture, dated June 6, 2012 ( the “Indenture”, as supplemented by the First Supplemental Indenture whereby Truven became a party to the Indenture as successor in interest to Wolverine and ~~the~~Exchange Second Supplemental Indenture referred to below, the “Second Supplemental Indenture”), with The Bank of New York Mellon Trust Company, N.A. as trustee, bear interest at a rate of 10.625% per annum, payable on June 1 and December 1 of each year (commencing on December 1, 2012), and have a maturity date of June 1, 2020. Notes

The Notes, which were issued under an indenture, dated June 6, 2012 ( the “Indenture”, as supplemented by the First Supplemental Indenture whereby Truven became a party to the Indenture as successor in interest to Wolverine and the Second Supplemental Indenture referred to below, the “Second Supplemental Indenture”), with The Bank of New York Mellon Trust Company, N.A. as trustee, bear interest at a rate of 10.625% per annum, are payable on June 1 and December 1 of each year (commencing on December 1, 2012), and have a maturity date of June 1, 2020.

The Notes are general unsecured senior obligations of Truven, fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Truven Holding Corp. and each of Truven’s existing and future wholly-owned domestic restricted subsidiaries that is a borrower under or that guarantees the obligations under the Senior Credit Facility or any other indebtedness of Truven or any other guarantor.

Truven may redeem some or all of the Notes at any time prior to June 1, 2016 at 100% of the principal amount thereof plus the applicable premium pursuant to the Indenture as of the applicable redemption date, plus accrued and unpaid interest and any additional interest to, but excluding, the applicable redemption date. Truven may redeem some or all of the Notes at any time on or after June 1, 2016 at 105.313% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after June 1, 2018, plus, in each case, accrued and unpaid interest and any additional interest to, but excluding, the applicable redemption date. In addition, at any time prior to June 1, 2015, Truven (subject to certain conditions) may redeem up to 35% of the aggregate principal amount of the Notes using net cash proceeds from certain equity offerings at 110.625% of the aggregate principal amount of the Notes plus accrued and unpaid interest and any additional interest, to, but excluding, the applicable redemption date. If Truven experiences a change of control (as defined in the Indenture), it will be required to make an offer to repurchase the Notes at a price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, and any additional interest, to, but excluding, the date of purchase.

11The Indenture contains covenants limiting Truven and its wholly-owned restricted subsidiaries with respect to other indebtedness, investments, liens, dividends, purchases or redemptions of stock, transactions with affiliates and mergers and sales of assets. The Indenture also contains covenants limiting the ability of wholly-owned restricted subsidiaries to guarantee payment of any indebtedness of Truven or any subsidiary guarantor and limiting the Company's business and operations. Following our series of acquisitions in 2014, all the domestic subsidiaries we acquired became guarantors of the Notes as a result of the guarantees of the Senior Credit Facility provided by such subsidiaries. The guarantees were entered into pursuant to the Third, Fourth and Sixth Supplemental Indentures. We were in compliance with all of these covenants as of March 31, 2015.

The Indenture contains covenants limiting Truven and its restricted subsidiaries with respect to other indebtedness, investments, liens, dividends, purchases or redemptions of stock, transactions with affiliates and mergers and sales of assets. The Indenture also contains covenants limiting the ability of wholly-owned restricted subsidiaries to guarantee payment of any indebtedness of Truven or any subsidiary guarantor and limiting the Company’s business and operations. Following the acquisition of Simpler on April 12, 2014, the wholly owned domestic subsidiaries we acquired became guarantors of the Senior Credit Facility and, as a result, were required to become guarantors of the Notes. However, the supplemental indenture to the Indenture to include these subsidiaries as guarantors was only executed on November 3, 2014. Following the execution of the third supplemental indenture on November 3, 2014, we are in compliance with all of the covenants under the Indenture.

On June 5, 2013, we entered into the Second Supplemental Indenture, whereby the guarantee release provision in Section 10.2(d)(1)(B) of the Indenture, which allows guarantors to be released from their obligations under the Indenture upon the release or discharge of such guarantor’s guarantee of the Senior Credit Facility or the guarantee which resulted in the creation of the guarantee under the Indenture (subject to certain limitations), was amended to apply only to subsidiary guarantors and not to Truven Holding.

Pursuant to a registration rights agreement dated June 6, 2012, ~~we agreed~~ (~~i) to use commercially reasonable efforts to file with~~ the ~~SEC~~"Registration anRights ~~exchange~~Agreement"), ~~offer registration statement pursuant to which~~ we ~~would~~exchanged ~~exchange~~ the Old Notes ~~issued~~ (and related guarantees) for athe ~~like aggregate principal amount of~~ Exchange Notes, which are identical in all material respects to the Old Notes, except for certain provisions, among others, relating to additional interest and transfer restrictions (and related guarantees) or (ii) under certain circumstances, to use commercially reasonable efforts to file a shelf registration statement with the SEC with respect to the Old Notes (and related guarantees), in each case by March 3, 2013. We did not file the required registration statement for the Notes by March 3, 2013, and consequently, we were required to pay additional penalty interest of 0.25% per annum for the 90 day period commencing March 4, 2013, and an additional 0.25% with respect to each subsequent 90 day period, in each case until and including the date the exchange offer was completed, up to a maximum increase of 1.00% per annum.

On June 26, 2013, the exchange offer registration statement was declared effective by the SEC. On July 31, 2013, Truven closed its offer to exchange the Old Notes for the Exchange Notes. The interest rate on the new Exchange Notes reverted to 10.625%. 13

AsAdditional ~~of September 30, 2014, principal maturities of long-term debt for the next five years and thereafter consist of:~~Notes

For the period ending September 30,
2015	$	6,360
2016	6,360
2017	21,360
2018	6,360
2019	578,317
Thereafter	327,150
	$	945,907

The Additional Notes were issued pursuant to the Indenture dated June 6, 2012 governing the Old Notes and, together with the Additional Notes (the "Notes"), as supplemented by the Fifth Supplemental Indenture, dated as of November 12, 2014 (the "Fifth Supplemental Indenture") by and among the Company, the Guarantors and the Trustee. The Additional Notes form a single series with the Old Notes and have the same terms as the Old Notes and rank equal in right of payment.

12Pursuant to the Registration Rights Agreement relating to the Additional Notes, the Company and the Guarantors agreed to use their commercially reasonable efforts to file with the SEC and cause to become effective by May 11, 2015 a registration statement relating to an offer to issue new notes having terms substantially identical to the Additional Notes in exchange for outstanding Additional Notes.

As of March 31, 2015, principal maturities of long-term debt for the next five years and thereafter consist of:



For the period ending March 31,
2016	$	6,360
2017	6,360
2018	6,360
2019	6,360
2020	584,611
Thereafter	366,889
	$	976,940


7.	Other Operating Expenses

The components of other operating expenses include the following:

	Three months ended September 30,				Nine months ended September 30,
	Three months ended March 31,
	2014		2013		2014		2013
	2015		2014
Severance and retention bonuses	$	~~1,323~~578	$	~~348~~562	$	~~2,304~~	$	~~3,147~~
Acquisition related costs and other nonrecurring charges	3,878		7,289		8,324		23,683
Acquisition-related costs and other non-recurring charges	2,779		620
Asset Write-off (see Note 12)	—6,000		—4,706		~~4,706~~		—
Sponsor fee	625		641		1,867		1,948
Sponsor fee (see Note 10)	981		641
Total other operating expenses	$	510,~~826~~338	$	86,~~278~~529	$	~~17,201~~	$	~~28,778~~

Severance expense in 2015 and 2014 primarily relates to compensation for certain positions that were eliminated as part of the change in the Company's operating segment structure toand ~~enable~~continuous usstreamlining toof ~~more~~other ~~effectively~~positions ~~focus~~within onthe ~~business~~organization ~~and market facing opportunities and~~ to ~~simplify~~improve our business decision-making process. ~~Severance~~ ~~and~~Retention ~~retention~~ bonuses ~~in 2013 primarily~~ relate to ~~the~~incentive ~~Acquisition~~compensation ofagreements ~~TRHI. On March 31, 2012, prior~~ to ~~the~~retain ~~Acquisition, the Predecessor Parent entered into a Retention Agreement with~~ key ~~TRHI~~ employees ~~in conjunction with the disposal~~ of the ~~business.~~businesses ~~The~~acquired ~~compensation expense was recorded~~ in ~~the period when the service was performed and was allocated in proportion to the days of service~~2014. For the three and nine months ended September 30, 2013, $0 and $1,400 of retention and bonus expense was recorded against Additional Paid In Capital in the Equity section of the condensed consolidated balance sheet. The compensation paid by Predecessor Parent on behalf of Truven was deemed a capital contribution.

Acquisition -related costs and non -recurring charges in ~~2014~~2015 ~~included~~mainly represent costs including professional fees ~~related~~as toa ~~the~~result ~~acquisition~~ of ~~Simpler~~integrating inthe ~~April~~acquired ~~2014~~businesses ~~(see Note 3), certain costs related~~ to ~~business~~the ~~improvement processes, and certain costs associated with data migration and losses on discontinued projects~~Company. ~~Acquisition~~ Acquisition-related costs and non -recurring charges in ~~2013~~2014 ~~include~~included legal costs ~~incurred~~ related to ~~technology~~the ~~and~~acquisition ~~other~~of ~~costs~~Simpler in ~~connection~~April ~~with~~2014 ~~the~~(see ~~Company's~~Note ~~transition~~3) ~~to a standalone business. These costs include nonrecurring expenses associated with data center migration~~ and ~~separating~~other ~~infrastructure~~professional ~~from~~fees ~~Predecessor~~incurred ~~Parent, costs~~ related to ~~the~~business ~~transitional~~improvement ~~service agreement with Thomson Reuters and related to rebranding, consulting and professional fees~~processes.

The Sponsor advisory fees are included in other expenses and represent fees paid to the Sponsor under the advisory agreement the Company entered into with the Sponsor in connection with the Acquisition (see Note 10). 14

8. Segment Information

The determination of reportable segments was based on the discrete financial information provided to the Chief Operating Decision Maker (the "CODM"). The Chief Executive Officer has the authority for resource allocation and assessment of the Company’s performance and is, therefore, the CODM. The Company’s segment structure enables us to more effectively focus on business and market facing opportunities and to simplify our business decision-making process. The operating segments have been aligned to the Commercial and Government division structures that are each headed by separate segment managers with corresponding changes in its internal management structure and information provided to the CODM. The Commercial segment includes the former Payer’Company's ~~Employer/HealthPlan~~reportable ~~and Pharma channels, the former Hospitals and Clinicians~~ segments, ~~and~~are ~~Simpler's~~as ~~Lean enterprise transformation consulting services business. The Government segment is mainly comprised of the former Payer’s Federal and State Government channels.~~ follows:

The Company's reportable segments are as follows:

Commercial

The Commercial segment provides analytic solutions and services to improve the cost, quality, and effectiveness of healthcare for commercial organizations across the healthcare industry including providers, integrated delivery networks, insurers, professional services organizations, healthcare exchanges, ~~manufacturers,~~ and ~~corporations~~employers.

Government

The Government segment provides integrated analytic solutions and services to improve the cost, quality, and effectiveness of healthcare for federal and state agencies (e.g. Centers for Medicare & Medicaid Services and state Medicaid agencies) and federally owned and operated healthcare facilities. Our sales and client services are tailored to meet the specific procurement, sales and support requirements of the government market.

The CODM ~~evaluated~~evaluates the performance of our segments based on segment operating income (loss), which is calculated internally as net sales, less cost of operations (including allocation of technology costs), selling and marketing, and general and administrative expenses, excluding depreciation and amortization.

Center/shared services consist of items that are not directly attributable to reportable segments, such as corporate administrative costs and elimination of intercompany transactions. Additionally, corporate expenses may include other non-recurring or non-operational activity that the CODM excludes in assessing operating segment performance. These expenses, along with depreciation and amortization, other operating income/expense and other non-operating activity such as interest expense/income, are not considered in the measure of the segments’ operating performance, but are shown herein as reconciling items to the Company’s consolidated loss before income taxes.

Corporate expenses may include other non-recurring or non-operational activity that the CODM excludes in assessing operating segment performance. These expenses, along with depreciation and amortization, other operating income/expense and other non-operating activity such as interest expense/income, are not considered in the measure of the segments’ operating performance, but are shown herein as reconciling items to the Company’s consolidated loss before income taxes.

The accounting policies for the reportable segments are the same as those for the consolidated Company. The Company’s operations and customers are based primarily in the United States.

Segment information for the three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 is as follows:

	Three months ended September 30,
	Three months ended March 31,
	2014						2013
	2015						2014
	Revenue			Segment operating income			Revenue		Segment operating income
Commercial	$	~~115~~118,~~095~~380		$	4135,~~967~~536		$	9796,~~903~~350	$	3429,~~328~~957
Government	25,~~092~~135			(1,~~984~~277		)	2521,~~691~~912		~~5,072~~(641		)
Segment totals	~~140~~143,~~187~~515			4334,~~951~~259			~~123~~118,~~594~~262		3929,~~400~~316
Center/Shared Services	—			(6,338		)	—		(5,385		)
Center/Shared services	(341		)	(7,731		)	—		(6,350		)
Segment Operating Income	$	140,187		$	37,613		$	123,594	$	34,015
Segment operating income	$	143,174		$	26,528		$	118,262	$	22,966
Segment operating Margin				19		%			19		%

The following table reconciles unaudited condensed segment operating income per the reportable segment information to loss before income taxes per the unaudited interim condensed consolidated statements of comprehensive loss.



	Three months ended March 31,
	2015			2014

Segment operating income	$	26,528		$	22,966
Depreciation	(5,135		)	(6,593)
Amortization of developed technology and content	(10,809		)	(9,197)
Amortization of other identifiable intangible assets	(13,025		)	(8,615)
Other operating expenses	(10,338		)	(6,529		)
Operating income	(12,779		)	(7,968		)
Net interest expense	(18,472		)	(16,273		)
Other finance costs	(469		)	(76		)
Loss before income taxes	$	(31,720	)	$	(24,317	)

	Three months ended September 30,
	2014			2013
Segment operating income	$	37,613		$	34,015
Depreciation	(4,931		)	(5,422)
Amortization of developed technology and content	(9,820		)	(8,228)
Amortization of other identifiable intangible assets	(11,960		)	(8,615)
Other operating expenses	(5,826		)	(8,278		)
Operating income	5,076			3,472
Net interest expense	(17,663		)	(16,661		)
Other finance costs	(81		)	(19		)
Loss before income taxes	$	(12,668	)	$	(13,208	)

Segment information for the nine months ended September 30, 2014 and September 30, 2013 is as follows:

	Nine months ended September 30,
	2014					2013
	Revenue		Segment operating income			Revenue		Segment operating income
Commercial	$	324,946	$	110,137		$	289,062	$	97,804
Government	69,928		1,334			74,419		8,835
Segment totals	394,874		111,471			363,481		106,639
Center/Shared Services	—		(19,413		)	—		(17,578		)
Segment Operating Income	$	394,874	$	92,058		$	363,481	$	89,061

	Nine months ended September 30,
	2014			2013
Segment operating income	$	92,058		$	89,061
Depreciation	(17,448		)	(14,411)
Amortization of developed technology and content	(28,689		)	(23,672)
Amortization of other identifiable intangible assets	(32,843		)	(25,845)
Other operating expenses	(17,201		)	(28,778		)
Operating loss	(4,123		)	(3,645		)
Net interest expense	(51,352		)	(54,753		)
Other finance costs	(417		)	(472		)
Loss before income taxes	$	(55,892	)	$	(58,870	)

Reportable segment asset information is not disclosed because it is not reviewed by the CODM for purposes of evaluating performance and allocating resources.

9. Share-based Compensation

In October 2012, the Company’s immediate parent, Holdings LLC, established a compensation award in accordance with the Operating Agreement to provide Class B Membership Interests in Holdings LLC to certain executive officers of the Company, not to exceed 6.25% in the aggregate. On April 11, 2014, Holdings LLC amended the Operating Agreement to provide Class B-1 Membership Interests in Holdings LLC to Simpler executives. Class B and B-1 membership interests ("Membership Interests") will both vest 20% on each of the first five anniversaries, subject to certain conditions. In addition, 100% of Membership Interests may vest in certain circumstances in connection with a change in control as defined in the Operating Agreement. Each Membership Interest has the right to receive a percentage of the distribution made by Holdings LLC when the distribution is actually made if such distributions exceed specified internal rates of return thresholds.

There are transfer restrictions on the Membership Interests and the executive officers would forfeit the unvested interest upon termination of employment. A summary of the Membership Interests is as follows:

	Class B					Class B-1
	Ownership interest (%)		Fair value at grant date			Ownership interest (%)	Fair value at grant date
Balance at December 31, 2013	4.6		$	6,374		—	$	—
Total outstanding balance at December 31, 2014 and March 31, 2015	4.4		$	6,100		0.9	$	1,067
Granted	—		—			0.9	1,067
Total vested as of March 31, 2015	1.7		$	2,391		—	$	—
Forfeited	(0.2	)	(274		)	—	—
Balance at September 30, 2014	4.4		$	6,100		0.9	$	1,067
Outstanding and vested as of September 30, 2014	1.8		$	2,518		—	$	—

The fair value at the date of grant was based upon the value of the Membership Interests of Holdings LLC less a marketability discount since there is no active market to trade Membership Interests. The marketability discount was determined using a geometric average rate put option model and a Black-Scholes put option model using the expected term, risk-free rate, and volatility for liquidity terms. The value was determined as of the grant date based upon a number of factors, including the amount of investment made in exchange for Membership Interests of Holdings LLC by Veritas Capital and certain members of management of the Company.

