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OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the IMS Health fourth quarter and full year 2008 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session.
(Operator Instructions). As a reminder, this conference is being recorded, Thursday, February 5th, 2009.
I would now like to turn the conference over to Darcie Peck, Vice President, Investor Relations. Please go ahead.
DARCIE PECK, IR, IMS HEALTH: Thank you. Good morning and welcome to the IMS fourth quarter 2008 earnings conference call. With me this morning are Dave Carlucci, our Chairman and Chief Executive Officer, Leslye Katz, our Chief Financial Officer, and Gilles Pajot, our Chief Operating Officer. Dave and Leslye will discuss highlights from our fourth quarter and full year results, our guidance for 2009 and then we'll open it up for your questions. As in the past, we've posted slides on our website and I would encourage you to view these during our prepared remarks this morning.
Certain statements we'll make today are forward-looking within the meaning of the US Federal Securities Laws. These statements include certain projections regarding the trends in our business, future events and future financial performance. We caution you that these statements are just predictions and the actual event or results may differ. They can be affected by inaccurate assumptions or by known or unknown risks or uncertainties. Consequently, no forward-looking statement can be guaranteed.
I call your attention to our fourth quarter 2008 earnings release which we issued earlier today and our 2007 10-K which describe the factors that could cause actual results to differ materially from those contained in our forward-looking statements. Forward-looking statements represent our views only as of the date they're made and the Company undertakes no obligation to correct or update them, whether as a result of new information, future events or otherwise.
Certain of the financial measures we'll talk about today are on an adjusted non-GAAP basis. These may include, for example, operating income, net income, earnings per share and free cash flow. A detailed reconciliation to results on a US GAAP reported basis is in our press release and I encourage you to review the notes in our press release, further describing adjusted non-GAAP measures.
Now, let me turn the call over to Dave Carlucci. Dave?
DAVE CARLUCCI, CEO, IMS HEALTH: Thanks, Darcie and thanks, everyone, for joining us today. We delivered a solid performance for the year, driving excellent cash flow and improving our operating margin in the fourth quarter. That speaks to our disciplined cost and expense management, and focused execution.
Revenue growth was just under 0.5% constant dollar in the fourth quarter and that reflected market realities as the economic downturn intensified. While the quarter was our weakest from a revenue perspective, I'm pleased with our team's ability to manage our business in this environment and adapt to the market.
For the full year, preliminary free cash flow was $317 million, near the high end of our guidance range. Earnings per share on a comparable basis grew 11% to $1.70, achieving our full year guidance. Our revenue growth was 6% reported and 3% on a constant dollar basis, meeting our revised guidance. And we maintained our operating margin at 22% for the year.
Before we get to the details of our results, let me spend a few minutes talking about some of the factors that drove our performance last year. It's clear that the aggressive restructuring plans we've put in place at the end of 2007 were the right actions. When the economic downturn hit hard in the fall, we had already positioned ourselves for lower cost and expense structure. That, along with an intense focus on cash flow generation, enabled us to deliver on both our EPS and free cash flow guidance, despite a revenue slowdown. These same focus areas put us in a very good position to execute our plans in 2009.
We all know this is an industry that is going through a lot of change. What we saw at the end of 2008 and continuing into this year is that clients are re-evaluating their business models and implementing new commercial strategies. They're choosing growth opportunities more decisively, whether it's investing in emerging markets, refocusing their portfolios, or looking to accelerate their transformations through mergers and acquisitions. And these strategic investments we have made over the past few years put us right in the center of helping our clients.
As they implement their new commercial models, they have increased their spend on specialty, patient level and enhanced commercial effectiveness offerings. As they work more closely with government and payors, clients are turning to IMS for managed markets insights and to help them prove the value of their medicines and gain market access. As clients implement their growth strategies for emerging markets, our global presence and portfolio management expertise work to our advantage, as we drive broader engagements. And we're driving growth in new client segments, including generics companies, governments, payors and consumer health audiences. While clients are being very selective in their overall spend, they are increasing their investments in these spaces and we're benefiting from that.
The fact is, we're the only company that has the global scale, diverse portfolio of offerings and financial flexibility to build leadership positions in these areas. There are unique opportunities out there for us and we've made the changes to our business, adjusting our priorities and how we allocate resources to capitalize on these market trends and improve our own productivity. In 2008, we realigned about 20% of our client-facing teams, strengthening account management and business development. We consolidated our consulting practices, adjusted our business line structure and built out new business process outsourcing capabilities.
At the same time, we drove cost reductions by integrating our production operations, streamlining administrative functions and exiting some non-strategic businesses. We're investing in the right areas and have made the right adjustments to our business. I'll talk later about how that translates into our 2009 plans. But first, Leslye will take you through the details of our results and our financial guidance for this year. Leslye?
LESLYE KATZ, CFO, IMS HEALTH: Thank you, Dave. Let me get right to our fourth quarter results, starting with cash. We had an excellent quarter from a cash perspective.
Preliminary free cash flow in Q4 was $162 million, bringing the full year to $317 million. This is an outstanding performance for the year, especially in light of the $51 million in cash we spent in 2008 for the restructuring program. Our DSO in the fourth quarter was a key contributor to this strong cash performance. DSO continued its steady improvement in 2008, coming in at 59 days for the fourth quarter. This is three days better than Q4 2007, and reflects the results of our continuing focus on cash collection.
The other elements of our financial performance were in line with what I laid out on our Q3 call. Revenue was $581 million, up just under one-half of …