UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒

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

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

For the fiscal year ended December 31, 2017

2023

or

☐

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

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

For the transition period from to .

Commission File Number: 001-35907

IQVIA HOLDINGS INC.

iqv10k20191231htmimage1.jpg
(Exact name of registrant as specified in its charter)

Delaware

27-1341991
(State or other jurisdiction of
incorporation or organization)

27-1341991

(I.R.S. Employer
Identification Number)

4820 Emperor Blvd.

2400 Ellis Rd., Durham, North Carolina 27703

and

83 Wooster Heights Road, Danbury, Connecticut 06810

(Address of principal executive officesoffice and Zip Code)


(919) 998-2000 and (203) 448-4600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)		Name of each exchange on which registered

Title of Each Class:

Name of Each Exchange on which Registered

Common Stock, par value $0.01 per share

IQV

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or section 15(d) of the Exchange Act. Yes ☐ No ☒

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 twelve 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 ☒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 ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☒

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

(Do not check if a smaller reporting company)

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒



The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, based upon the closing sale price as reported on the New York Stock Exchange on June 30, 2017,2023, the last business day of the registrant’s most recently completed second quarter, was approximately $12,189,011,444.

Indicate the number$40.8 billion.

    As of February 5, 2024, there were approximately 181.5 million shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

registrant’s common stock outstanding.

Class

Number of Shares Outstanding

Common Stock $0.01 par value

208,251,468 shares outstanding as of February 12, 2018

Portions of the registrant’s Proxy Statement for the 20182024 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2017.

2023.




IQVIA HOLDINGS INC.

FORM 10-K

TABLE OF CONTENTS

 

 

Item

Item

Page

 

ItemPage

PART I

PART I

 

1.

Business

5

1.
1.
5

1A.

Risk Factors

15

1A.
18

1B.

Unresolved Staff Comments

38

1B.
44
1C.1C.
45

2.

Properties

38

2.
46

3.

Legal Proceedings

39

3.
46

4.

Mine Safety Disclosures

40

4.
46

PART II

PART II

 

PART II
47

5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

41

5.
47

6.

Selected Financial Data

44

6.
49

7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

46

7.
49

7A.

Quantitative and Qualitative Disclosures About Market Risk

68

7A.
65

8.

Financial Statements and Supplementary Data

70

8.
68

9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

127

9.
115

9A.

Controls and Procedures

127

9A.
116

9B.

Other Information

127

9B.
116
9C.9C.
116

PART III

PART III

 

PART III
117

10.

Directors, Executive Officers and Corporate Governance

128

10.
117

11.

Executive Compensation

129

11.
118

12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

129

12.
118

13.

Certain Relationships and Related Transactions and Director Independence

130

13.
119

14.

Principal Accountant Fees and Services

130

14.
119

PART IV

PART IV

 

PART IV
120

15.

Exhibits and Financial Statement Schedules

131

15.
120

Exhibit Index

Exhibit Index

132

121

16.

Form 10-K Summary

136

16.
124

Signatures

Signatures

137

124

2






FORWARD-LOOKING STATEMENTS


Except for any historical information contained herein, the matters discussed or incorporated by reference in this Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements reflect, among other things, our current expectations, our forecasts and our anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words “assumes,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” "forecasts," “plans,” “projects,” “should,” “seeks,” “sees,” “targets,” “will” and the negative thereof“will,” “would” and similar words and expressions, and variations and negatives of these words are intended to identify forward-looking statements. statements, although not all forward-looking statements contain these identifying words.