The Company recognized compensation expense, net of estimated forfeiture rate of 10% against additional paid in capital of $~~316~~311 and $~~371~~240, for the three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013, respectively, and $955 and $1,137 for the nine months ended September 30,~~ 2014 ~~and 2013~~, respectively, which is recorded in ~~General and administrative expense in the Company’s unaudited interim condensed consolidated statements of comprehensive loss.~~

The total unrecognized compensation cost related to nonvested Membership Interests expected to be recognized over the next 4.8 years is $3,934.

As of September 30, 2014, 1.8% of Membership Interests has vested with an estimated fair value of $2,146.

10. Related Party Transactions

The Company entered into an advisory agreement with the Sponsor, under which the Sponsor provided certain advisory services to the Company. As compensation for the services, the Company paid a transaction fee at the closing of the Acquisition and will continue to pay the Sponsor an annual advisory fee in an aggregate amount equal to the greater of (i) $2.5 million and (ii) 2.0% of consolidated EBITDA (as defined in the credit agreement governing our Senior Credit Facility), as well as transaction fees on future acquisitions, divestitures, financings and liquidity events, which will be determined based upon aggregate equity investments at the time of such future events or on the value of the transaction. For the three and nine months ended September 30, 2014 the Company recorded an expense for the Sponsor fee of $0.6 million and $1.9 million, respectively. For the three and nine months ended September 30, 2013, the Company recorded an expense for the Sponsor fee of $0.6 million and $1.9 million, respectively. The Sponsor advisory

~~fee~~General isand ~~presented~~administrative ~~within~~expense ~~other operating expenses~~ in the Company'’s unaudited interim condensed consolidated statements of comprehensive loss. There were no membership grants during the three months ended March 31, 2015 and 2014.

OnThe ~~April~~total ~~11,~~unrecognized ~~2014,~~compensation ascost ~~part~~related ~~of the Simpler Transaction, the Company paid a transaction fee of $1.5 million~~ to ~~the~~nonvested ~~Sponsor. As~~Membership ofInterests ~~September 30,~~expected ~~2014, advance payment~~ to ~~Sponsor~~be ~~included~~recognized inover the ~~prepaid~~next ~~and~~4.3 ~~other~~years ~~current~~is ~~assets account in the balance sheet amounted to~~ $13,308.~~7 million.~~

~~After~~As ~~the~~of ~~Acquisition on June 6~~March 31, ~~2012~~2015, the Company continued to receive certain administrative services (including facilities management, human resource management, finance and accounting operations, treasury, sourcing and procurement and IT services, among other services necessary for the conduct of the business) from Thomson Reuters under the terms of the Transitional Services Agreement1.7% ~~Such services are reflected as third-party activity in the financial statements. In the fourth quarter~~ of ~~2013,~~Class weB ~~completed~~Membership ~~our~~Interests ~~administrative infrastructure, and most of these functions~~ have ~~been~~vested ~~assumed~~with byan usestimated orfair byvalue ~~third parties on our behalf including the hosting services~~ of ~~certain technology infrastructure. The expense incurred under this service agreement for the three and nine months ended September 30, 2013 amounted to~~ $02,039.6 ~~million~~There ~~and~~were ~~$9.9~~no ~~million~~Class ~~respectively,~~B-1 ~~which~~Membership isInterest ~~included~~that invested ~~the~~as ~~other operating expenses in the unaudited interim condensed consolidated statement~~ of ~~comprehensive~~March ~~loss.~~31, 2015.

The Company also entered into a reverse transitional services agreement with TRUSI pursuant to which we provided TRUSI with office space and facilities management services at several locations in the United States10. ~~Pursuant~~Related toParty the agreement, we provided these services for certain pre-determined periods ranging from one year to approximately 22 months, with all such services to end by March 31, 2015. The Company is entitled to fees for each of the services provided for any services requested by the Stock Seller. The income recognized for services provided for the three and nine months ended September 30, 2014 totaled $0.1 million and $0.3 million, respectively. The income recognized under this service agreement for the three and nine months ended September 30, 2013 totaled $0.1 million and $0.6 million, respectively. These were recorded as a reduction to general and administrative expense in the Company's unaudited interim condensed consolidated statements of comprehensive loss. Transactions

~~During~~The Company entered into an advisory agreement with the ~~first~~Sponsor, ~~quarter~~under which the Sponsor provided certain advisory services to the Company. As compensation for the services, the Company paid a transaction fee at the closing of ~~2013~~the Prior Acquisition and will continue to pay the Sponsor an annual advisory fee in an aggregate amount equal to the greater of (i) $2.5 million or (ii) 2.0% of consolidated EBITDA (as defined in the Senior Credit Agreement), ~~Truven~~as ~~Holding~~well ~~Corp~~as transaction fees on future acquisitions, divestitures, financings and liquidity events, which will be determined based upon aggregate equity investments at the time of such future events or on the value of the transaction. For ~~received~~the three months ended March 31, 2015 and 2014, the Company recorded an expense for the Sponsor fee of $1.0 million and $0.6 million,~~950~~ respectively. The Sponsor advisory fee is presented within other operating expenses in the Company's unaudited interim condensed consolidated statements of ~~additional~~comprehensive ~~capital~~loss. As ~~contribution~~of ~~from~~March 31, ~~Holdings~~2015, ~~LLC~~the Company had sponsor fee payable of $0. 3 million included in the accounts payable and accrued expenses account in the balance sheet.

The Company has a sublease arrangement with Thomson Reuters U.S. Inc. as part of the reverse transitional services agreement entered into in connection with the Prior Acquisition. The sublease income recognized for the three months ended March 31, 2015 and 2014 totaled $0.1 million and $0.1 million, respectively. These were recorded as a reduction to general and administrative expense in the Company's unaudited interim condensed consolidated statements of comprehensive loss.

As part of the Simpler Transaction (see Note 3), the issuance by Holdings LLC of $3,730 of equity interests to Simpler has been accounted for as additional capital contribution.

On October 11, 2013, the Company received a note receivable of $0.3 million from Holdings LLC, the direct parent company of the Company. The note receivable bears interest at a rate per annum of 1.9%. Interest is payable in arrears on each October 15, commencing on October 15, 2014. In lieu of paying in cash for the interest payments, any accrued but unpaid interest shall be capitalized and added as of such interest payment date to the principal amount of the note receivable. At any time, Holdings LLC may redeem all or any part of the note receivable at a redemption price equal to 100% of the principal amount redeemed plus all interest accrued and unpaid through the redemption date. The note receivable is included in trade and other receivables account in the balance sheet as of ~~September~~March 3031, ~~2014~~2015.


11.	Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period. The Company’s intention is to permanently reinvest its foreign earnings outside of the United States. As a result, the effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates.

Income tax ~~benefit~~provision for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 had an effective tax rate of 47(0.79)%, ~~and~~which ~~38.0%,~~is ~~respectively,~~different ~~and~~from ~~income~~the ~~tax~~amount ~~benefit~~derived ~~for~~by applying the ~~three~~federal ~~and~~statutory ~~nine~~tax ~~months~~rate ~~ended~~of ~~September 30~~35%, ~~2013~~mainly ~~had~~due anto ~~effective~~the impact of certain state taxes and tax ~~rate~~credits ofpartially ~~36.8%~~offset by non-deductible expenses and ~~37.2%,~~valuation ~~respectively~~allowance of $8. ~~Income~~0 million recorded against the Company's net deferred tax ~~benefit~~asset isas ~~different~~it ~~from~~is ~~the~~not ~~amount~~more ~~derived~~likely bythan ~~applying~~not that the ~~federal~~net ~~statutory~~deferred tax ~~rate~~asset ofwill ~~35%,~~be ~~mainly~~realized. ~~due~~Income totax benefit for the ~~impact~~three ofmonths ~~certain~~ended ~~state~~March ~~income~~31, ~~taxes~~2014, ~~partially~~at ~~offset~~an byeffective ~~the~~tax ~~impact~~rate of 20.8%, is different

from the amount derived by applying the federal statutory tax rate of ~~non~~35%, mainly due to the impact of certain state income taxes partially offset by the impact of non-deductible expenses. The Company and its subsidiaries are subject to U.S. federal income tax as well as income taxes of multiple states and foreign jurisdictions.

12. Commitment and Contingencies

Security and Guarantee Agreements

The Company has entered into guarantee and security arrangements in respect of its indebtedness as described in Note 6.

Contractual Commitments

Revenue Sharing Agreement

Effective January 1, 2013, the Company modified its agreement with a supplier under which it markets and licenses to its customers a private label version of the supplier's platform solution in conjunction with the Company's health information applications. The agreement contains a revenue share arrangement based on net revenue targets. The supplier's revenue share percentage is guaranteed by the Company in the minimum amounts of $2.0 million, $4.0 million and $6.0 million, for the calendar years 2013, 2014 and 2015, respectively. The guaranteed revenue share is paid in advance by the Company on March 1st of each calendar year and is applied against the revenue share of the supplier earned through March 1st of the following calendar year. The agreement provides a grace period for the Company of up to August 31st of the following calendar year in the event that the supplier's revenue share earned does not reach the prepayment amount. After the grace period, if the revenue share earned does not meet the minimum target then the entire prepayment amount is deemed earned by the supplier. InDuring the first ~~quarter~~quarters of 2015 and 2014, the Company wrote off $6.0 million and $4.7 million of the prepaid balance, ~~had~~respectively, ~~been written off~~ as it was determined that the estimated revenue share of the supplier will not be met within the grace period. As of ~~September~~March 3031, ~~2014~~2015, there are no prepaid revenue share balances on the Company's balance sheet.

Litigation and Legal Proceedings

Truven has been named as a defendant in over 200 separate pharmaceutical tort lawsuits relating to the use of Reglan or its generic version, the first of which was filed by June 2010 and the rest of which were filed in March 2012. All of these actions are pending in the Court of Common Pleas in Philadelphia County, Pennsylvania. In these matters, the plaintiffs allege that they sustained various injuries (including neurological disorders) as a result of their ingestion of Reglan. While a host of drug manufacturers and pharmacies are named as defendants in each of the suits, claims have also been asserted against so-called “Patient Education Monograph” (“PEM”) defendants, including us. It is generally alleged in all of the actions that certain PEM defendants provided Reglan patient drug information to pharmacies which, in turn, provided that drug information to the pharmacies' customers, the plaintiffs in these actions. Plaintiffs further allege that the PEM defendants' patient drug information did not provide adequate warning information about the use of Reglan. Other PEM defendants have also been named in these and other similar actions. In general, the lawsuits have been procedurally consolidated in Philadelphia as mass tort actions. To date, none of the actions against Truven specifically identifies Truven as the author of a PEM that was supplied to a plaintiff. Instead, plaintiffs in these cases allege only that they read an unnamed PEM and, in effect, that it must have been published by at least one of the PEM defendants named in the action.

Along with other PEM defendants, Truven made one dispositive motion to dismiss all the actions. While that motion to dismiss has been denied, it was without prejudice, permitting Truven to renew at a later stage in the litigation.

Pending the resolution of appeals by the co-defendant generic drug company defendants, the resolution of which will not affect the continuation of the actions against us, there has been no active discovery involving Truven. At this time, we believe that we have meritorious defenses to the claims in each of these actions.

On December 15, 2011, Midwest Health Initiative, a client of our research business, requested arbitration of a dispute relating to our performance under a client services agreement. The arbitration proceedings were initiated in St. Louis and were settled by both parties during the fourth quarter of 2013. The settlement amount was immaterial.

Pacific Alliance Medical Center (“PAMC”) claimed in 2007 that we failed to properly submit some of PAMC’s data, resulting in denial of Medicare reimbursement to PAMC in the approximate amount of $600,000. PAMC was denied

relief by administrative agencies and appealed to the U.S. District Court in the Central District of California for judicial review, which was denied. PAMC later appealed to the United States Court of Appeals for the Ninth Circuit which affirmed the District Court's decision. The parties have entered into a tolling agreement pending the outcome of PAMC’s appeals. If a claim is filed against us, we expect to defend it.

Truven filed U.S. trademark applications for the trademarks Truven Health Analytics and Truven Health Unify. In May 2013 and March 2014, respectively, Truveris, Inc. (“Truveris”) filed notices of opposition against these applications in the Trademark Trial and Appeal Board of the United States Patent and Trademark Office alleging that the Truven Health Analytics and Truven Health Unify applications create a likelihood of confusion with Truveris’s alleged common law trademark Truveris as well as its registered trademarks Trubid, Truguard, Trubuy, Trureport and Trurxpay. Truveris has also alleged that Truven’s use of the Truven alleged mark is likely to cause confusion with Truveris’s alleged trademark. We plan to vigorously defend these claims.

The Company is involved in other litigation proceedings arising from the normal course of its operations. Related reserves are recorded when it is probable that liabilities exist and where reasonable estimates of such liabilities can be made.

While it is not possible to predict the outcome of any of these proceedings, the Company's management, in conjunction with its legal advisors, based on its assessment of the facts and circumstances now known, does not believe that any of these proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations and cash flows.

13. Fair Value Measurement

Fair value is defined under the Fair Value Measurements and Disclosures Topic of the Codification, FASB ASC 820, as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under FASB ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard established a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

• Level 2—Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.

• Level 3—Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

Under the Financial Instruments Topic of the Codification, ASC 825, entities are permitted to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value measurement option under ASC 825 for any of its financial assets or liabilities.

The Company has determined that the fair value of accounts receivable and accounts payable approximates carrying value at ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014 due to short term maturity dates.

At ~~September~~March 3031, ~~2014~~2015, the carrying amounts and fair values of the Senior Credit Facility, ~~revolver~~ and 10.625% Senior Notes were as follows:

			Fair values
	Carrying amounts		Level 1		Level 2		Level 3
Senior Term Loan	$	611,639	$	—	$	615,507	$	—
Revolver	15,000		—		15,000		—
10.625% Senior Notes	325,628		—		345,143		—

At December 31, 2013, the carrying amounts and fair values of the Senior Credit and 10.625% Senior Notes were as follows:



		Fair values
	Carrying amounts	Level 1		Level 2		Level 3
Senior Term Loan	610,051	$	—	$	625,596	$	—
10.625% Senior Notes	366,889	—		386,425		—

			Fair values
	Carrying amounts		Level 1		Level 2		Level 3
Senior Term Loan	$	516,831	$	—	$	531,625	$	—
Revolver	30,000		—		30,000		—
10.625% Senior Notes	325,427		—		369,876		—

At December 31, 2014, the carrying amounts and fair values of the Senior Credit facility and 10.625% Senior Notes were as follows:



		Fair values
	Carrying amounts	Level 1		Level 2		Level 3
Senior Term Loan	610,845	$	—	$	603,009	$	—
10.625% Senior Notes	366,877	—		357,971		—

Our level 2 inputs are determined based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves.

14. ~~Subsequent~~Supplemental ~~Events~~Guarantor Financial Information

OnTruven ~~October~~has 16issued the Notes as further described in Note 6. The Notes are fully and unconditionally guaranteed, ~~2014~~jointly and severally, ~~Truven~~on ~~had~~a ~~drawn~~senior ~~$15~~unsecured basis by Truven Holding Corp.0 ~~million~~and each of Truven’s existing and future 100% owned domestic restricted subsidiaries that is a borrower under ~~its~~or ~~Revolving~~that guarantees the obligations under the Senior Credit Facility ~~for~~or any other indebtedness of Truven or any other guarantor. All obligations under the ~~acquisition~~Senior Credit Facility are also guaranteed by Truven Holding Corp. and each of ~~Joan Wellman~~ Truven’s 100% owned domestic subsidiaries. All obligations under the Senior Credit Facility and ~~Associates~~the guarantees of those obligations are secured by first priority security interests in substantially all of Truven’s assets, ~~Inc.~~as well as those of each guarantor (~~JWA~~subject to certain limited exceptions).

OnPrior ~~October~~to ~~31,~~the ~~2014,~~series ~~Truven~~of ~~entered~~acquisitions ~~into~~in ~~a Purchase Agreement with JWA~~2014, athe ~~company~~separate ~~that~~financial ~~provides~~statements ~~Lean~~and ~~healthcare consulting services. Pursuant to~~ the ~~Purchase~~condensed ~~Agreement,~~consolidating ~~the~~and ~~Company~~combining ~~acquired~~financial ~~all~~information ofabout the ~~outstanding~~comprehensive ~~equity~~loss, offinancial ~~JWA~~position inand ~~exchange for a~~ cash ~~purchase~~flows ~~price~~ of ~~$16.0~~the ~~million~~Parent, ~~including~~the aIssuer, ~~$2.0 million holdback payment. The acquisition was consummated concurrently with~~ the ~~execution~~Guarantors, of the ~~Purchase~~non-Guarantors, ~~Agreement.~~and ~~Truven~~eliminations ~~did~~were not ~~assume~~presented ~~any~~due ~~indebtedness~~to ~~of JWA in connection with~~ the ~~transaction.~~following:

The Company has not made all of the required disclosures in accordance with ASC 805-10-50-2, Business Combinations, as it is currently in the process of evaluating the purchase accounting implications of the JWA transaction.

On November 3, 2014, we entered into third supplemental indenture to the Indenture to include wholly owned domestic subsidiaries we acquired as guarantors of the Notes.

There have been no other events subsequent to September 30, 2014, which would require any accrual or disclosure in these unaudited interim condensed consolidated financial statements.

15. Unaudited Supplemental Guarantor Financial Information

In connection with the Acquisition, Truven issued the Notes as further described in Note 6. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Truven Holding Corp. and each of Truven’s existing and future 100% owned domestic restricted subsidiaries that is a borrower under or that guarantees the obligations under the Senior Credit Facility or any other indebtedness of Truven or any other guarantor. All obligations under the Senior Credit Facility are also guaranteed by Truven Holding Corp. and each of Truven’s 100% owned domestic subsidiaries. All obligations under the Senior Credit Facility and the guarantees of those obligations are secured by first priority security interests in substantially all of Truven’s assets, as well as those of each guarantor (subject to certain limited exceptions).

Prior to the acquisition of Simpler on April 11, 2014, the separate financial statements and the condensed consolidating and combining financial information about the comprehensive income (loss), financial position and cash flows of the Parent, the Issuer, the Guarantors, and the non-Guarantors, and eliminations were not presented due to the following:


•	Truven (the Issuer) is 100% owned by Truven Holding Corp. (the parent company guarantor).


•	The guarantee by Truven Holding Corp. is full and unconditional and there were no subsidiary guarantors.


•	Truven Holding Corp. has no independent assets or operations.

21• The transaction costs related to the Prior Acquisition of $26,734 were incurred and paid for by Wolverine, which was merged with and into TRHI, with TRHI surviving the Merger upon closing of the Prior Acquisition as a 100% owned direct subsidiary of Truven Holding Corp. and subsequently changing its name to Truven Health Analytics Inc.

• The ~~transaction~~subsidiaries ~~costs~~of ~~related~~Truven toHolding ~~the~~Corp. ~~Acquisition~~other ofthan ~~$26,734~~Truven were ~~incurred~~minor ~~and~~(as ~~paid~~defined ~~for~~in bySection ~~Wolverine,~~3-10(h)(6) ~~which~~of ~~was~~Regulation ~~merged~~S-X ~~with~~of ~~and~~the ~~into~~U.S. ~~TRHI,~~Securities ~~with~~Act ~~TRHI~~of ~~surviving~~1933, as amended (the ~~Merger~~“Securities ~~upon~~Act”), ~~closing~~having oftotal ~~the~~assets, ~~Acquisition~~stockholders’ asequity, arevenues, ~~100%~~operating ~~owned~~income ~~direct~~(before ~~subsidiary~~income oftaxes) ~~Truven~~and ~~Holding~~cash ~~Corp.~~flows ~~and~~from ~~subsequently~~operating ~~changing~~activities ~~its~~of ~~name~~less tothan ~~Truven~~3% ~~Health~~of ~~Analytics~~the ~~Inc~~Company’s corresponding consolidated amounts.

•After ~~The~~the series of acquisitions, certain acquired 100% owned domestic subsidiaries became guarantors of the obligations of Truven ~~Holding~~under ~~Corp.~~the ~~other~~Senior ~~than~~Credit ~~Truven~~Facility ~~were~~and ~~minor~~the ~~(as~~Notes ~~defined~~starting in second quarter of 2014. In accordance with Section 3-10~~(h)(6)~~ of Regulation S-X of the Securities Act), ~~having~~the ~~total~~following ~~assets,~~condensed ~~stockholders’~~consolidating ~~equity,~~financial ~~revenues,~~statements ~~operating~~are ~~income~~provided ~~(before~~prospectively ~~income~~to ~~taxes)~~present ~~and~~the ~~cash~~statement ~~flows from operating activities~~ of ~~less~~comprehensive ~~than~~income 3%(loss), offinancial ~~the~~position ~~Company’s~~and ~~corresponding~~cash ~~consolidated~~flows ~~amounts.~~of:

After the acquisition of Simpler, certain acquired 100% owned subsidiaries became guarantors of the obligations of Truven under the Senior Credit Facility and the Notes. In accordance with Section 3-10 of Regulation S-X of the Securities Act, the following condensed consolidating financial statements are provided prospectively to present the statement of comprehensive income (loss), financial position and cash flows of:

(1) Truven Holding Corp., the Parent;

(2) Truven Health Analytics, Inc., the Subsidiary Issuer;

(3) Simpler North America LLC, ~~and~~ Simpler Consulting LLC, ~~the~~JWA, ~~other~~and HBE, the Guarantor subsidiaries;

(4) All ~~international~~foreign ~~Non~~non-Guarantor subsidiaries; and

(5) eliminations to arrive at the information for Truven Holding Corp. on a consolidated basis.

Separate financial statements and other disclosures concerning the Guarantors are not presented because management does not believe such information is material.

Truven Holding Corp.

Unaudited Interim Condensed Consolidated Balance Sheets

As of ~~September~~March 3031, ~~2014~~2015

	Parent			Issuer			Guarantor subsidiaries			Non-Guarantor subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—		$	1622,~~107~~494		$	53,~~157~~957		$	1,~~220~~836		$	—		$	2228,~~484~~287
Trade and other receivables, net of allowances	—			8389,~~819~~249			513,~~407~~032			1,~~012~~390			—			90103,~~238~~671
Prepaid expenses and other current assets	—			2926,~~739~~261			~~299~~1,026			~~723~~933			~~(94~~—		)	3028,~~667~~220
Intercompany receivable	—			16,788			3,147			16,099			(36,034		)	—
Deferred tax asset	—			443			—			—			—			443
Total current assets	—			146,453			14,010			19,054			(36,128		)	143,389
Intercompany receivable	—			26,815			41,716			48,758			(117,289		)	—
Investment in subsidiaries	49,180			80,716			164			—			(130,060		)	—
Total current assets	—			165,262			59,731			52,917			(117,289		)	160,621
Computer hardware and other property, net	—			34,482			103			871			—			35,456
Investment in subsidiaries	15,602			106,863			(78		)	—			(122,387		)	—
Developed technology and content, net	—			133,654			—			—			—			133,654
Computer hardware and other property, net	—			33,145			178			712			—			34,035
Goodwill	—			457,677			28,240			—			—			485,917
Developed technology and content, net	—			123,386			6,110			—			—			129,496
Other identifiable intangible assets, net	—			336,169			40,902			—			—			377,071
Goodwill	—			457,677			41,143			—			—			498,820
Other noncurrent assets	—			14,221			—			207			—			14,428
Other identifiable intangible assets, net	—			318,939			50,915			—			—			369,854
Deferred tax asset	—			5,751			683			—			(200		)	6,234
Other noncurrent assets	—			15,355			—			14			—			15,369
Total assets	$	4915,~~180~~602		$	1,~~209~~220,~~123~~627		$	84157,~~102~~999		$	2053,~~132~~643		$	(~~166~~239,~~388~~676	)	$	1,~~196~~208,~~149~~195
Liabilities and Net Equity
Accounts payable and accrued expenses	$	—		$	5958,~~354~~834		$	37,~~631~~003		$	12,~~585~~631		$	—		$	6468,~~570~~468
Deferred revenue	—			~~111~~126,~~719~~418			~~177~~8,361			71318			—			~~111~~135,~~967~~097
Current portion of long-term debt	—			6,360			—			—			—			6,360
Capital lease obligation	—			~~656~~673			—			—			—			~~656~~673
Deferred tax liability	—			~~7,483~~—			—			—			—			~~7,483~~—
Current taxes payable	—			~~332~~—			5232			—11			~~(94~~—		)	~~290~~43
Intercompany payable	—			1830,~~396~~915			~~241~~37,132			1749,~~397~~242			(36117,~~034~~289		)	—
Total current liabilities	—			~~204~~223,~~300~~200			452,~~101~~528			1952,~~053~~202			(36117,~~128~~289		)	~~191~~210,~~326~~641
Deferred revenue	—			46,~~652~~179			—127			—			—			46,~~652~~306
Capital lease obligation - noncurrent	—			1,~~544~~203			—			—			—			1,~~544~~203
Long-term debt	—			~~945~~970,~~907~~580			—			—			—			~~945~~970,~~907~~580
Deferred tax liabilities	—			—443			—			~~200~~—			~~(200~~—		)	—443
Other noncurrent liabilities	—			3,~~540~~420			—			—			—			3,~~540~~420
Total liabilities	—			1,~~159~~205,~~943~~025			452,~~101~~655			1952,~~253~~202			(36117,~~328~~289		)	1,~~146~~192,~~969~~593
Equity
Common stock	—			—			—			—			—			—
Additional paid-in capital	483,~~234~~861			483,~~234~~861			81114,~~258~~090			~~135~~(125		)	(~~564~~597,~~627~~826		)	483,~~234~~861
Accumulated deficit	(~~433~~468,~~778~~133		)	(~~433~~468,~~778~~133		)	(18,~~257~~782		)	1,~~020~~871			~~434~~475,~~015~~044			(~~433~~468,~~778~~133		)
Foreign currency translation adjustment	(~~276~~126		)	(~~276~~126		)	—36			(~~276~~305		)	~~552~~395			(~~276~~126		)
Total	4915,~~180~~602			4915,~~180~~602			80105,~~001~~344			~~879~~1,441			(~~130~~122,~~060~~387		)	4915,~~180~~602
Total liabilities and net equity	$	4915,~~180~~602		$	1,~~209~~220,~~123~~627		$	84157,~~102~~999		$	2053,~~132~~643		$	(~~166~~239,~~388~~676	)	$	1,~~196~~208,~~149~~195

Truven Holding Corp.

~~Unaudited Interim Condensed~~ Consolidated ~~Statements~~Balance ~~of Comprehensive Loss~~Sheets

~~For~~As ~~the~~of ~~Three Months Ended September~~December 3031, 2014

	Parent			Issuer			Guarantor subsidiaries			Non-Guarantor subsidiaries			Eliminations			Consolidated
Revenues, net	$	—		$	127,017		$	11,228		$	2,295		$	(353	)	$	140,187
Assets
Operating costs and expenses Cost of revenues, excluding depreciation and amortization	—			(68,555		)	(5,084		)	(1,803		)	353			(75,089		)
Cash and cash equivalents	$	—		$	8,243		$	3,264		$	1,097		$	—		$	12,604
Selling and marketing, excluding depreciation and amortization	—			(11,855		)	(326		)	(906		)	—			(13,087		)
Trade and other receivables, net of allowances	—			106,181			12,765			1,268			—			120,214
General and administrative, excluding depreciation and amortization	—			(10,770		)	(2,945		)	(683		)	—			(14,398		)
Prepaid expenses and other current assets	—			28,574			817			860			—			30,251
Depreciation	—			(4,733		)	(16		)	(182		)	—			(4,931		)
Deferred tax asset	—			621			—			—			—			621
Amortization of developed technology and content	—			(9,820		)	—			—			—			(9,820		)
Intercompany receivable	—			23,297			39,194			46,799			(109,290		)	—
Amortization of other identifiable intangible assets	—			(8,615		)	(3,345		)	—			—			(11,960		)
Total current assets	—			166,916			56,040			50,024			(109,290		)	163,690
Other operating expenses	—			(5,778		)	(48		)	—			—			(5,826		)
Investment in subsidiaries	47,123			109,851			(192		)	—			(156,782		)	—
Total operating costs and expenses	—			(120,126		)	(11,764		)	(3,574		)	353			(135,111		)
Computer hardware and other property, net	—			36,459			207			769			—			37,435
Operating loss (income)	—			6,891			(536		)	(1,279		)	—			5,076
Developed technology and content, net	—			128,917			5,161			—			—			134,078
Net interest expense	—			(17,662		)	—			(1		)	—			(17,663		)
Goodwill	—			457,677			41,143			—			—			498,820
Other finance costs	—			(116		)	—			35			—			(81		)
Other identifiable intangible assets, net	—			327,554			55,325			—			—			382,879
Equity in net income (loss) of subsidiaries	(6,620		)	(1,641		)	18			—			8,243			—
Other noncurrent assets	—			15,951			—			236			—			16,187
Income (loss) before income taxes	(6,620		)	(12,528		)	(518		)	(1,245		)	8,243			(12,668		)
Total assets	$	47,123		$	1,243,325		$	157,684		$	51,029		$	(266,072	)	$	1,233,089
Benefit from (provision for) income taxes	—			5,908			90			50			—			6,048
Liabilities and Net Equity
Net income (loss)	$	(6,620	)	$	(6,620	)	$	(428	)	$	(1,195	)	$	8,243		$	(6,620	)
Accounts payable and accrued expenses	$	—		$	58,777		$	5,931		$	2,520		$	—		$	67,228
Other comprehensive income (loss):
Deferred revenue	—			121,903			6,802			424			—			129,129
Foreign currency translation adjustments	(26		)	(26		)	(7		)	(20		)	53			(26		)
Current portion of long-term debt	—			6,360			—			—			—			6,360
Total comprehensive income (loss)	$	(6,646	)	$	(6,646	)	$	(435	)	$	(1,215	)	$	8,296		$	(6,646	)
Capital lease obligation	—			664			—			—			—			664
Deferred tax liability	—			—			—			—			—			—
Current taxes payable	—			—			—			173			—			173
Intercompany payable	—			26,086			35,784			47,420			(109,290		)	—
Total current liabilities	—			213,790			48,517			50,537			(109,290		)	203,554
Deferred revenue	—			5,456			—			—			—			5,456
Capital lease obligation - noncurrent	—			1,374			—			—			—			1,374
Long-term debt	—			971,362			—			—			—			971,362
Deferred tax liabilities	—			621			—			—			—			621
Other noncurrent liabilities	—			3,599			—			—			—			3,599
Total liabilities	—			1,196,202			48,517			50,537			(109,290		)	1,185,966
Equity
Common stock	—			—			—			—			—			—
Additional paid-in capital	483,550			483,550			114,483			(125		)	(597,908		)	483,550
Accumulated deficit	(436,123		)	(436,123		)	(5,275		)	1,130			440,268			(436,123		)
Foreign currency translation adjustment	(304		)	(304		)	(41		)	(513		)	858			(304		)
Total	47,123			47,123			109,167			492			(156,782		)	47,123
Total liabilities and net equity	$	47,123		$	1,243,325		$	157,684		$	51,029		$	(266,072	)	$	1,233,089

Truven Holding Corp.

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2014~~2015

	Parent			Issuer			Guarantor subsidiaries			Non-Guarantor subsidiaries			Eliminations			Consolidated
Revenues, net	$	—		$	~~370~~123,~~022~~304		$	2016,~~627~~663		$	105,~~649~~938		$	(62,~~424~~732	)	$	~~394~~143,~~874~~173
Operating costs and expenses Cost of revenues, excluding depreciation and amortization	—			(~~212~~74,~~325~~939		)	(9,~~234~~474		)	(51,~~963~~807		)	62,~~424~~391			(~~221~~83,~~098~~829		)
Selling and marketing, excluding depreciation and amortization	—			(3912,~~143~~720		)	(~~739~~1,472		)	(21,~~741~~742		)	—			(4215,~~623~~934		)
General and administrative, excluding depreciation and amortization	—			(3211,~~220~~372		)	(54,~~468~~255		)	(1,~~407~~255		)	—			(3916,~~095~~882		)
Depreciation	—			(175,~~052~~006		)	(2829		)	(~~368~~100		)	—			(175,~~448~~135		)
Amortization of developed technology and content	—			(2810,~~689~~563		)	—(246		)	—			—			(2810,~~689~~809		)
Amortization of other identifiable intangible assets	—			(258,~~845~~615		)	(64,~~998~~410		)	—			—			(3213,~~843~~025		)
Other operating expenses	—			(1710,~~123~~588		)	(7891		)	—			—341			(1710,~~201~~338		)
Total operating costs and expenses	—			(~~372~~133,~~397~~803		)	(2219,~~545~~977		)	(104,~~479~~904		)	62,~~424~~732			(~~398~~155,~~997~~952		)
Operating loss (income)	—			(2,375		)	(1,918		)	170			—			(4,123		)
Operating income (loss)	—			(10,499		)	(3,314		)	1,034			—			(12,779		)
Net interest income (expense)	—			(51,355		)	—			3			—			(51,352		)
Net interest expense	—			(18,469		)	1			(4		)	—			(18,472		)
Other finance costs	—			(~~348~~270		)	—(116		)	(6983		)	—			(~~417~~469		)
Equity in net income (loss) of subsidiaries	(3432,~~677~~010		)	(12,~~210~~772		)	306			—			3534,~~857~~776			—
Income (loss) before income taxes	(3432,~~677~~010		)	(5532,~~288~~010		)	(13,~~888~~423		)	~~104~~947			3534,~~857~~776			(5531,~~892~~720		)
Benefit from (provision for) income taxes	—			20,611			631			(27		)	—			21,215
Provision for income taxes	—			—			(84		)	(206		)	—			(290		)
Net income (loss)	$	(3432,~~677~~010	)	$	(3432,~~677~~010	)	$	(13,~~257~~507	)	$	77741		$	3534,~~857~~776		$	(3432,~~677~~010	)
Other comprehensive income (loss):
Foreign currency translation adjustments	~~(111~~178		)	~~(111~~178		)	—77			~~(111~~208		)	~~222~~(463		)	~~(111~~178		)
Total comprehensive income (loss)	$	(3431,~~788~~832	)	$	(3431,~~788~~832	)	$	(13,~~257~~430	)	$	~~(34~~949	)	$	3634,~~079~~313		$	(3431,~~788~~832	)

Truven Holding Corp.