We caution you that any such forward-looking statements are further qualified by important factors that could cause our actual operating results to differ materially from those in the forward-looking statements, including without limitation, that business disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) outbreak, including any variants, and the public health policy responses to the outbreak, international conflict or other disruptions outside of our control such as the current situation in Ukraine and Russia; most of our contracts may be terminated on short notice, and we may lose or experience delays with large client contracts or be unable to enter into new contracts; the market for our services may not grow as we expect; we may be unable to successfully develop and market new services or enter new markets; imposition of restrictions on our use of data by data suppliers or their refusal to license data to us; any failure by us to comply with contractual, regulatory or ethical requirements under our contracts, including current or future changes to data protection and privacy laws; breaches or misuse of our or our outsourcing partners’ security or communications systems; failure to meet our productivity or business transformation objectives; failure to successfully invest in growth opportunities; our ability to protect our intellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights; the expiration or inability to acquire third party licenses for technology or intellectual property; any failure by us to accurately and timely price and formulate cost estimates for contracts, or to document change orders; hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements; the rate at which our backlog converts to revenues; our ability to acquire, develop and implement technology necessary for our business; consolidation in the industries in which our clients operate; risks related to client or therapeutic concentration; government regulators or our customers may limit the number or scope of indications for medicines and treatments or withdraw products from the market, and government regulators may impose new regulatory requirements or may adopt new regulations affecting the biopharmaceutical industry; the risks associated with operating on a global basis, including currency or exchange rate fluctuations and legal compliance, including anti-corruption laws; risks related to changes in accounting standards; general economic conditions in the markets in which we operate, including financial market conditions, inflation and risks related to sales to government entities; the impact of changes in tax laws and regulations; and our ability to successfully integrate, and achieve expected benefits from, our acquired businesses.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A, “Risk Factors.” If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected or as otherwise suggested by the forward-looking statements that we make for a number of reasons. Given these uncertainties, users of the information included or incorporated by reference in this Annual Report on Form 10-K, including investors and prospective investors, are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements are made only as of the date hereof. We assume no obligation to update any such forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.

information.


GENERAL

On October 3, 2016, Quintiles Transnational Holdings Inc. (“Quintiles”) completed its previously announced merger of equals transaction (the “Merger”) with IMS Health Holdings, Inc. (“IMS Health”). Pursuant to the terms of the merger agreement dated as of May 3, 2016 between Quintiles and IMS Health (the “Merger Agreement”), IMS Health was merged with and into Quintiles, and the separate corporate existence of IMS Health ceased, with Quintiles continuing as the surviving corporation. Immediately prior to the completion of the Merger, Quintiles reincorporated as a Delaware corporation. Quintiles changed its name to Quintiles IMS Holdings, Inc. At the effective time of the Merger, each issued and outstanding share of IMS Health common stock was automatically converted into 0.3840 of a share of the Company’s common stock.

On November 6, 2017, IQVIA Holdings Inc. (the “Company”) filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) to effect a change of the Company’s name from “Quintiles IMS Holdings, Inc.” to “IQVIA Holdings Inc.,” effective as of November 6, 2017 (the “Name Change”).

On November 15, 2017, shares of the Company commenced trading under an updated New York Stock Exchange ticker symbol, “IQV,” and a new CUSIP number, 46266C 105.


When we use the terms “IQVIA,” the “Company,” “we,” “us” or “our” in this Annual Report on Form 10-K, we mean IQVIA Holdings Inc. and its subsidiaries on a consolidated basis, unless we state or the context implies otherwise.

Industry and Market Data



3

INDUSTRY AND MARKET DATA

This annual reportAnnual Report on Form 10-K includes market data and forecasts with respect to the healthcare industry. In some cases, we rely on and refer to market data and certain industry forecasts that were obtained from third party surveys, market research, consultant surveys, publicly available information and industry publications and surveys that we believe to be reliable. However, we have not independently verified data from industry analyses and cannot guarantee their accuracy or completeness. We believe that data regarding the industry, market size and its market position and market share within such industry provide general guidance but are inherently imprecise. Other industry and market data included in this annual report are from IQVIA analyses and have been identified accordingly, including, for example, IQVIA Market Prognosis, which is a subscription-based service that provides five-year pharmaceutical market forecasts at the national, regional and global levels. We are a leading global information provider for the healthcare industry and we maintain databases, produce market analyses and deliver information to clients in the ordinary course of our business. Our information is widely referenced in the industry and used by governments, payers, academia, the life sciences industry, the financial community and others. Most of this information is available on a subscription basis. Other reports and information are available publicly through our IQVIA Institute for Healthcare InformaticsHuman Data Science (the “IQVIA Institute”). All such information is based upon our own market research, internal databases and published reports and has not been verified by any independent sources. Our estimates and assumptions involve risks and uncertainties and are subject to change based on various factors, including those discussed in thePart I, Item IA, “Risk Factors” section.Factors.” These and other factors could cause results to differ materially from those expressed in the estimates and assumptions.