Unaudited Condensed Consolidated Statements of Cash Flows

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2014~~2015

	Parent			Issuer			Guarantor subsidiaries			Non-Guarantor subsidiaries			Eliminations			Consolidated
Operating activities
Net income (loss)	$	(3432,~~677~~010	)	$	(3432,~~677~~010	)	$	(13,~~257~~507	)	$	77741		$	3534,~~857~~776		$	(3432,~~677~~010	)
Non-cash adjustments	3432,~~677~~010			6134,~~859~~809			64,~~313~~679			~~458~~100			(3534,~~857~~776		)	6736,~~450~~822
Changes in operating assets and liabilities	—			223,~~371~~101			21,~~824~~921			94(130		)	—			524,~~289~~892
Net cash provided by operating activities	—			2925,~~553~~900			73,~~880~~093			~~629~~711			—			3829,~~062~~704
Investing activities
Acquisitions, net of cash acquired	—			(77,400		)	—			—			—			(77,400		)
Acquisition - payment of working capital adjustment	—			(91		)	—			—			—			(91		)
Capital expenditures	—			(2411,~~222~~116		)	—(1,196		)	(~~190~~43		)	—			(2412,~~412~~355		)
Net cash used in investing activities	—			(~~101~~11,~~622~~207		)	—(1,196		)	(~~190~~43		)	—			(~~101~~12,~~812~~446		)
Financing activities
Proceeds from revolving credit facility	—			15,000			—			—			—			15,000
Intercompany transaction	—			1,311			(1,174		)	(137		)	—			—
Principal repayment of senior term loan	—			(41,~~517~~590		)	—			—			—			(41,~~517~~590		)
Repayment of revolving credit facility	—			(30,000		)	—			—			—			(30,000		)
Payment of capital lease obligation	—			(163		)	—			—			—			(163		)
Proceeds from senior term loan related to refinancing	—			100,000			—			—			—			100,000
Net cash used in financing activities	—			(442		)	(1,174		)	(137		)	—			(1,753		)
Intercompany transaction	—			2,513			(2,723		)	210			—			—
Effect of exchange rate changes in cash and cash equivalents	—			—			(30		)	208			—			178
Payment of debt issuance costs	—			(2,895		)	—			—			—			(2,895		)
Increase in cash and cash equivalents	—			14,251			693			739			—			15,683
Payment of capital lease obligation	—			(1,498		)	—			—			—			(1,498		)
Net cash (used in) provided by financing activities	—			78,603			(2,723		)	210			—			76,090
Effect of exchange rate changes in cash and cash equivalents	—			—			—			(111		)	—			(111		)
Increase in cash and cash equivalents	—			6,534			5,157			538			—			12,229
Cash and cash equivalents
Beginning of period	—			98,~~573~~243			—3,264			~~682~~1,097			—			1012,~~255~~604
End of period	$	—		$	1622,~~107~~494		$	53,~~157~~957		$	1,~~220~~836		$	—		$	2228,~~484~~287

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

The following discussion and analysis of our financial condition and results of operations covers the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014. You should read the following discussion and analysis in conjunction with our unaudited interim condensed consolidated financial statements as of ~~September~~March 3031, ~~2014~~2015, and the related notes thereto included elsewhere in this quarterly report. The unaudited interim condensed consolidated financial statements for the period ended ~~September~~March 3031, ~~2014~~2015 represent the consolidated financial statements of Truven Holding and its subsidiaries.

Note to Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain “forward-looking statements” (as defined in Section 27A of the ~~U.S.~~ Securities Act ~~of 1933~~, ~~as amended (the “Securities Act”),~~ and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that reflect our expectations regarding our future growth, results of operations, performance and business prospects and opportunities. Words such as “anticipates,” “believes,” “plans,” “expects,” “intends,” “estimates,” “projects,” “targets,” “can,” “could,” “may,” “should,” “will,” “would,” and similar expressions have been used to identify these forward-looking statements, but are not the exclusive means of identifying these statements. For purposes of this Quarterly Report on Form 10-Q, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements reflect our current beliefs and expectations and are based on information currently available to us. As such, no assurance can be given that our future growth, results of operations, performance and business prospects and opportunities covered by such forward-looking statements will be achieved. We have no intention or obligation to update or revise these forward-looking statements to reflect new events, information or circumstances.

In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, "Item 1A. Risk Factors" and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014, and those described from time to time in our future reports filed with the SEC.

Overview

We are a leading ~~provider of healthcare data and~~ analytics solutions and services tocompany ~~key~~focused ~~constituents~~on inimproving ~~the~~quality ~~U.S. healthcare~~and ~~system,~~decreasing ~~including~~costs ~~federal~~across ~~government~~the ~~agencies,~~healthcare ~~state~~industry. We ~~government~~provide ~~agencies,~~analytic ~~employers~~solutions and ~~health~~service ~~plans,~~offerings ~~hospitals,~~across ~~clinicians~~the ~~and~~full ~~pharmaceutical~~spectrum ~~companies.~~of ~~Our~~healthcare ~~solutions~~constituents ~~and~~including ~~services~~state ~~empower~~and ~~our~~federal ~~customers~~government toagencies, ~~make~~hospitals, ~~decisions~~health tosystems, ~~improve~~employers, ~~the~~health ~~cost~~plans, ~~performance~~life ~~and~~sciences ~~quality~~companies ~~of healthcare through data~~ and ~~data analytics~~consumers.

The Acquisition

On April 23, 2012, VCPH Holding Corp. (now known as Truven Holding Corp.), an affiliate of Veritas Capital, entered into the Stock and Asset Purchase Agreement with TRUSI and TRGR, both affiliates of the Thomson Reuters Corporation, which Truven Holding Corp. assigned to Wolverine on May 24, 2012. Pursuant to the Stock and Asset Purchase Agreement, on June 6, 2012, Wolverine acquired 100% of the equity interests of TRHI and certain other assets and liabilities of the Thomson Reuters Healthcare business. Upon the closing of the Acquisition, Wolverine merged with and into TRHI, with TRHI surviving the Merger as a direct wholly-owned subsidiary of Truven Holding Corp., and subsequently changed its name to Truven Health Analytics Inc. Following the Merger, the assets and liabilities acquired are held by Truven, which remains a direct wholly-owned subsidiary of Truven Holding Corp. Truven Holding Corp. was formed on April 20, 2012 for the purpose of consummating the Acquisition. We financed the Acquisition and paid related costs and expenses associated with the Acquisition and the financing as follows: (i) approximately $464.4 million in common equity was contributed by entities affiliated with the Sponsor and certain co-investors; (ii) $527.6 million principal amount was borrowed under the Term Loan Facility; and (iii) $327.1 million principal amount of Notes were issued.

In connection with the offering of the Notes and the Acquisition, Truven Holding Corp. and Wolverine entered into the Senior Credit Facility, which consisted of (i) the $527.6 million Term Loan Facility and (ii) the $50.0 million Revolving

Credit Facility. In connection with the Merger, Truven succeeded to the obligations of Wolverine under (i) the credit agreement that governs our Senior Credit Facility and (ii) the indenture that governs the Notes.

Our segments

The operating segments have been aligned to the Commercial and Government division structures that are each headed by separate segment managers with corresponding changes in its internal management structure and information provided to the CODM. The Commercial segment includes the former Payer’s Employer/HealthPlan and Pharma channels, the former Hospitals and Clinicians segments, and Simpler's Lean enterprise transformation consulting services business. The Government segment is mainly comprised of the former Payer’s Federal and State Government channels. The change in the structure of the Company's internal organization causes the composition of our reportable segments to be adjusted retrospectively.

The Company's operating segments, which primarily operate in the United States, are as follows:

Commercial

Government

The Government segment provides integrated analytic solutions and services to improve the cost, quality, and effectiveness of healthcare for federal and state ~~agencies~~government channels (e.g. Centers for Medicare & Medicaid Services and state Medicaid agencies) and federally owned and operated healthcare facilities. Our sales and client services are tailored to meet the specific procurement, sales and support requirements of the government market.

The CODM evaluated the performance of our segments based on segment operating income (loss), which is calculated internally as net sales, less cost of operations (including allocation of technology costs), selling and marketing, and general and administrative expenses, excluding depreciation and amortization. 27

Center/shared services consist of items that are not directly attributable to reportable segments, such as corporate administrative costs and elimination of intercompany transactions. ~~Additionally,~~ corporate expenses may include other non-recurring or non-operational activity that the CODM excludes in assessing operating segment performance. These expenses, along with depreciation and amortization, other operating income/expense and other non-operating activity such as interest expense/income, are not considered in the measure of the segments’ operating performance, but are shown herein as reconciling items to the Company’s consolidated loss before income taxes.

~~The~~Corporate ~~accounting~~expenses ~~policies~~may ~~for~~include other non-recurring or non-operational activity that the ~~reportable~~CODM ~~segments~~excludes in assessing operating segment performance. These expenses, along with depreciation and amortization, other operating income/expense and other non-operating activity such as interest expense/income, are not considered in the ~~same~~measure of the segments’ operating performance, but are shown herein as ~~those~~reconciling ~~for~~items to the Company’s consolidated ~~Company~~loss before income taxes.

~~Acquisition~~The ofaccounting ~~Simpler~~policies for the reportable segments are the same as those for the consolidated Company. The Company’s operations and customers are based primarily in the United States.

~~On April 11,~~ 2014, certain wholly-owned subsidiaries of the Company entered into a Purchase Agreement with Simpler. Pursuant to the Purchase Agreement, the Company indirectly acquired all of the outstanding equity of Simpler in exchange for a purchase price of $81.1 million, including a working capital adjustment of $1.1 million, and the issuance of equity interests by Holdings LLC, the direct parent of the Company, of $3.7 million to Simpler. The related acquisition costs amounted to $2.7 million. The Company financed the acquisition and related costs and expenses through the $100.0 million increase in the Tranche B Term Loans. The acquisition was consummated concurrently with the execution Acquisitions

28Simpler Acquisition

On April 11, 2014, we acquired Simpler. Simpler provides "Lean" enterprise transformation consulting services. This strategic acquisition combines the Company's market-leading cost and quality analytics in the commercial segment with Simpler's performance management consulting capabilities to deliver performance improvement solutions to healthcare and commercial customers. We acquired all of the ~~Purchase~~outstanding ~~Agreement~~equity of Simpler for a purchase price of $81.1 ~~The~~million, including a working capital adjustment of $1.1 million, and the issuance of equity interests by Holdings LLC, the direct parent of the Company, of $3.7 million to Simpler. The related acquisition costs amounted to $3.6 million. We financed the acquisition and ~~its~~related ~~affiliates~~costs and expenses through an increase in the Tranche B Term Loans under the Senior Credit Facility. We did not assume any indebtedness ~~of Simpler~~ in connection with the Simpler Transaction.

InJWA accordance with the acquisition method of accounting, following the date of the acquisition, we, with the assistance of a third-party valuation firm, have estimated the fair values of acquired assets and assumed liabilities based on the actual tangible and identifiable intangible assets and liabilities that existed at the date of the acquisition. These fair values are preliminary and were reflected on our balance sheet on the date of the acquisition. In this process, we applied certain assumptions as inputs to the valuation calculations. These assumptions represent our best estimates based on historic performance of the respective reporting segments, trends within the market place and our consideration of the potential impact of political, economic and social factors that are considered beyond our control. Significant assumptions included within our discounted cash flow valuation include revenue growth rates, operating profit margins, implied rate of return used and terminal growth rates. Our results of operations, financial position and cash flows are impacted by the effects of the acquisition, which were financed primarily through borrowings, including transaction-related costs, debt commitment fees and recurring interest costs.Acquisition

On October 31, 2014,we acquired JWA, a company that provides "Lean" healthcare consulting services. We acquired all of the outstanding equity of JWA for a cash purchase price of $15.3 million, including a $1.2 million working capital adjustment and $0.1 million holdback payment. Truven also agreed to pay $1.9 million in three annual payments to a former major shareholder of JWA who became Truven's employee, as long as the former major shareholder remained with Truven for the next three years. The related acquisition costs amounted to $0.6 million. We did not assume any indebtedness in connection with the JWA Transaction. We financed the acquisition and related costs and expenses through the issuance of the Additional Notes.

HBE Acquisition

On November 12, 2014, we acquired HBE, a leading provider of stakeholder information that is essential for life sciences companies to gain drug approval, reimbursement, and adoption, for a cash purchase price of $17.2 million, including negative working capital adjustment of $2.8 million. The related acquisition costs amounted to $1.2 million. We financed the acquisition and related costs and expenses through the issuance of the Additional Notes. We did not assume any indebtedness in connection with the HBE Transaction.

In accordance with the acquisition method of accounting, following the date of each of the foregoing acquisitions, we, with the assistance of a third‑party valuation firm, have estimated the fair values of acquired assets and assumed liabilities based on the actual tangible and identifiable intangible assets and liabilities that existed at the date of the acquisitions. These fair values are preliminary and were reflected on our balance sheet on the date of the acquisitions. In this process, we applied certain assumptions as inputs to the valuation calculations. These assumptions represent our best estimates based on historic performance of the respective reporting segments, trends within the market place and our consideration of the potential impact of political, economic and social factors that are considered beyond our control. Significant assumptions included within our discounted cash flow valuation include revenue growth rates, operating profit margins, implied rate of return used and terminal growth rates. Our results of operations, financial position and cash flows are impacted by the effects of the acquisitions, which were financed primarily through borrowings, including transaction‑related costs, debt commitment fees and recurring interest costs.

Deferred Revenue: Fair Value Adjustments

Our revenues are derived from the sale of subscription data, and analytics solutions and services. Our revenues from the sale of subscription data and analytics solutions are typically billed annually in advance and recognized on a straight-line basis over the contract term, which is typically one to three years. As a result, cash collections from customers for subscription data and analytic solutions can be greater than the revenue recognized (which only correspond to those revenues associated with services already rendered). In cases of billings in advance or advanced receipt of payments from customers, we record deferred revenue, a liability that is reduced as revenue is recognized. Our revenues from services are invoiced according to the terms of the contract, typically in arrears (after the corresponding services have been rendered), and recognized over the term of the contract. Contracts for services vary in length from a few months to several years. The carrying value of our deferred revenue as of June 6, 2012 totaled $138.7 million. Following the completion of the Acquisition, we determined, with the assistance of a third-party valuation firm, that the fair value of our deferred revenue should be adjusted to $80.2 million. As a result, deferred revenue on certain contracts of $58.5 million was written off, which negatively impacted our revenue in the three and nine months ended September 30, 2014 and September 30, 2013 by $0.7 million, $2.1 million, $1.0 million and $7.9 million respectively. The write-off will have a future aggregate negative impact of $4.5 million in future periods with the majority expected to be reflected over the next 15 months.

straight‑line basis over the contract term, which is typically one to three years. As a result, cash collections from customers for subscription data and analytic solutions can be greater than the revenue recognized (which only correspond to those revenues associated with services already rendered). In cases of billings in advance or advanced receipt of payments from customers, we record deferred revenue, a liability that is reduced as revenue is recognized. Our revenues from services are invoiced according to the terms of the contract, typically in arrears (after the corresponding services have been rendered), and recognized over the term of the contract. Contracts for services vary in length from a few months to several years. During the acquisition of the healthcare business of Thomson Reuters on June 6, 2012 (referred to as the "Prior Acquisition"), the carrying value of our deferred revenue totaled $138.7 million. With the assistance of a third‑party valuation firm, we determined that the fair value of our deferred revenue should be adjusted to $80.2 million. As a result, deferred revenue on certain contracts of $58.5 million was written off. Following the acquisitions of Simpler, HBE and JWA during 2014, the carrying values of deferred revenues from acquired companies totaled $11.7 million, and with the assistance of a third-party valuation firm, it was determined that the fair value of the deferred revenue should be adjusted to $4.8 million. As a result, deferred revenue on certain contracts of $6.9 million was written off. These write-offs on deferred revenue negatively impacted our revenue subsequent to the acquisitions.

During the three months periods ended March 31, 2015 and 2014, our revenue was negatively impacted by $2.1 million and $0.7 million, respectively. The write‑offs will have a future aggregate negative impact to revenue of $5.1 million in future periods with the majority expected to be reflected over the next 12 months.

Results of Operations

The following section provides a comparative discussion of our ~~Results~~results of ~~Operations~~operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, and should be read in conjunction with our unaudited condensed consolidated financial statements for these periods and the related notes thereto, included elsewhere in this quarterly report. Factors that relate primarily to a specific business segment are discussed in more detail within that business segment. For a discussion of critical accounting policies affecting our financial condition and results of operation, see the “Critical Accounting Policies” section herein.

The following table summarizes our unaudited interim condensed consolidated results of operations for the three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014:

(Dollars in thousands)	Three months ended ~~September~~March 3031, ~~2014~~2015			% of revenue		Three months ended ~~September~~March 3031, ~~2013~~2014			% of revenue		Change			% change
Revenues, net	$	140,187		100	%	$	123,594		100	%	$	16,593		13	%
Revenues, net(a)	$	143,173		100	%	$	118,262		100	%	$	24,911		21	%
Operating costs and expenses
Cost of revenues, excluding depreciation and amortization(a)	(75,089		)	(54	)%	(64,293		)	(52	)%	(10,796		)	17	%
Cost of revenues, excluding depreciation and amortization(b)	(83,829		)	(59	)%	(70,287		)	(59	)%	(13,542		)	19	%
Selling and marketing, excluding depreciation and amortization(b)	(13,087		)	(9	)%	(12,899		)	(10	)%	(188		)	1	%
Selling and marketing, excluding depreciation and amortization(c)	(15,934		)	(11	)%	(13,724		)	(12	)%	(2,210		)	16	%
General and administrative, excluding depreciation and amortization(c)	(14,398		)	(10	)%	(12,387		)	(10	)%	(2,011		)	16	%
General and administrative, excluding depreciation and amortization(d)	(16,882		)	(12	)%	(11,285		)	(10	)%	(5,597		)	50	%
Depreciation	(4,931		)	(4	)%	(5,422		)	(4	)%	491			(9	)%
Depreciation(e)	(5,135		)	(4	)%	(6,593		)	(6	)%	1,458			(22	)%
Amortization of developed technology and content	(9,820		)	(7	)%	(8,228		)	(7	)%	(1,592		)	19	%
Amortization of developed technology and content(f)	(10,809		)	(8	)%	(9,197		)	(8	)%	(1,612		)	18	%
Amortization of other identifiable intangible assets(d)	(11,960		)	(9	)%	(8,615		)	(7	)%	(3,345		)	39	%
Amortization of other identifiable intangible assets(g)	(13,025		)	(9	)%	(8,615		)	(7	)%	(4,410		)	51	%
Other operating expenses(e)	(5,826		)	(4	)%	(8,278		)	(7	)%	2,452			(30	)%
Other operating expenses(h)	(10,338		)	(7	)%	(6,529		)	(6	)%	(3,809		)	58	%
Total operating costs and expenses	(~~135~~155,~~111~~952		)	(96109	)%	(~~120~~126,~~122~~230		)	(97107	)%	(1429,~~989~~722		)	1224	%
Operating income	5,076			4	%	3,472			3	%	1,604			46	%
Operating loss	(12,779		)	(9	)%	(7,968		)	(7	)%	(4,811		)	60	%
Net interest expense (f)	(17,663		)	(13	)%	(16,661		)	(13	)%	(1,002		)	6	%
Net interest expense (i)	(18,472		)	(13	)%	(16,273		)	(14	)%	(2,199		)	14	%
Other finance costs	(81469		)	—	%	(1976		)	—	%	(62393		)	~~326~~517	%
Loss before income taxes	(1231,~~668~~720		)	(922	)%	(1324,~~208~~317		)	(1121	)%	~~540~~(7,403		)	(430	)%
Benefit from income taxes	6,048			4	%	4,865			4	%	1,183			24	%
Benefit from (provision for) income taxes	(290		)	—	%	5,060			4	%	(5,350		)	(106	)%
Net loss	$	(632,~~620~~010	)	(522	)%	$	(819,~~343~~257	)	(716	)%	$	1(12,~~723~~753	)	~~(21~~66	)%

(a) Includes ~~all~~(i) ~~personnel~~subscription revenues from sales of products and ~~other~~services ~~costs~~that ~~attributable~~are todelivered under a ~~revenue~~contract ~~stream~~over a period of time, ~~including~~which ~~but~~are ~~not~~recognized ~~limited~~on ~~to,~~a ~~client~~straight ~~support,~~line ~~client~~basis ~~operations~~over the term of the subscription, ~~product~~(ii) ~~management~~revenues from implementation and hosting arrangement that included: (1) the design, ~~royalties~~production, ~~allocation~~testing and installation of ~~technology~~the customer's database (implementation phase); and (2) the provision of ongoing data management and support ~~costs~~services ~~relating~~in toconjunction ~~market~~with the licensed data and ~~professional~~subscription of software data or application (on-going service ~~costs~~phase, hosting or subscription).