3

Trademarks and Service Marks

TRADEMARKS AND SERVICE MARKS

All trademarks, trade names, product names, graphics and logos of QuintilesIMS, Quintiles, IMS Health or IQVIA contained herein are trademarks or registered trademarks of IQVIA Holdings Inc. or its subsidiaries, as applicable, in the United States and/or other countries. All other party trademarks, trade names, product names, graphics and logos contained herein are the property of their respective owners. The use or display of other parties’ trademarks, trade names, product names, graphics or logos is not intended to imply, and should not be construed to imply, a relationship with, or endorsement or sponsorship of IQVIA Inc. or its subsidiaries by such other party.


Solely for convenience, the trademarks, service marks and trade names referred to in this annual report are listed without the ®,®, (sm) and (TM) symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. We do not intend our use or display of other companies’ trademarks or service marks to imply an endorsement or sponsorship of us by such other companies.



4


PART I


Item 1. Business


Our Company

We are


IQVIA is a leading global provider of information, innovativeadvanced analytics, technology solutions, and contractclinical research services focused on helping healthcare clients find better solutions for patients. Formed through the Merger of IMS Health and Quintiles, we apply human data science – leveraging the analytic rigor and clarity of data science to the ever-expanding scopelife sciences industry. IQVIA creates intelligent connections across all aspects of human science –healthcare through its analytics, transformative technology, big data resources, extensive domain expertise and network of partners. IQVIA Connected Intelligence delivers actionable insights and powerful solutions with speed and agility — enabling customers to enable companies to reimagine and develop new approaches toaccelerate the clinical development and commercialization speed innovation,of innovative medical treatments that improve healthcare outcomes for patients. With approximately 87,000 employees, we conduct operations in more than 100 countries.

We are a global leader in protecting individual patient privacy. We use a wide variety of privacy-enhancing technologies and accelerate improvements insafeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. Powered by the IQVIA CORE™, we deliver uniqueOur insights and actionable insights at the intersection of large scale analytics, transformative technology and extensive domain expertise, as well as execution capabilities to help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances, in an effort to advance their path toward cures. With more than 55,000 employees, we conduct operations in more than 100 countries.


We have one of the largest and most comprehensive collections of healthcare information in the world, which includes more than 530 million1.2 billion comprehensive, longitudinal, non-identified patient records spanning sales, prescription and promotional data, medical claims, electronic medical records, genomics, and social media. Our scaled and growing datainformation set contains approximately 3061 petabytes of unique proprietary data sourced from more than 120,000approximately 150,000 data suppliers and covering over 900,000one million data feeds globally. Based on this data, we deliver information and insights on over 85%90% of the world’s pharmaceuticals, as measured by 20162022 sales. We standardize, organize,curate, structure and integrate this datainformation by applying our sophisticated analytics and leveraging our global technology infrastructure. This helps our clients run their organizations more efficiently and make better decisions to improve their clinical, commercial and financial performance. The breadthWe have developed a comprehensive portfolio of the intelligent, actionable information we provide is not comprehensively available from any other sourceofferings over a period of many years through innovation, expertise and hard work that differentiates our scope of information would be difficult and costly for another partycapabilities to replicate.

support customers throughout the world.


We leveragecombine our proprietary information assets with advanced analytics, transformative technology and domain expertise to develop clinical and commercial capabilities with a talented healthcare-focused workforce that enablesenable us to grow our relationships with healthcare stakeholders throughout the life science’s value chain. This set of capabilities includes:


•A leading healthcare-specific global IT infrastructure,representing what we believe is one of the largest and most sophisticated information technology (“IT”) infrastructures in healthcare. We receive over 70approximately 120 billion healthcare records annually, and our infrastructure then connects complex healthcare data while applying a wide range of privacy, security, operational, legal and contractual protections for data in response to local law, supplier requirements and industry leading practices;