(b) Includes all personnel and other costs ~~related~~attributable to ~~sales~~a ~~and~~revenue ~~marketing~~stream, including but not limited to, ~~sales~~client ~~and~~support, ~~marketing~~client ~~staff~~operations, ~~commissions~~product management, royalties, allocation of technology support costs relating to market data and ~~marketing~~professional ~~events~~service costs.

(c) Includes all personnel and other costs related to ~~general~~sales ~~administration~~and ~~as well as costs shared across the organization~~marketing, including but not limited to, ~~technology~~sales and marketing staff, ~~finance~~commissions and ~~strategy~~marketing events.

(d) Includes ~~amortization~~all ofpersonnel ~~definite‑lived~~and ~~trade~~other ~~names~~costs ~~and~~related ~~acquired~~to ~~customer~~general ~~relationship~~administration ~~assets~~as well as costs shared across the organization, including but not limited to technology, finance and strategy.

(e) Includes Indepreciation ~~2014, other operating expenses included legal costs related to the acquisition~~ of ~~Simpler~~computer ~~in April 2014~~hardware, ~~other professional fees incurred related to business process improvement and documentation~~furniture, ~~costs~~fixture ~~associated with data migration~~ and ~~losses on discontinued projects~~equipments, ~~severance costs for certain positions that were eliminated as part of the change in the Company's operating segment structure, asset write-offs,~~ and ~~the~~leasehold ~~Sponsor fee for Veritas Capital~~improvements. In 2013, other operating expenses represent costs incurred to transition the Company to a standalone business. These costs include nonrecurring expenses associated with data center migration, separating the infrastructure from Predecessor Parent, and the related consulting and professional fees. These costs also include severance and retention bonuses relating to the Acquisition and the Sponsor fee for Veritas Capital. See Note 7 to the condensed consolidated financial statements included elsewhere in this quarterly report.

(f) Includes ~~Interest~~amortization ~~earned~~of ordeveloped ~~paid~~technology and contents used internally and capitalized once a project has progressed beyond a conceptual, ~~net~~preliminary stage to that of ~~interest~~application ~~income~~development stage. Costs that qualify for capitalization include both internal and external costs, but are limited to those that are directly related to ~~third~~a ~~party~~specific ~~transactions~~project.

~~Discussion~~(g) Includes amortization of ~~three~~definite‑lived ~~months~~trademarks ~~ended~~and ~~September 30~~trade names, ~~2014~~backlogs, non-compete agreements and ~~2013~~acquired customer relationship assets.

~~Revenues~~(h) In 2015, ~~net~~other operating expenses included severance expense for certain positions that were eliminated as part of the change in the Company's operating segment structure and continuous streamlining of other positions within the organization to improve our business decision-making process, asset write-offs, acquisition-related costs and non-recurring charges as a result of integrating the acquired businesses to the Company, and a Sponsor fee for Veritas Capital. In 2014, other operating expenses included legal costs related to the acquisition of Simpler in April 2014, asset write-offs and other professional fees incurred related to business improvement processes. See Note 7 to the condensed consolidated financial statements included elsewhere in this quarterly report.

~~Our~~(i) ~~net~~Interest ~~revenues~~earned ~~were~~or ~~$140.2 million for the three months ended September 30~~paid, ~~2014~~net ~~as compared to $123.6 million for the three months ended September 30, 2013, an increase~~ of ~~$16.6~~interest ~~million~~income orrelated ~~13%. This increase was primarily due~~ to ~~the~~third ~~$17.2~~party ~~million increase in revenue from our Commercial segment mainly due to the acquisition of Simpler, a Lean~~ transactions.

~~enterprise~~Discussion ~~transformation~~of ~~consulting~~three ~~services~~months ~~business~~ended ~~has been integrated in our Commercial segment~~March 31, ~~which~~2015 ~~contributed $12.9 million of revenue during the quarter. These were offset by a $0.6 million decrease in revenue from our Government segment due to lower revenue~~ and ~~implementation services due to timing of government projects. For a detailed explanation of the variations in revenue for each of our segments, see the individual segment discussions below.~~ 2014

Cost of revenues, excluding depreciation and amortization

Our cost of revenues, excluding depreciation and amortization, was $75.1 million for the three months ended September 30, 2014 as compared to $64.3 million for the three months ended September 30, 2013, an increase of $10.8 million, or 17%. This increase was primarily due to $6.5 million of incremental costs of revenues from Simpler's operations. In addition, salaries and wages increased due to the growth in head count and higher project costs for federal and state agencies.

Selling and marketing expense, excluding depreciation and amortization

Our selling and marketing expense, excluding depreciation and amortization, was $13.1 million for the three months ended September 30, 2014 as compared to $12.9 million for the three months ended September 30, 2013, an increase of $0.2 million or 1%, which is mainly due to selling and marketing expenses attributable to Simpler's operations.

General and administrative expense, excluding depreciation and amortization

Our general and administrative expense, excluding depreciation and amortization, was $14.4 million for the three months ended September 30, 2014 as compared to $12.4 million for the three months ended September 30, 2013, an increase of $2.0 million, or 16%. The increase was primarily due to $3.1 million of additional general and administration expenses attributable to Simpler's operations, partially offset by lower costs due to certain cost cutting measures.

Depreciation and amortization

Our depreciation and amortization expense was $26.7 million for the three months ended September 30, 2014 as compared to $22.3 million for the three months ended September 30, 2013, an increase of $4.4 million or 20%. This increase was primarily due to the overall impact of developed technology and content related to the new data center and new information system infrastructure that were placed in service in late 2013 and the additional amortization of intangible assets from the acquisition of Simpler. Incremental depreciation and amortization from the acquisition of Simpler amounted to $3.4 million.

Other operating expenses

Our other operating expense was $5.8 million for the three months ended September 30, 2014 as compared to $8.3 million for the three months ended September 30, 2013, a decrease of $2.5 million or 30%. The decrease was mainly due to the $3.4 million decrease in acquisition related and nonrecurring expenses, due to the completion of separating our IT infrastructure from Predecessor Parent initiated in 2013, partially offset by a $1.0 million increase in severance expenses for positions that were eliminated as part of the change in our operating segment structure.

Operating income

Our operating income was $5.1 million for the three months ended September 30, 2014 as compared to an operating income of $3.5 million for the three months ended September 30, 2013, an increase in operating income of $1.6 million, or 46%, from 2013. The increase in operating income was primarily due to a $16.6 million increase in revenue while total operating expenses increased by $15.0 million, as discussed above.

Net interest expense

Our net interest expense was $17.7 million for the three months ended September 30, 2014, as compared to $16.7 million for the three months ended September 30, 2013, an increase of $1.0 million, or 6%. The increase was primarily due to a $100 million increase in the term loan related to the acquisition of Simpler.

Benefit from income taxes

Our income tax benefit was $6.0 million for the three months ended September 30, 2014 as compared to a benefit of $4.9 million for the three months ended September 30, 2013, an increase of $1.2 million or 24%. Income tax benefit for the three months ended September 30, 2014 and three months ended September 30, 2013, at an effective tax rate of 47.7% and 36.8%, respectively, are different from the amount derived by applying the federal statutory tax rate of 35%, mainly due to the impact of certain state income taxes, partially offset by non deductible expenses.

Segment Discussion

The following table summarizes our unaudited interim condensed consolidated segment information and discussion of the results of our operations for the three months ended September 30, 2014 and September 30, 2013, under the new reportable segment structure:

(Dollars in thousands)	Three months ended September 30, 2014		% of revenue		Three months ended September 30, 2013		% of revenue		Change			% change
Commercial
Revenues	$	115,095	100	%	$	97,903	100	%	$	17,192		18	%
Segment operating income	41,967		36	%	34,328		35	%	7,639			22	%
Government
Revenues	25,092		100	%	25,691		100	%	(599		)	(2	)%
Segment operating income	1,984		8	%	5,072		20	%	(3,088		)	(61	)%

Commercial segment

Revenues

Our Commercial revenue was $115.1 million for the three months ended September 30, 2014 as compared to $97.9 million for the three months ended September 30, 2013, an increase of $17.2 million or18%. The increase was primarily due to the $12.9 million of revenue from Simpler's operations. Additionally, revenue increased by $4.3 million due to new sales and incremental fees from subscriptions primarily from MarketScan solutions.

Operating income

Our Commercial operating income was $42.0 million for the three months ended September 30, 2014 as compared to $34.3 million for the three months ended September 30, 2013, an increase of $7.6 million or 22% . This was primarily due to the $2.9 million of incremental operating income from Simpler's operations, as well as increase in revenue, offset by higher maintenance costs of developed technology and content, telecommunications costs and other revenue related costs upon completion of our transition to a standalone company, as well as the increase in administrative costs to maintain our international branches established in mid-2013.

Government segment

Revenues

Our Government revenue was $25.1 million for the three months ended September 30, 2014 as compared to $25.7 million for the three months ended September 30, 2013, a decrease of $0.6 million or 2%. This was primarily due to

lower implementation revenue on enterprise data warehouse projects and migration and timing of other government projects.

Operating income

Our Government operating income was $2.0 million for the three months ended September 30, 2014 as compared to $5.1 million for the three months ended September 30, 2013. The decrease mostly relates to the decline in revenue as discussed above, and higher costs mainly due to the Company's initiatives to improve sales in the federal and state agencies, such as Centers for Medicare & Medicaid Services, state Medicaid agencies, as well as federally owned and operated healthcare facilities.

The following table summarizes our unaudited interim condensed consolidated results of operations for the nine months ended September 30, 2014 and September 30, 2013:

(Dollars in thousands)	Nine months ended September 30, 2014			% of revenue		Nine months ended September 30, 2013			% of revenue		Change			% change
Revenues, net	$	394,874		100	%	$	363,481		100	%	$	31,393		9	%
Operating costs and expenses
Cost of revenues, excluding depreciation and amortization(a)	(221,098		)	(56	)%	(200,983		)	(55	)%	(20,115		)	10	%
Selling and marketing, excluding depreciation and amortization(b)	(42,623		)	(11	)%	(42,111		)	(12	)%	(512		)	1	%
General and administrative, excluding depreciation and amortization(c)	(39,095		)	(10	)%	(31,326		)	(9	)%	(7,769		)	25	%
Depreciation	(17,448		)	(4	)%	(14,411		)	(4	)%	(3,037		)	21	%
Amortization of developed technology and content	(28,689		)	(7	)%	(23,672		)	(7	)%	(5,017		)	21	%
Amortization of other identifiable intangible assets(d)	(32,843		)	(8	)%	(25,845		)	(7	)%	(6,998		)	27	%
Other operating expenses(e)	(17,201		)	(4	)%	(28,778		)	(8	)%	11,577			(40	)%
Total operating costs and expenses	(398,997		)	(101	)%	(367,126		)	(101	)%	(31,871		)	9	%
Operating loss	(4,123		)	(1	)%	(3,645		)	(1	)%	(478		)	13	%
Net interest expense (f)	(51,352		)	(13	)%	(54,753		)	(15	)%	3,401			(6	)%
Other finance costs	(417		)	—	%	(472		)	—	%	55			(12	)%
Loss before income taxes	(55,892		)	(14	)%	(58,870		)	(16	)%	2,978			(5	)%
Benefit from income taxes	21,215			5	%	21,902			6	%	(687		)	(3	)%
Net loss	$	(34,677	)	(9	)%	$	(36,968	)	(10	)%	$	2,291		(6	)%

(a) Includes all personnel and other costs attributable to a revenue stream, including but not limited to, client support, client operations, product management, royalties, allocation of technology support costs relating to market data and professional service costs.

(b) Includes all personnel and other costs related to sales and marketing, including but not limited to, sales and marketing staff, commissions and marketing events.

(c) Includes all personnel and other costs related to general administration as well as costs shared across the organization, including but not limited to technology, finance and strategy.

(d) Includes amortization of definite‑lived trade names and acquired customer relationship assets.

(e) In 2014, other operating expenses included legal costs related to the acquisition of Simpler in April 2014, other professional fees incurred related to business process improvement and documentation, costs associated with data migration and losses on discontinued projects, severance costs for certain positions that were eliminated as part of the change in the Company's operating segment structure, asset write-offs, and the Sponsor fee for Veritas Capital. In 2013, other operating expenses represent costs incurred to transition the Company to a standalone business. These costs include nonrecurring expenses

associated with data center migration, separating the infrastructure from Predecessor Parent, and the related consulting and professional fees. These costs also include severance and retention bonuses relating to the Acquisition and the Sponsor fee for Veritas Capital. See Note 7 to the condensed consolidated financial statements included elsewhere in this quarterly report.

(f) Interest earned or paid, net of interest income related to third party transactions.

Discussion of nine months ended September 30, 2014 and 2013

Revenues, net

Our net revenues were $~~394~~143.92 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $~~363~~118.53 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $3124.49 million or 921%. ~~This~~The increase was primarily due to the $3522.90 million increase in revenue from our ~~commercial~~Commercial segment, ~~which~~and ~~includes~~ $233.52 million ofincrease in revenue from ~~Simpler's~~our ~~Operations~~Government ~~from~~segment. The ~~April~~increase ~~12,~~in ~~2014~~revenue tofrom ~~September 30,~~our ~~2014,~~Commercial ~~impact~~segment ofwas ~~the~~primarily ~~$2.1~~due ~~million deferred revenue adjustment in 2014 compared~~ to ~~the~~ $719.98 million ~~deferred~~of ~~revenue~~revenues ~~adjustment~~from inour ~~2013~~businesses inacquired ~~connection~~after ~~with~~ the ~~Acquisition,~~first ~~and~~quarter ~~incremental~~of ~~fees from subscriptions primarily from MarketScan solutions~~2014. ~~These~~The ~~were~~increase ~~offset by a $4.5 million decrease~~ in revenue from our Government segment ~~due~~was tomainly ~~lower~~from ~~revenue~~the ~~and~~Federal ~~implementation~~government ~~services~~channel due to ~~timing~~new ofcontract ~~government projects~~revenues. ~~For a detailed explanation of the variations in revenue for each of our segments, see the individual segment discussions below.~~

The total impact on revenue related to the deferred revenue adjustment for both our Commercial and Government segments in connection with Prior Acquisition and acquisitions during 2014 amounted to $2.1 million compared to $0.7 million in 2014.

For a more detailed explanation of the variations in revenue for each of our segments, see the individual segment discussions below.

Cost of revenues, excluding depreciation and amortization

Our cost of revenues, excluding depreciation and amortization, was $~~221~~83.18 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $~~201~~70.03 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $2013.15 million, or 1019%. ~~This~~The increase was ~~primarily~~mainly due to ~~$11.9~~cost ~~million~~ of ~~incremental~~revenues ~~costs~~from the operations of ~~revenues~~our ~~from~~businesses ~~Simpler's~~acquired ~~operations~~in 2014 of $10.6 million. WeThe ~~also~~remaining ~~had~~increase anwas ~~increase~~due into higher salaries and ~~wages~~benefits ~~due~~of to$1.7 ~~the~~million as a result of an increase in ~~head~~headcount ~~count~~ and ~~higher~~$1.9 ~~maintenance~~million ~~costs~~ of ~~developed~~higher ~~technology~~maintenance and ~~content,~~data ~~and~~costs ~~higher~~as ~~costs~~we onincrease ~~projects~~our oncapacity ~~federal~~partly ~~and~~for ~~state~~our ~~agencies.~~government projects.

Selling and marketing expense, excluding depreciation and amortization

Our selling and marketing expense, excluding depreciation and amortization, was $4215.69 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $4213.17 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $02.52 million, or 116%, which is mainly due to selling and marketing expenses attributable to ~~Simpler's~~the operations of our businesses acquired in 2014.