•Analytics-driven clinical development, which improves clinical trial design, site identification and patient recruitment by empowering therapeutic, scientific, and domain experts with expansive levels of information, including product level tracking in 9094 markets, and information about treatments and outcomes on more than 530 million1.2 billion unique non-identified patients;

patient records globally;

•Robust real-world insightsreal world solutions ecosystem,with sophisticated retrospective database analytics, prospective real-worldreal world data collection technology platforms and scientific expertise, which enables us to address critical healthcare issues of cost, value and patient outcomes;


•A growing set of proprietary clinical and commercial applications,which helps our clients increase their clinical operations performance, supports their regulatory and supportscompliance needs and orchestrates their sales operations, sales management, multi-channel marketing and performance management; and


5

•Integration of information, analytics, technology, and domain expertise through IQVIA Connected Intelligence, which enables us to provide our clients with more effective options to address their needs from research and development through commercialization as well as truly innovative breakthroughs such as decentralized trials and global real-world evidence networks; and


•A staff of more than 55,000approximately 87,000 employees across the globe, including approximately 19,000 Commercial Servicesover 30,000 Technology & Analytics Solutions employees, approximately 29,00048,000 Research & Development Solutions employees and approximately 7,000 Integrated Engagement ServicesContract Sales & Medical Solutions employees.

5

Our mission-critical relationships with our life science clients consist of four important decision-making processes related to their product portfolios: Research and Development, Pre-Launch, Launch and In-Market. We continue to develop software and services applications to further deepen our level of client integration by enabling our clients to enhance and/or automate many components of these key decision-making processes.

•Market opportunity assessment

•Drug pricing optimization

•Market access

•Commercial operations

•Project management and clinical
monitoring

•Launch readiness

•Health technology
assessment

•Sales force effectiveness

•Clinical trial support services

•Commercial planning

•Commercial readiness

•Sales force alignment

•Patient recruitment

•Brand positioning

•Forecasting

•Multi-channel marketing

•Clinical trial laboratory services

•Message testing

•Resource allocation

•Client relationship
management

•Strategic clinical trial planning
and design

•Influence networks

•Contract sales force

•Lifecycle management

•Territory design

•Observational studies

•Stakeholder engagement

We believe that a powerful component of our value proposition is the breadth and depth of intelligence we provide to help our clients address fundamental operational questions.

User

Illustrative Questions

Research & Development

Which study centers have the target patients?

Are there enough patients for my clinical trial?

How long will trial enrollment take to hit target patient volumes?

Sales

Which providers generate the highest return on representative visit?

Does my sales representative drive appropriate prescribing?

How much should I pay my sales representative next month?

Marketing

What share of patients is appropriately treated?

Which underserved patient populations will benefit most from my new drug?

Is my brand gaining market share quickly enough to hit revenue forecasts?

Real-World Evidence/Pharmacovigilance

What is the likely impact of new therapies on costs and outcomes?

Are new therapies performing better against existing standards of care in real-world settings?

Does real-world data indicate adverse events not detected in clinical trials?


6

Our Market Opportunity


We compete in a market of greater than $230$330 billion consisting of outsourced research and development, real-world evidence and connected health and technology enabled clinical and commercial operations markets for the life sciences companies and the broader healthcare industry. The following sets forth our estimates for the size of our principal markets:


•Outsourced research and development:Biopharmaceutical spending on drug development totaled approximately $100$184 billion in 2017.2023. Of that amount, we estimate that our addressable opportunity (clinical development spending excluding preclinical spending) was approximately $59$99 billion. The portion of this addressable opportunity that was outsourced in 2017,2023, based on our estimates, was approximately $26 billion;

$50 billion.

•Real-World Evidence and connected health:Total addressable market of approximately $80$70 billion based on 2017 salesin 2023 that consists of two relatively equal parts.tightly coupled life sciences and healthcare markets. First, the life sciences market for Real-World Evidence of approximately $40$30 billion includes traditionally defined analytic platformspost-launch evidence generation, market access, and implementation, medical and scientific analytic services, observation studies and market access.affairs. Second, the marketaddressable opportunity for connected healthcare ofis approximately $40 billion, and includes areas such as revenue cycle management, payer & provider analytics and clinical decision support services; and

services.