General and administrative expense, excluding depreciation and amortization

Our general and administrative expense, excluding depreciation and amortization, was $3916.19 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $3111.3 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $75.86 million, or 2550%. The increase was primarily due to $5.70 million of additional general and ~~and~~ administrative expenses attributable to ~~Simpler's~~the operations of our businesses acquired in 2014. InThe ~~addition,~~remaining increase relates to incremental salaries and wages expense and consulting fees which were increased to build the accounting, internal audit, procurement, and human resource departments, as well as from the additional hiring of senior executive management in operations.

Depreciation and amortization

Our depreciation and amortization expense was $7929.0 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $6324.94 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $154.16 million or 2419%. This increase was primarily due to the overall ~~impact~~increase ofin ~~new~~amortizable ~~computer~~intangible ~~hardware~~assets ~~and~~resulting ~~other~~from ~~property,~~businesses ~~and~~acquired ~~developed~~in ~~technology~~2014, ~~and~~partially ~~content~~offset ~~related~~by tolower ~~the~~depreciation ~~new data center and new information system infrastructure that were placed~~ in ~~service~~computer inhardware ~~late 2013~~ and ~~the~~other ~~additional~~property ~~amortization~~as ofcertain ~~Intangible~~ assets ~~from~~became ~~the~~fully ~~acquisition~~depreciated ofin ~~Simpler~~2014. The ~~Incremental~~incremental depreciation and amortization from the ~~acquisition~~businesses ofacquired ~~Simpler~~in 2014 amounted to $74.07 million.

3431

Other operating expenses

Our other operating expense was $1710.23 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $286.85 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, aan ~~decrease~~increase of $113.68 million or 4058%. The ~~decrease~~increase was mainly due to the $152.42 million ~~decrease~~increase in acquisition -related cost and ~~nonrecurring~~non-recurring expenses ~~due~~incurred to integrate the ~~completion~~acquired ofbusinesses, ~~separating~~a ~~our~~$1.3 ITmillion ~~infrastructure~~increase ~~from Predecessor Parent initiated~~ in ~~2013~~write-off ~~and~~of ~~due~~prepaid torevenue ~~the~~share ~~$1.4~~agreement ~~million~~with ofa ~~retention~~supplier ~~bonus~~that ~~recorded~~will innot ~~2013~~be ~~entered~~recovered ~~into~~and bya ~~the~~$0.3 ~~Predecessor~~million ~~Parent~~increase ~~with key TRHI employees~~ in ~~conjunction~~Sponsor ~~with~~fee ~~the~~from ~~disposal~~Veritas ~~of the business~~Capital.

Operating loss

Our operating loss was $412.18 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to an operating loss of $38.60 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase in operating loss of $04.58 million, ~~from~~or ~~2013~~60%. The increase in operating loss was primarily due to a $3124.49 million increase in revenue while total operating expenses increased by $3129.97 million ~~as discussed above~~.

Net interest expense

Our net interest expense was $5118.45 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015, as compared to $5416.83 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, aan ~~decrease~~increase of $32.42 million, or 614%. The ~~decrease~~increase was primarily due to a $3140.30 million ~~loss on early extinguishment~~ of additional debt asused ~~a result of refinancing the Term Loan Facility in April 2013 that effectively reduced the interest rate by 1.25% on the Term Loan Facility, offset by an increase in interest expense due~~ to ~~the~~finance ~~increase of $100 million in~~ the ~~term~~acquisitions ~~loan related to the acquisition of Simpler~~ in ~~April~~ 2014.

Benefit from (provision for) income taxes

Our ~~income~~ tax ~~benefit~~provision was $210.23 million for the ~~nine~~three months ended ~~September~~March 31, 302015, ~~2014~~ as compared to a benefit of $215.91 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, aan ~~decrease~~increase of $05.74 million or 3106%. Income tax ~~benefit~~provision for the ~~nine~~three months ended ~~September~~March 31, 302015, ~~2014~~at an effective tax rate of (0.9)%, is different from the amount derived by applying the federal statutory tax rate of 35%, mainly due to the impact of certain state taxes and ~~nine~~tax credits partially offset by non deductible expenses and valuation allowance of $8.0 million recorded against the Company's net deferred tax asset as it is not more likely than not that the net deferred tax asset will be realized. Income tax benefit for the three months ended ~~September~~March 3031, ~~2013~~2014, at an effective tax rate of 3820.08% ~~and 37.2%~~, is ~~respectively, are~~ different from the amount derived by applying the federal statutory tax rate of 35%, mainly due to the impact of certain state income taxes, partially offset by ~~nondeductible~~non deductible expenses.

Segment Discussion

The following table summarizes our unaudited interim condensed consolidated segment information and discussion of the results of our operations for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013, under the new reportable segment structure~~2014:

(Dollars in thousands)	~~Nine~~Three months ended ~~September~~March 3031, ~~2014~~2015			% of revenue		~~Nine~~Three months ended ~~September~~March 3031, ~~2013~~2014			% of revenue		Change			% change
Commercial
Revenues	$	~~324~~118,~~946~~380		100	%	$	~~289~~96,~~062~~350		100	%	$	3522,~~884~~030		1223	%
Segment operating income	~~110~~35,~~137~~536			3430	%	9729,~~804~~957			3431	%	125,~~333~~579			1319	%
Government
Revenues	6925,~~928~~135			100	%	7421,~~419~~912			100	%	(43,~~491~~223		)	(615	)%
Segment operating income	1,334			2	%	8,835			12	%	(7,501		)	(85	)%
Segment operating loss	(1,277		)	(5	)%	(641		)	(3	)%	(636		)	99	%

Commercial segment

Revenues

Our Commercial revenue was $~~324~~118.94 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $~~289~~96.14 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $3522.90 million or 1223%. The increase was primarily due to the $23.5 million of revenue from Simpler's operations from April 12, 2014 to September 30, 2014 and due to the impact from the $0.8 million deferred revenue adjustment in 2014 compared to the $6.7 million deferred revenue adjustment in 2013 in connection with the Acquisition. The remaining increase in revenue was due to new sales, incremental fees from subscriptions mainly from MarketScan solutions, partially offset by a decline in revenue from planning and marketing services.

the $19.8 million of revenue from operations of businesses acquired in 2014. Additionally, revenue increased by $2.2 million due to new sales and incremental fees from subscriptions, primarily from MarketScan solutions.

Operating income

Our Commercial operating income was $~~110~~35.15 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $9730.80 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, an increase of $125.36 million or 1319%. This was ~~partially~~primarily due to the $5.1.9 million of incremental operating income from ~~Simpler's~~newly ~~operations. The~~acquired ~~remaining~~business ~~increase~~operations, inas ~~operating~~well ~~income~~as ~~was mainly due to~~ an increase in revenue, ~~and~~offset by a decrease in ~~the~~costs ~~deferred~~due ~~revenue~~to ~~adjustment in connection with~~ the ~~Acquisition~~integration ~~as discussed above, partially offset by higher maintenance costs~~ of ~~developed~~Provider ~~technology~~Solutions and ~~content,~~different ~~telecommunications~~cost ~~costs~~reduction ~~and~~measures ~~other~~taken ~~revenue~~across ~~related costs upon completion of our transition to a standalone company, as well as~~ the ~~increase in administrative costs to maintain our international branches established in mid-2013~~Company.

Government segment

Revenues

Our Government revenue was $6925.91 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to $7421.49 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014, aan ~~decrease~~increase of $43.52 million or 615%. This was primarily due to ~~lower~~a ~~implementation~~$2.5 million increase in revenue onfrom ~~enterprise~~Federal ~~data~~government ~~warehouse~~channel ~~projects~~due ~~and~~to ~~migration~~new contract revenues and ~~timing~~$0.7 ofmillion ~~other~~in State government channel coming from subscription services after completion of certain implementation projects in 2014.

Operating income

Our Government operating ~~income~~loss was $1.3 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 as compared to ~~operating income of~~ $80.86 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2013, a decrease in operating income of $7~~2014.~~5 million or 85% .~~ The ~~decrease~~increase ~~was due to a $4.5 million decrease~~ in ~~revenue~~loss asmostly ~~discussed~~relates ~~above,~~to ~~and~~the ~~higher~~additional headcount costs ~~mainly~~from ~~due~~our ~~to the Company's~~ initiatives to improve sales in the federal and state agencies, such as Centers for Medicare & Medicaid Services, state Medicaid agencies, as well as federally owned and operated healthcare facilities. Additional costs were incurred with respect to certain large new projects that will start later in 2015.

Non-GAAP Measures

EBITDA and Adjusted EBITDA Calculation

EBITDA is defined as net income before net interest (expense) income, provision for income taxes, and depreciation and amortization, and is used by management to measure the overall operating performance of the business at a consolidated level. Adjusted EBITDA is defined as EBITDA, adjusted to exclude certain items of a significant or unusual nature, including but not limited to acquisition and related costs, acquisition related non-cash adjustments (e.g. deferred revenue fair value adjustments), non-cash compensation expense, restructuring costs, Veritas sponsor fees, gains or losses on the sale of non-strategic assets, asset impairments and write-downs. We also use EBITDA and Adjusted EBITDA as a measure to calculate certain financial covenants related to the Senior Credit Facility and as a factor in our tangible and intangible asset impairment testing.

EBITDA and Adjusted EBITDA are supplemental measures of our overall performance and our ability to service debt that are not required by, or presented in accordance with GAAP. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income or other performance measures derived in accordance with GAAP, or as alternatives to cash flow from operating activities as measures of our liquidity. In addition, our measurements of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Management believes that the presentation of EBITDA and Adjusted EBITDA and the ratios using EBITDA and Adjusted EBITDA included in this quarterly report provide useful information to investors regarding our results of operations because they assist in analyzing and benchmarking the performance and value of our business.

EBITDA and the ratios using EBITDA and Adjusted EBITDA included in this quarterly report provide useful information to investors regarding our results of operations because they assist in analyzing and benchmarking the performance and value of our business.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:


•	EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;


•	EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;


•	EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes;


•	EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;


•	EBITDA and Adjusted EBITDA do not reflect pension and post-retirement obligations;

• ~~Although~~although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

• ~~Other~~other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.

The following table is a reconciliation of our net loss to EBITDA and Adjusted EBITDA for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014 presented:

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

(Dollars in thousands)

~~2014~~2015

~~2013~~2014

~~2014~~

~~2013~~

Net loss

(632,~~620~~010

)

(819,~~343~~257

)

~~(34,677~~

)

~~(36,968~~

)

Benefit from income tax

(6,048

)

(4,865

)

(21,215

)

(21,902

)

Provision for (Benefit from) income tax

290

(5,060

)

Net interest expense

1718,~~663~~472

16,~~661~~273

~~51,352~~

~~54,753~~

Depreciation

45,~~931~~135

56,~~422~~593

~~17,448~~

~~14,411~~

Amortization of developed technology and content

910,~~820~~809

89,~~228~~197

~~28,689~~

~~23,672~~

Amortization of other identifiable intangible assets

1113,~~960~~025

8,615

~~32,843~~

~~25,845~~

EBITDA

3115,~~706~~721

2516,~~718~~361

~~74,440~~

~~59,811~~

Acquisition related and other nonrecurring charges(1)

53,~~201~~357

71,~~637~~182

~~10,628~~

~~26,830~~

Non-cash stock compensation expense

~~316~~311

~~370~~240

~~955~~

~~1,137~~

Deferred revenue adjustments(2)

~~726~~2,051

~~1,007~~672

~~2,143~~

~~7,907~~

Asset write-off (3)

—6,000

—4,706

~~4,706~~

—

Other(4)

~~625~~981

~~660~~641

~~1,867~~

~~2,420~~

Adjusted EBITDA

3828,~~574~~421

3523,~~392~~802

~~94,739~~

~~98,105~~

(1) Acquisition -related costs and ~~other~~non-recurring ~~nonrecurring~~ charges in ~~2014~~2015 ~~included~~mainly ~~legal~~represent costs ~~and~~including ~~other~~ professional fees ~~related~~as toa ~~the~~result ~~acquisition~~ of ~~Simpler~~integrating inthe ~~April~~acquired ~~2014,~~businesses ~~various~~to ~~professional~~the ~~fees~~Company. ~~incurred~~ Acquisition-related tocosts ~~business~~and ~~process~~non-recurring ~~documentation~~charges ~~and~~in ~~improvements~~2014 ~~and~~included ~~severance~~legal costs ~~for~~related ~~certain~~to ~~positions~~the ~~that~~acquisition ~~were eliminated as part~~ of ~~the~~Simpler ~~change~~ in ~~the~~April ~~Company's operating segment structure initiated in the second quarter of~~ 2014. ~~Acquisition~~(see ~~related~~Note 3) and other ~~nonrecurring~~professional ~~charges~~fees inincurred ~~2013 included retention incentives to key employees~~ related to ~~the~~business ~~Acquisition~~improvement ~~and nonrecurring costs as we transitioned to a standalone company~~processes. See Note 7 to the unaudited condensed consolidated financial statements, included elsewhere in this quarterly report.

(2) Amount of the reduction in deferred revenue as a result of the Prior Acquisition that negatively impacted our revenue. We wrote down the value of our deferred revenue based on valuation analysis completed as a result of the Prior Acquisition.

(3) Represents write-off of ~~advanced~~prepaid revenue share with a supplier. See Note 12 to the unaudited condensed consolidated financial statements, included elsewhere in this quarterly report.

(4) Represents Sponsor advisory fees ~~and non-cash vacation accrual true up charges~~ in connection with the ~~Acquisition~~Prior ~~in 2013~~Acquisition.

3734

Liquidity and Capital Resources

Cash flows

The following table summarizes our cash activities:

(In thousands)	~~Nine~~Three months ended ~~September~~March 3031,
	2014				2013
	2015			2014
Net cash provided by operating activities	$29,704	~~38,062~~		$	$30,617	~~1,151~~
Net cash used in investing activities	(~~101~~12,~~812~~446	)	)	(10,299	~~(34,853~~	)	)
Net cash provided by financing activities	76,090				17,685
Net cash used in financing activities	(1,753	)		(17,458		)

Operating activities

Cash provided by operating activities for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 was $3829.17 million as compared to $130.26 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2013~~2014, ana ~~increase~~decrease of $360.9 million. The ~~increase~~net decrease was mainly due to a $310.69 million increase in ~~higher~~interest payments toas ~~various~~a ~~suppliers~~result inof ~~2013~~a ~~mainly~~$140.0 ~~due~~million toadditional ~~timing~~debt ofto ~~cash~~finance ~~payments~~acquisitions ~~related~~in to2014. Cash ~~disentanglement~~receipts ~~costs~~from incustomers ~~2013,~~increased aby $53.4 million ~~increase in cash receipts from customers~~ due to improved efforts in collection, ~~and~~but ahad been offset by $03.14 million ~~decrease~~ in ~~interest~~higher payments ~~due~~ to avarious ~~lower~~suppliers ~~interest~~mainly ~~rate~~due asto atiming ~~result~~ of ~~the~~cash ~~April~~payments ~~2013~~related ~~Refinancing.~~to higher maintenance on technology.

Investing activities

Cash used in investing activities for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015 was $~~101~~12.84 million, as compared to $3410.93 million for the ~~nine~~three months ended ~~September 30~~March 31, ~~2013~~2014. The increase was mainly due to the ~~acquisition~~timing of ~~Simpler~~payments ~~on April 11, 2014 for a net cash paid~~ of ~~$77.4~~ ~~million, offset by lower~~ capital expenditures onrelated to computer hardware asand adeveloped ~~result~~technology ofand ~~the~~content ~~completion of the data center~~ in ~~late 2013 and~~ the ~~timing~~normal ofcourse ~~cash payments~~ of ~~capital expenditures~~business.

Financing activities

Cash ~~provided~~used byin financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 was $~~76.~~1.8 million. This amount consisted of $~~100~~1.06 million ~~of incremental loan to finance the Simpler Transaction, offset by $15.0 million net repayment of Revolving Credit Facility, $2.9 million debt issuance costs, $4.5 million~~ principal repayment of the Senior Term Loan Facility and $10.52 million principal payment of capital lease obligation.

Cash ~~provided~~used byin financing activities for the ~~nine~~three months ended ~~September 30~~March 31, ~~2013~~2014 was $17.75 million. This amount consisted of a $15.0 million Revolving Credit Facility repayment of a loan drawn for working capital requirements, $21.~~0 million of additional capital contribution from Holdings LLC, and net proceeds of $11.~~3 million ~~from the April 2013 refinancing, partially offset by $4.0 million~~ of principal repayment of ~~senior term loan, $5.8 million of premium payment to lenders for~~ the ~~April~~Senior ~~2013~~Term ~~refinancing~~Loan Facility and $01.81 million principal payment of capital lease obligation.

Liquidity and Capital Resources

~~Our~~We ~~principal~~believe that our cash flows from operations and our existing available cash, together with our other available external financing sources, will be adequate to meet our future liquidity needs ~~are~~for ~~expected~~the tonext twelve months. Our principal liquidity needs will be to fund capital expenditures, provide working capital, meet debt service requirements and finance our strategic plans, including possible acquisitions. We expect to spend approximately $20.6 million on capital expenditures for the remainder of 2015 (excluding acquisitions and related costs); however, actual capital expenditures may differ. For ongoing liquidity purposes, we primarily intend to utilize our existing cash and cash equivalents, cash generated from operations and borrowings under our Revolving Credit Facility. ~~However, we may require supplemental sources of capital to finance acquisitions.~~

Our cash position is impacted by our billings from on-going services and subscription contracts. Typically, a significant ~~amount~~portion of ~~consideration on~~ the contract revenue is paid upfront and most contracts are renewed during the latter part of the fourth quarter. Many renewals are billed in December and January, which are normally collected in the first quarter of the following year. As such, we have historically experienced a low level of cash every third quarter of a calendar year, but that may

3835

~~year, but that may~~ vary depending on any new significant contracts driven by state government projects, concurrent with the start of the state government’s fiscal year.