•Technology enabled commercial operations:Total addressable market of approximately $50$80 billion based on 2017 salesin 2023 that includes information, data warehousing, IT outsourcing, software applications and other services in the broader market for IT services. This addressable marketopportunity also includes commercial services such as recruiting, training, deploying and managing global sales forces, channel management, patient engagement services, market access consulting, brand communication, advisory services, and health information analytics and technology consulting.


In deriving estimates of the size of the various markets described above, we review third-party sources, which include estimates and forecasts of spending in various segments, in combination with internal IQVIA research and analysis informed by our experience serving these segments, as well as projected growth rates for each of these segments. See “Industry and Market Data” above.


We believe there are six key trends affecting our end markets that will create increasing demand for research and development services, technology & analytics solutions and commercialcontract sales and medical solutions:


Growth and innovation in the life sciences industry.The life sciences industry is a large and critical part of the global healthcare system and, according to the latest information available from the IQVIA Market Prognosis service, is estimated to have generated approximately $1.1$1.63 trillion in revenuerevenues in 2017. According to our research, revenue growth in the life sciences industry globally is expected to range from 3% to 6% between 2018 and 2022.2023. According to the IQVIA Institute, it is estimated that spending on pharmaceuticals in emerging markets will expand at a 6%5% to 9%8% compound annual growth rate (“CAGR”) through 2022.2028. The growth of emerging markets is making these geographies strategically importantdemonstrates their strategic importance to global life sciences organizations along with the emergence of local and consistentregional companies with their approach in the developed markets, wesimilar operational and informational needs. We expect all of these organizations to apply a high degree of sophistication to their commercial operations in these countries.countries, especially as some begin to emerge as sources of original innovative products. For global companies, this requires highly localized knowledge and information assets, the development of market access strategies and performance benchmarking. In addition, local players are learning that they need to compete on the basis of improved information and analytics.


6

Growth in Research and Development.Spending trends in research and development are impacted as a result of several factors, including major biopharmaceutical companies’ efforts to replenish revenues lost from the so-called “patent cliff,” increased access to capital by the small and midcap biotechnology industry, and recent increases in pharmaceutical approvals by regulatory authorities. The IQVIA Institute also estimates that approximately 225350 new molecular entities (“NMEs”) are expected to be approved between 20182024 and 2022,2028, or 70 per year compared to 208 between 2012 and 2016, and 149 between 2007 and 2011.61 per year on average during the past decade. We believe that further research and development spending, combined with the continued need for cost efficiency across the healthcare landscape, will continue to create opportunities for biopharmaceutical services companies, particularly those with a global reach and broad service offerings, to help biopharmaceutical companies with their pre- and post-launch solutions development and commercialization needs.

The impact of recent legislative changes on product launch and industry innovation continues to be evaluated. IQVIA is involved with many stakeholders throughout the industry as we help navigate changes over the coming decade.


Increased Complexity in Research and Development.Biopharmaceutical companies face environments in which it has become increasingly difficult to operate. Improved standards of care in many therapeutic areas and the emergence of new types of therapies, such as biologics, genetically targeted therapies, gene and stem cell therapies, and other treatment modalities have led to more complex development and regulatory pathways. For example, the United States and European countries have recently released guidelines for the development of “biosimilar” products. We believe that our global clinical development capabilities, including our expertise in biomarkers and genomics and our global laboratory network, position us well to help biopharmaceutical companies manage the complexities inherent in an environment where this type of expertise is important. For example, IQVIA Connected Intelligence helps us validate protocols to ensure studies in new disease areas have greater accuracy and also enables us, through innovations such as predictive analytics, to find patients who may not have been diagnosed.

7

Regulators require clinical trials involvingto involve local populations as part of the process for approving new pharmaceutical products, especially in certain Asian and emerging markets. Understanding the epidemiological and physiological differences in different ethnic populations and being able to conduct clinical trials locally in certain geographies will be important to pharmaceutical product growth strategies, both for multinational and local/regional biopharmaceutical companies. We believe that our global clinical development capabilities and unmatched presence in Asia and other emerging markets make us a strong partner for biopharmaceutical companies managing the complexities of international drug development.