WeAs ~~believe~~of March ~~that our cash flows from operations and our existing available cash~~31, ~~together with our other available external financing sources~~2015, ~~will~~we behad ~~adequate~~outstanding toletters ~~meet our future liquidity needs for at least the next year. We expect to spend approximately $13 million on capital expenditures for the remainder~~ of ~~2014~~credit ~~(excluding acquisitions and related costs); however, actual capital expenditures may differ. As~~ of ~~September 30, 2014, the available credit under the Revolving Credit Facility was~~ $277.5 million, ~~after~~which ~~giving~~reduced ~~effect~~the toavailable ~~$15.0~~line ~~million~~ of ~~Revolving Credit Facility for working capital requirements and letter of~~ credit into ~~the amount of~~ $742.5 million ~~as surety on government contracts~~.

Indebtedness

As of ~~September~~March 3031, ~~2014~~2015, the aggregate principal amount of our outstanding indebtedness was $~~968~~990.64 million, consisting of $~~626~~623.53 million under the Term Loan Facility and $~~327~~367.21 million of Notes.

A discussion of our outstanding indebtedness as of ~~September~~March 3031, ~~2014~~2015 is below:

Senior Credit Facility

The Senior Credit Facility, as amended on April 11, 2014, is with a syndicate of banks and other financial institutions and provides financing of up to $679.7 million, consisting of a $629.7 million Term Loan Facility with a maturity of five years and the $50.0 million Revolving Credit Facility with a maturity of five years. As of ~~September~~March 3031, ~~2014~~2015, the Company had an ~~available~~outstanding ~~line~~letters of credit ~~under the Revolving Credit Facility~~ of $277.5 million, ~~after~~which, ~~giving~~while ~~effect~~not todrawn, ~~$15.0~~reduce ~~million~~the ofavailable ~~Revolving~~line ~~Credit Facility for working capital requirements and letter~~ of credit inunder the ~~amount~~Revolving ofCredit Facility to $742.5 million ~~as surety on government contracts~~.

Borrowings under the Senior Credit Facility, other than swing line loans, bear interest at a rate per annum equal to an applicable margin plus, at Truven's option, either (a) a base rate determined by reference to the highest of (1) the prime rate of JPMorgan Chase Bank, N.A., (2) the federal funds effective rate plus 0.50% and (3) the one month Eurodollar rate plus 1.00%; provided, that the base rate for the Term Loan Facility at any time shall not be less than 2.25%, or (b) a Eurodollar rate adjusted for statutory reserve requirements for a one, two, three or six month period (or a nine or twelve month interest period if agreed to by all applicable lenders); provided that the Eurodollar base rate used to calculate the Eurodollar rate for the Term Loan Facility at any time shall not be less than 1.25%. Swing line loans will bear interest at the interest rate applicable to base rate loans, plus an applicable margin. In addition to paying interest on outstanding principal under the Senior Credit Facility, we are required to pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at a rate equal to 0.50% (subject to reduction upon attainment of certain leverage ratios). We will also pay customary letter of credit fees and certain other agency fees. Truven may voluntarily repay outstanding loans under the Senior Credit Facility at any time without premium or penalty, other than customary “breakage” costs with respect to adjusted LIBOR loans. We are required to repay $1.6 million of the Term Loan Facility quarterly, through March 31, 2019, with any remaining balance due June 6, 2019.

All obligations under the Senior Credit Facility are guaranteed by Truven Holding and each of Truven's existing and future wholly-owned domestic subsidiaries. As ~~of June 30, 2014, certain domestic subsidiaries acquired by the Company became a guarantor under the Senior Credit Facility.~~ All obligations under the Senior Credit Facility and the guarantees of those obligations are collateralized by first priority security interests in substantially all of Truven's assets as well as those of each guarantor (subject to certain limited exceptions).

The Senior Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, Truven's ability, and the ability of each of any restricted subsidiaries, to: sell assets; incur additional indebtedness; prepay other indebtedness (including the Notes); pay dividends and distributions or repurchase its capital stock; create liens on assets; make investments; make certain acquisitions; engage in mergers or consolidations; engage in certain transactions with affiliates; amend certain charter documents and material agreements governing subordinated indebtedness,; change the business conducted by it and its subsidiaries; and enter into agreements that restrict dividends from subsidiaries.

39In addition, the Senior Credit Facility requires Truven to maintain a quarterly maximum consolidated senior secured leverage ratio in accordance with the debt covenants as long as the commitments under the Revolving Credit Facility remain outstanding (subject to certain limited exceptions). The Senior Credit Facility also contains certain customary representations and warranties, affirmative covenants and events of default. As of March 31, 2015, the Consolidated Senior Secured Leverage Ratio and the maximum ratio were 3.61 and 4.25, respectively, and we were in compliance with all of the Senior Credit Facility covenants.

In addition, the Senior Credit Facility requires Truven, beginning with the fiscal quarter ended June 30, 2012, to maintain a quarterly maximum consolidated senior secured leverage ratio in accordance with the debt covenants as long as the commitments under the Revolving Credit Facility remain outstanding (subject to certain limited exceptions). The Senior Credit Facility also contains certain customary representations and warranties, affirmative covenants and events of default. We are in compliance with all of these credit facility covenants as of September 30, 2014. 36

On October 3, 2012, we entered into the First Amendment to the Senior Credit Facility with a syndicate of banks and other financial institutions with no changes in the terms and conditions other than the reduction of the applicable margin by 1.00%.

On April 26, 2013, we entered into the Second Amendment to the Senior Credit Facility (~~referred to as the~~ "April 2013 Refinancing") with a syndicate of banks and other financial institutions to (i) increase the aggregate principal amount of the Term Loan Facility from $523.7 million to $535.0 million, (ii) reduce the applicable margin by 1.25%, (iii) with respect to the Term Loan Facility, determine the applicable margin in accordance with a pricing grid based on our consolidated total leverage ratio following delivery of financial statements at the end of each fiscal year or quarter, as applicable, after the second quarter of fiscal year 2013, (iv) revise the quarterly principal payments from $1,319.0 to $1,337.5 starting on June 30, 2013, and (v) extend the 1% repricing call protection from June 6, 2013 to October 26, 2013. There were no other changes to the terms and conditions.

On April 11, 2014, inwe ~~connection~~entered ~~with~~into the ~~acquisition~~Third ofAmendment ~~Simpler, we entered into~~ (the "Third Amendment") to our Senior Credit ~~Agreement. The~~Facility ~~Third Amendment provided~~ for a $100.0 million increase in the ~~Supplemental~~ Tranche B Term Loans, and increased the total amount available under the Senior Credit ~~Agreement~~Facility to $679.7 million, consisting of a $629.7 million ~~term~~Term ~~loan~~Loan ~~facility~~Facility and a $50.0 million ~~revolving~~Revolving ~~credit~~Credit ~~facility~~Facility (which ~~remains~~remained unchanged). The Company borrowed the entire $100.0 million principal amount of the Supplemental Tranche B Term Loans to finance the acquisition of Simpler, repay outstanding loans of $15.0 million in aggregate principal amount under its Revolving Credit Facility and pay fees and expenses relating to the acquisition of Simpler. Under the terms of the Third Amendment, the Company must repay the principal amount of the Tranche B Term Loans in twenty consecutive quarterly installments beginning on June 30, 2014 and continuing through March 31, 2019 in the amount of $1.6 million each, and a final installment on June 6, 2019 in the amount of $597.8 million. The terms and conditions that apply to the Supplemental Tranche B Term Loans under the Third Amendment are substantially the same as the terms and conditions that apply to the existing Tranche B Term Loans under the Senior Credit Facility.

OnThe ~~April~~Third ~~11,~~Amendment ~~2014,~~also weamended ~~borrowed~~ the ~~entire~~Senior ~~$100.0~~Credit ~~million~~Facility ~~principal~~to ~~amount~~make ofcertain ~~the~~adjustments ~~Tranche B Term Loans~~ to ~~finance~~ the ~~acquisition~~Consolidated ofSenior ~~Simpler,~~Secured ~~repay~~Leverage ~~outstanding~~Ratio ~~loans~~applicable ~~of $15.0 million in aggregate principal amount under its revolving credit facility and pay fees and expenses relating~~ to the ~~acquisition~~Company ofby ~~Simpler.~~increasing ~~Under~~ the ~~terms~~maximum ofpermitted ~~the~~ratios ~~Third~~for ~~Amendment,~~certain weperiods ~~must~~from ~~repay the principal amount of the Tranche B Term Loans in twenty consecutive quarterly installments beginning on June 30,~~ 2014 ~~and~~to ~~continuing~~2016. During ~~through March 31~~2014, ~~2019~~all indomestic ~~the~~subsidiaries ~~amount~~acquired ofby ~~$1,590 each, and a final installment on June 6, 2019 in~~ the ~~amount~~Company ofbecame ~~$597.8~~guarantors ~~million. The terms and conditions that apply to the Supplemental Tranche B Term Loans~~ under the ~~Third~~Senior ~~Amendment are substantially the same as the terms and conditions that apply to the existing Tranche B Term Loans under the~~ Credit ~~Agreement~~Facility.

The Third Amendment also amended the Credit Agreement to make certain adjustments to the Consolidated Senior Secured Leverage Ratio applicable to us by increasing the maximum permitted ratios for certain periods from 2014 to 2016.

10.625% Senior Notes due 2020

~~The~~Old Notes, which were issued under an indenture, dated June 6, 2012 (the “Indenture”), with The Bank of New York Mellon Trust Company, N.A. as trustee, bear interest at a rate of 10.625% per annum, payable on June 1 and ~~December 1~~Additional of each year (commencing on December 1, 2012), and have a maturity date of June 1, 2020. On the same day, we entered into the first supplemental indenture (the “First Supplemental Indenture”), whereby Truven became a party to the Indenture as successor in interest to Wolverine. The Notes are general unsecured senior obligations of Truven, fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Truven Holding and each of Truven's existing and future wholly-owned domestic restricted subsidiaries that is a borrower under or that guarantees the obligations under the Senior Credit Facility or any other indebtedness of Truven or any other guarantor.

~~Truven~~The ~~may~~Old ~~redeem~~Notes ~~some~~were orissued ~~all~~on ofJune ~~the~~6, ~~Notes~~2012, atunder ~~any~~an ~~time~~indenture ~~prior~~(the ~~to June 1~~"Indenture", ~~2016~~as atsupplemented ~~100%~~by of the ~~principal~~First ~~amount~~Supplemental ~~thereof~~Indenture, ~~plus~~whereby ~~the~~Truven ~~applicable~~became ~~premium~~a ~~pursuant~~party to the Indenture as ofsuccessor ~~the~~in ~~applicable~~interest ~~redemption~~to ~~date~~Wolverine, ~~plus accrued~~ and ~~unpaid~~the ~~interest~~Second ~~and~~Supplemental ~~any additional interest to~~Indenture), ~~but~~with ~~excluding,~~The ~~the~~Bank ~~applicable redemption date. Truven may redeem some or all~~ of ~~the~~New ~~Notes~~York atMellon ~~any~~Trust ~~time on or after June 1~~Company, ~~2016 at 105~~N.~~313%~~A. ofas ~~the~~trustee, ~~principal~~which ~~amount~~bear ~~thereof,~~an ~~declining~~interest ~~ratably~~at toa ~~100%~~rate of ~~the~~10.625% ~~principal~~per ~~amount~~annum, ~~thereof~~are payable on ~~or after~~ June 1, ~~2018,~~and ~~plus,~~December in1 of each ~~case~~year, ~~accrued~~ and ~~unpaid~~have ~~interest~~a ~~and~~maturity ~~any additional interest to, but excluding, the applicable redemption~~ date. Inof ~~addition, at any time prior to~~ June 1, ~~2015 Truven (subject to certain conditions) may redeem up to 35% of the aggregate principal amount of the Notes using net~~ 2020.

40The Additional Notes were issued pursuant to the Indenture, as supplemented by the Fifth Supplemental Indenture, dated as of November 12, 2014 (the "Fifth Supplemental Indenture") by and among Truven, the Guarantors and the Trustee. The Additional Notes form a single series with the Old Notes and have the same terms as the Old Notes and rank equal in right of payments with the Old Notes.

~~cash~~The ~~proceeds~~Notes ~~from~~are ~~certain~~general ~~equity~~unsecured ~~offerings~~senior atobligations ~~110.625%~~ of ~~the~~Truven, ~~aggregate~~fully ~~principal amount of the Notes plus accrued~~ and ~~unpaid~~unconditionally ~~interest and any additional interest~~guaranteed, ~~to,~~jointly ~~but~~and ~~excluding~~severally, ~~the~~on ~~applicable~~a ~~redemption~~senior ~~date.~~unsecured Ifbasis by Truven ~~experiences~~Holding aand ~~change~~each of ~~control~~Truven’s ~~(as~~existing ~~defined~~and infuture ~~the~~wholly-owned ~~Indenture),~~domestic itrestricted ~~will~~subsidiaries bethat ~~required~~is toa ~~make~~borrower anunder ~~offer~~or tothat ~~repurchase~~guarantees the ~~Notes~~obligations atunder ~~a price in cash equal to 101% of~~ the ~~aggregate~~Senior ~~principal~~Credit ~~amount~~Facility ~~thereof,~~or ~~plus~~any ~~accrued~~other ~~and~~indebtedness ~~unpaid~~of ~~interest,~~Truven ~~and~~or any ~~additional~~other ~~interest, to, but excluding, the date of purchase~~guarantor.

~~The Indenture contains covenants limiting~~ Truven ~~and~~may ~~its~~redeem ~~restricted~~some ~~subsidiaries with respect to other indebtedness, investments, liens, dividends, purchases~~ or ~~redemptions~~all of ~~stock, transactions with affiliates and mergers and sales of assets. The Indenture also contains covenants limiting~~ the ~~ability~~Notes ofat ~~wholly-owned~~any ~~restricted~~time ~~subsidiaries~~prior to ~~guarantee payment of any indebtedness of Truven or any subsidiary guarantor and limiting Truven Holding's business and operations. Following the acquisition of Simpler on April 12~~June 1, ~~2014,~~2016 ~~the~~at ~~wholly~~100% ~~owned domestic subsidiaries we acquired became guarantors~~ of the ~~Senior~~principal ~~Credit~~amount ~~Facility and~~thereof, asplus ~~a result, were required to become guarantors of~~ the ~~Notes. However,~~applicable ~~the~~premium ~~supplemental~~pursuant ~~indenture~~ to the Indenture ~~to include these subsidiaries~~ as ~~guarantors was only executed on November 3, 2014. Following the execution~~ of the ~~third~~applicable ~~supplemental~~redemption ~~indenture on November 3~~date, ~~2014,~~plus weaccrued ~~are~~and inunpaid ~~compliance with all of the covenants under the Indenture.~~

interest and any additional interest to, but excluding, the applicable redemption date. Truven may redeem some or all of the Notes at any time on or after June 1, 2016 at 105.313% of the principal amount thereof, declining ratably to 100% of the principal amount thereof on or after June 1, 2018, plus, in each case, accrued and unpaid interest and any additional interest to, but excluding, the applicable redemption date. In addition, at any time prior to June 1, 2015, Truven (subject to certain conditions) may redeem up to 35% of the aggregate principal amount of the Notes using net cash proceeds from certain equity offerings at 110.625% of the aggregate principal amount of the Notes plus accrued and unpaid interest and any additional interest, to, but excluding, the applicable redemption date. If Truven experiences a change of control (as defined in the Indenture), it will be required to make an offer to repurchase the Notes at a price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, and any additional interest, to, but excluding, the date of purchase.

The Indenture contains covenants limiting Truven and its wholly-owned restricted subsidiaries with respect to other indebtedness, investments, liens, dividends, purchases or redemptions of stock, transactions with affiliates and mergers and sales of assets. The Indenture also contains covenants limiting the ability of wholly-owned restricted subsidiaries to guarantee payment of any indebtedness of Truven or any subsidiary guarantor and limiting the Company's business and operations. Following our series of acquisitions in 2014, all the domestic subsidiaries we acquired became guarantors of the Notes as a result of the guarantees of the Senior Credit Facility provided by such subsidiaries. The guarantees were entered into pursuant to the Third, Fourth and Sixth Supplemental Indentures. We were in compliance with all of these covenants as of March 31, 2015.

On June 5, 2013, we entered into the second supplemental indenture (the “Second Supplemental Indenture”), whereby the guarantee release provision in the Indenture, which allows guarantors to be released from their obligations under the Indenture upon the release or discharge of such guarantor’s guarantee of the Senior Credit Facility or the guarantee which resulted in the creation of the guarantee under the Indenture (subject to certain limitations), was amended to apply only to subsidiary guarantors and not to Truven Holding.

Summary disclosures about contractual obligations and commercial commitments

The following table sets forth our contractual obligations and other commitments as of ~~September~~March 3031, ~~2014~~2015:

Payments by period

(in thousands)

Total

Less than 1 year

1-3 years

3-5 years

After 5 years

Notes(1)

~~327~~367,150

—

~~327~~367,150

Other long-term obligations(2)

~~641~~623,~~470~~290

6,360

12,720

~~622~~604,~~390~~210

—

Interest on indebtedness(3)

~~341~~332,~~846~~184

6367,~~763~~416

~~126~~133,~~566~~807

~~116~~111,~~757~~456

3419,~~760~~505

Operating lease obligations(4)

4256,~~481~~545

109,~~708~~861

1615,~~551~~997

812,~~673~~355

618,~~549~~332

Capital lease obligations(5)

2,~~466~~022

~~759~~695

~~1,518~~758

~~189~~569

—

Total contractual obligation

1,~~355~~381,~~413~~191

8184,~~590~~332

~~157~~163,~~355~~282

~~748~~728,~~009~~590

~~368~~404,~~459~~987


(1)	Represents the principal amount of indebtedness on the Notes.


(2)	Represents the principal amount of indebtedness under our Senior Credit Facility.

(3) Total interest payments consist of fixed and floating rate interest obligations and the cash flows associated with the Senior Credit Facility and Notes. The interest rate on the floating rate Senior Credit Facility and fixed rate Notes has been assumed to be the same as the applicable rates during the month of ~~September~~March ~~2014~~2015. The one month LIBOR rate on the Senior Credit Facility during the month of ~~September~~March ~~2014~~2015 was below the floor rates established in accordance with the respective agreements. Interest on the Senior Credit Facility was based on the assumed rate of 4.5%. Interest on Exchange Notes was 10.625%.


(4)	Represents amounts due under existing operating leases related to our offices and other facilities.


(5)	Represents the principal amount of capital lease obligations, including interest.

Off-balance sheet arrangements

Effective January 1, 2013, the Company modified its agreement with a supplier under which it markets and licenses to its customers a private label version of the supplier's platform solution in conjunction with the Company's health information applications. The agreement contains a revenue share arrangement based on net revenue targets. The supplier's revenue share percentage is guaranteed by the Company in the minimum amounts of $2.0 million, $4.0 million and $6.0 million, for the calendar years 2013, 2014 and 2015, respectively. The guaranteed revenue share is paid in advance by the Company on March 1st of each calendar year and is applied against the revenue share of the supplier earned through March 1st of the following calendar year. The agreement provides a grace period for the Company of up to August 31st of the following calendar year in the event that the supplier's revenue share earned does not reach the prepayment amount. After the grace period, if the revenue share earned does not meet the minimum target then the entire prepayment amount is deemed earned by the supplier. During the first quarters of 2015 and 2014, the Company wrote off $6.0 million and $4.7 million of the prepaid balance, respectively, as it was determined that the estimated revenue share of the supplier will not be met within the grace period. As of March 31, 2015, there are no prepaid revenue share balances on the Company's balance sheet.

41As of March 31, 2015, other than operating leases in the normal course of business and the guaranteed revenue share arrangement discussed above, we had no other off-balance sheet arrangements or obligations.

supplier's revenue share percentage is guaranteed by the Company in the minimum amounts of $2 million, $4 million and $6 million, for the calendar years 2013, 2014 and 2015, respectively. The guaranteed revenue share is paid in advance by the Company on March 1st of each calendar year and is applied against the revenue share of the supplier earned through March 1st of the following calendar year. The agreement provides a grace period for the Company of up to August 31st of the following calendar year in the event that the supplier's revenue share earned does not reach the prepayment amount. After the grace period, if the revenue share earned does not meet the minimum target then the entire prepayment amount is deemed earned by the supplier. During the three months ended March 31, 2014, $4.7 million of the prepaid balance had been written off as it was determined that the estimated revenue share of the supplier will not be met by the grace period. As of September 30, 2014, there are no prepaid revenue share balances on the Company's balance sheet.

As of September 30, 2014, other than operating leases in the normal course of business and the guaranteed revenue share arrangement discussed above, we had no other off-balance sheet arrangements or obligations.

Emerging Growth Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.”

Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year during which we had total annual gross revenues of $1 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed a “large accelerated issuer” as defined under the federal securities laws.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of its financial statements. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. See Note 2 to the audited financial statements and "Management’s Discussion and Analysis - Critical Accounting Policies", for the year ended December 31, ~~2013~~2014, included in our Form 10-K, for further discussion of the Company’s critical accounting estimates and policies.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

We have been subject to interest rate risk in connection with our Term Loan Facility and our Revolving Credit Facility. As of ~~September~~March 3031, ~~2014~~2015, we have $~~641~~623.53 million of outstanding principal under our Term Loan Facility and Revolving Credit Facility, bearing interest at variable rates with an established LIBOR floor of 1.25% per annum. We currently do not hedge this interest rate exposure. The underlying one month LIBOR rate as of ~~September~~March 3031, ~~2014~~2015 was 0.1518%. Based on a one-year time frame and all other variables remaining constant, a 1% increase or decrease in interest rates would have no impact on the interest expense because the LIBOR floor under our Senior Credit Facility is higher than the prevailing interest rates.

would have no impact on the interest expense because the LIBOR floor under our Senior Credit Facility is higher than the prevailing interest rates.

In the future, in order to manage our interest rate risk, we may refinance our existing debt, enter into interest rate swaps, modify our existing interest rate swaps or make changes that may impact our ability to treat our interest rate swaps as a cash flow hedge. However, we do not intend or expect to enter into derivative or interest rate swap transactions for speculative purposes. We have adopted a hedging policy, which is consistent with the covenants under the Senior Credit Facility.

Foreign Currency Exchange Risk

WeAs a result of series of acquisitions, we have established or acquired certain foreign subsidiaries in the United Kingdom, India, Canada, Brazil, and ~~India~~Belgium whose functional currency is the British Pound Sterling, ~~(GBP) and~~ Indian Rupee, ~~(INR)~~Canadian Dollar, Brazilian Real, and Euro, respectively. These subsidiaries ~~are~~were ~~start-up~~primarily ~~entities~~established to function as sales and ~~have~~marketing nosupport ~~significant~~to ~~impact~~the onParent and are not significant to our operations. We do not believe that changes in ~~the~~these ~~GBP~~currencies ~~and INR~~ relative to the U.S. dollar will have a significant impact on our financial condition, results of operations or cash flows. As we continue to grow our operations, we may obtain certain contracts and increase the amount of our sales to foreign clients. Although we do not expect foreign currency exchange risk to have a significant impact on our future operations, we will assess the risk on a case-specific basis. Currently, we do not hedge our exposure to translation gains or losses in respect of our non-dollar functional currency assets or liabilities.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 15d -15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September~~March 3031, ~~2014~~2015. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of ~~September~~ March 3031, ~~2014~~2015 because of the material ~~weaknesses~~weakness discussed below.

Management's Report on Internal Control over Financial Reporting

WeManagement ~~are~~of ~~currently~~the ~~not~~Company ~~required~~is toresponsible ~~comply~~for ~~with~~establishing ~~items (a)~~ and ~~(b)~~maintaining ofadequate ~~Regulation~~internal ~~S-K~~control ~~308~~over ~~(the~~financial ~~SEC’s~~reporting, ~~rule~~as ~~implementing~~defined ~~Section~~in ~~404~~Rules ~~of the Sarbanes Oxley Act of 2002~~13a-15(f) and ~~are~~15d-15(f) ~~therefore~~under ~~not required to make a formal assessment of~~ the ~~effectiveness~~Exchange ofAct. The ~~our~~Company’s internal control over financial reporting ~~for~~is ~~that~~designed ~~purpose.~~to ~~Further,~~provide ~~our~~reasonable ~~independent~~assurance ~~registered~~regarding ~~public~~the ~~accounting~~reliability ~~firm~~of isfinancial ~~not~~reporting ~~required~~and tothe ~~formally~~preparation ~~attest~~of tofinancial ~~the~~statements ~~effectiveness~~in ofaccordance ~~our~~with ~~internal~~U.S. ~~controls~~generally ~~over~~accepted ~~financial~~accounting ~~reporting~~principles.

~~Identification of Material Weaknesses~~ 40

InBecause ~~connection with the audits~~ of ~~our~~its ~~financial~~inherent ~~statements for the years ended December 31~~limitations, ~~2013 and 2012, we identified control deficiencies in our~~ internal control over financial reporting ~~that~~may constituted material weaknesses. As defined in Exchange Act Rule 12b-2 and Rule 1-02 of Regulation S-X, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant's annual or financial statements will not beprevent ~~prevented~~ or ~~detected~~detect onall ~~a timely basis~~misstatements. ~~Specifically~~Also, itprojections ~~was~~of ~~determined~~any ~~that~~evaluation ~~material~~of ~~weaknesses~~effectiveness ~~exist~~to asfuture ~~follows:~~periods ~~(1)~~are ~~the~~subject ~~Company~~to ~~does not maintain effective controls over reconciliation of certain financial statement accounts; (2)~~ the ~~Company~~risk ~~does~~that ~~not maintain effective~~ controls ~~over~~may ~~the~~become ~~accounting~~inadequate ~~for~~because ~~business~~of ~~combinations;~~changes ~~(3)~~in ~~the~~conditions, ~~Company~~or ~~does~~that ~~not maintain effective controls over~~ the ~~accounting~~degree ~~for taxes; and (4) the Company does not maintain a sufficient complement~~ of ~~personnel~~compliance with anthe ~~appropriate~~policies ~~level~~or ofprocedures ~~accounting~~may ~~knowledge, experience and training in the application of GAAP~~deteriorate.

43The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2015. In making this assessment, the Company’s management used the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of March 31, 2015, the Company’s internal control over financial reporting was not effective based on those criteria due to the material weakness described below.

~~These~~As ~~material~~defined ~~weaknesses resulted~~ in ~~audit~~Exchange ~~adjustments~~Act toRule ~~our~~12b-2 ~~accounts~~ and ~~disclosures.~~Rule ~~Each~~1-02 of ~~the~~Regulation ~~material~~S-X, ~~weaknesses~~a ~~described~~material ~~above~~weakness ~~could~~is ~~result~~a indeficiency, or a ~~misstatement~~combination of ~~our~~deficiencies, ~~accounts~~in orinternal ~~disclosures~~control over financial reporting such that ~~would~~there ~~result~~is ina reasonable possibility that a material misstatement of ~~our~~the registrant's annual or interim ~~consolidated~~ financial statements ~~that~~will ~~would~~ not be prevented or detected on a timely basis. The Company previously reported a material weakness related to our resource complement. Specifically, the Company does not maintain a sufficient complement of personnel with an appropriate level of accounting knowledge, experience and training in the application of GAAP. This material weakness continues to exist as of March 31, 2015.

~~Remediation~~This material weakness resulted in audit adjustments to our 2014 consolidated financial statements. This material weakness could result in a misstatement of ~~Material~~our ~~Weaknesses~~accounts or disclosures that would result in ~~Process~~a material misstatement of our annual or interim consolidated and combined financial statements that would not be prevented or detected.

~~The~~As ~~Company~~we isare inan ~~the~~Emerging ~~process~~Growth ~~of remediation efforts on the above listed material weaknesses. The~~ Company ~~is currently implementing the requirements of Section 404~~ and, ~~while undergoing this implementation, is addressing the processes and controls surrounding the above mentioned material weaknesses. As~~ a ~~part~~public ofdebt ~~this implementation~~filer, ~~the~~our ~~Company~~independent ~~had~~registered ~~documented~~public ~~its significant financial reporting processes and controls, including the processes around account reconciliations,~~ accounting ~~for~~firm ~~taxes~~is ~~and~~not ~~accounting~~required ~~for~~to ~~business~~formally ~~combinations.~~attest ~~Key controls have been identified, documented, and will be tested in 2014. Remediation efforts, where applicable, will be identified, tracked and monitored~~ to ~~ensure~~the effectiveness of ~~control~~our ~~design~~internal ~~and~~controls ~~operation.~~over ~~While~~financial ~~undergoing this process, the Company will continue to assess current staffing levels and skills and has committed to supplement staffing and training as appropriate~~reporting.

~~The~~ Remediation ~~following actions, under the supervision of the Company's management, have been implemented during the year:~~ Plan

•To ~~The~~remediate ~~Company~~the ~~has~~material ~~augmented~~weakness ~~its~~related ~~quarterly and annual financial procedures~~ to ~~allow~~our ~~for~~finance ~~more substantive review of financial results before the release of quarterly earnings~~ and ~~the~~accounting ~~filing~~resources, ofmanagement ~~the~~plans ~~quarterly reports of Form 10-Q and Annual Report on Form 10-K.~~to:

• ~~The~~Hire ~~Company~~additional ~~has~~subject ~~documented~~matter ~~all~~experts ~~financially~~in ~~significant~~the ~~processes,~~areas ~~identified~~of ~~related~~revenue ~~key~~recognition ~~controls~~ and, ~~control~~capitalization ~~design~~of ~~gaps,~~assets ~~and devised a plan for remediation~~ to ~~enhance~~assist the ~~controls,~~Controller’s ~~particularly~~group inwith ~~the~~handling ~~area~~complex ofaccounting ~~account reconciliations~~transactions.

• ~~The~~Hire ~~Company~~additional ~~has~~experienced ~~added~~accounting ~~resources~~personnel to support general accounting activities at the ~~additional~~business ~~review~~unit ~~procedures~~level, ~~and~~newly toacquired ~~support~~businesses ~~remediation~~and ~~activities~~international locations.

~~Management~~• isProvide ~~committed~~training ~~to finalizing remediation plans~~ and ~~implementing~~comprehensive ~~the~~guidance, ~~necessary~~while ~~enhancements~~enhancing ~~to remediate the material weaknesses over the course of the next three months. The material weaknesses will not be considered remediated until: (1) the new processes are designed~~process, ~~appropriately~~procedures ~~controlled~~ and ~~implemented for a sufficient period of time; and (2) we have sufficient evidence that the new processes and related~~ controls ~~are operating effectively~~.

Management continues to be committed to finalizing remediation plans and implementing the necessary enhancements to remediate this material weakness prior to December 31, 2015. The material weakness will not be considered remediated until: (1) new personnel are hired and new processes are designed, appropriately controlled and implemented for a sufficient period of time; and (2) we have sufficient evidence that the new personnel and new processes and related controls are operating effectively.

Changes in Internal Control over Financial Reporting

AsThere ~~described~~have ~~above~~been ~~under~~no ~~“Management’s~~changes ~~Report on Internal Controls over Financial Reporting” and “Remediation of Material Weaknesses~~ in ~~Process”, the Company is not required to make a formal assessment of the effectiveness of~~ our internal control over financial reporting ~~until~~(as ~~December~~defined ~~31,~~in ~~2014. However,~~Rules ~~during~~13a-15(f) ~~the~~and ~~quarter,~~15d-15(f) under the ~~Company~~Exchange ~~continued~~Act) ~~implementing~~during ~~various~~the ~~requirements~~period ofcovered ~~Section~~by ~~404~~this ofreport ~~the~~that ~~Sarbanes-Oxley~~have ~~Act. During~~materially ~~this process~~affected, ~~management~~or ~~has~~are ~~identified~~reasonably ~~opportunities~~likely to ~~enhance~~materially ~~the~~affect, ~~design~~our ~~and effectiveness of such~~ internal ~~controls~~control ~~and~~over ~~has~~financial ~~been implementing those improvements during the quarter~~reporting.

4441

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we become involved in legal proceedings arising in the ordinary course of our business. We believe that the outcome of these proceedings will not have a material effect on our financial condition, results of operations or cash flows. The legal proceedings described in Note 12 to Part I of this quarterly report are incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes in the risk factors as disclosed in our Annual Report on Form 10-K filed on March 3113, ~~2014~~2015.

Item 5. Other Information

None.

4542

Item 6. Exhibits

Exhibit Number	Exhibit Description
10.1	Third Amendment to the Credit Agreement, dated as of April 11, 2014, among Truven HoldingCorp., Truven Health Analytics Inc., the Lenders Party Thereto, JPMorgan Chase Bank, N.A.,as Administrative Agent, and J.P. Morgan Securities LLC, as Sole Lead Arranger and SoleBookrunner, filed as Exhibit 10.1 to the Company's current report on Form 8-K, filed on April14, 2014, file number 333-187931, is incorporated herein by reference.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
101*	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Unaudited Interim Condensed Consolidated Balance Sheets as of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, (ii) Unaudited Interim Condensed Consolidated Statements of Comprehensive ~~Income (~~Loss) for the three ~~and~~month ~~nine~~period ~~months~~ ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014, (iii) Unaudited Interim Condensed Consolidated Statements of Cash Flows for the ~~nine~~three month period ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014, (iv) Unaudited Interim Condensed Consolidated Statement of Equity as of ~~September~~March 3031, ~~2014~~2015 and (v) Notes to Interim Unaudited Condensed Consolidated Financial Statements.

* Filed herewith.

4643

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.

Date: ~~November~~May 37, ~~2014~~2015



		TRUVEN HEALTH ANALYTICS INC.
		(Registrant)

		By: /s/ MIKE BOSWOOD
		Mike Boswood, President and Chief Executive Officer

		By: /s/ PHILIP BUCKINGHAM
		Philip Buckingham, Executive Vice President and Chief Financial Officer

4744

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.

Date: ~~November~~May 37, ~~2014~~2015



		TRUVEN HOLDING CORP.
		(Registrant)

		By: /s/ MIKE BOSWOOD
		Mike Boswood, President and Chief Executive Officer

		By: /s/ PHILIP BUCKINGHAM
		Philip Buckingham, Executive Vice President and Chief Financial Officer

4845

EXHIBIT INDEX

Exhibits

Exhibit Number	Exhibit Description
10.1	Third Amendment to the Credit Agreement, dated as of April 11, 2014, among Truven HoldingCorp., Truven Health Analytics Inc., the Lenders Party Thereto, JPMorgan Chase Bank, N.A.,as Administrative Agent, and J.P. Morgan Securities LLC, as Sole Lead Arranger and SoleBookrunner, filed as Exhibit 10.1 to the Company's current report on Form 8-K, filed on April14, 2014, file number 333-187931, is incorporated herein by reference.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
101*	Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Unaudited Interim Condensed Consolidated Balance Sheets as of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, (ii) Unaudited Interim Condensed Consolidated Statements of Comprehensive ~~Income (~~Loss) for the ~~nine~~three ~~months~~month period ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014, (iii) Unaudited Interim Condensed Consolidated Statements of Cash Flows for the ~~nine~~three month ~~periods~~period ended ~~September~~March 3031, ~~2014~~2015 and ~~September~~March 3031, ~~2013~~2014, (iv) Unaudited Interim Condensed Consolidated Statement of Equity as of ~~September~~March 3031, ~~2014~~2015 and (v) Notes to Interim Unaudited Condensed Consolidated Financial Statements.

* Filed herewith.

4946

Filing Compare · Truven Holding Corp.