Financial pressures driving the need for increased efficiency.Despite expected accelerating growth in the global life sciences market, we believe our clients will face increased operating margin pressure due to their changing product mix, pricing and reimbursement challenges, and rising costs of compliance. Product portfolios for life sciences companies have shifted toward specialty products with lower peak market sales potential than traditional primary care medicines. We believe that the need for biopharmaceutical companies to maximize productivity and lower costs across their processes from research and development through commercial operations will cause them to look to partners as they enter into outsourcing arrangements to improve efficiency. Further, our clients are looking for new ways to simplify processes and drive operational efficiencies by using automation, consolidating vendors and adopting new technology options such as hosted and cloud-based applications. This provides opportunities for technology services vendors to capture and consolidate the internal spending of life sciences companies by providing lower-cost and variable-cost options that lower clients’ research and development, selling, marketing and administrative costs.


Evolving need to integrate and structure expanding sources of data.Over the past decade, many health systems around the world have focused on digitizing medical records. While such records theoretically enhance access to data, relevant information is often unintegrated, unstructured, siloed in disparate software systems, or entered inconsistently. In addition, new sources of data from the internet, such as social media and information on limited patient pools, and information resulting from enhanced diagnostic technologies are creating new sources of healthcare data.


In order to derive valuable insights from existing and expanding sources of information, clients need access to statistically significant data sets organized into databases that can be queried and analyzed. For example, real-world evidence studies demonstrate practical and clinical efficacies, which we believe require the aggregation and integration of large clinical data sets across all care settings, types of therapies and patient cohorts. Longitudinal studies require analysis of non-identified patient diagnoses, treatments, procedures and laboratory test results to identify types of patients that will likely best respond to particular therapies. Finally, manufacturers also require the ability to analyze social media activity to identify unmet patient needs and support for new orphan drugs. This information is highly relevant to all healthcare stakeholders and we believe the opportunity to more broadly apply healthcare data can only be realized through structuring, organizing and integrating new and existing forms of data in conjunction with sophisticated analytics.


7

Need for demonstrated value in healthcare. Participants in the healthcare industry are focused on improving quality and reducing costs, both of which require assessment of quality and value of therapies and providers. As a result, physicians no longer make prescribing decisions in isolation, but rather in the context of guidance and rules from payers, integrated delivery networks and governments. We believe life sciences companies are working to bring alignment across constituents on the value of their treatments in order to successfully develop and commercialize new therapies.


There is increasing pressure on life sciences companies to support and justify the value of their therapies. Many new drugs that are being approved are more expensive than existing therapies and will likely receive heightened scrutiny by regulators and payers to determine whether the existing treatment options would be sufficient. Additionally, many new specialty drugs are molecular-based therapies and require a more detailed understanding of clinical factors and influencers that demonstrate therapeutic value. As a result, leading life sciences companies are utilizing more sophisticated outcome research and data analytics services.


We believe we are well positioned to take advantage of these global trends in healthcare. Beyond our proprietary information assets, we have developed key capabilities to assess opportunities to develop and commercialize therapies, support and defend the value of medicines and help our clients operate more efficiently through the application of insight-driven decision-making and cost-efficient technology solutions.

8

Our Growth Strategy


We believe we are well positioned for continued growth across the markets we serve. Our strategy for achieving growth includes:


Continue to innovate through our IQVIA Connected Intelligence by leveraging our information, advanced analytics, transformative technology and significant domain expertise. As a leader in the development and commercialization of new pharmaceutical therapies, we can empower our therapeutic, scientific and domain experts with expansive levels of information including product level tracking in 9094 markets and information about treatments and outcomes on more than 530 million1.2 billion unique non-identified patients. Further,patient records. By connecting this intelligence, we have the ability to optimize the clinical trial process and enable our clients to reduce costs and get their products to market more quickly by running their clinical trials more efficiently and effectively through more informed site selection, and faster patient recruitment practices.

practices and decentralized trials. We transform Real World Evidence by linking prospective and retrospective approaches and introduce innovation such as secondary control arms, which eliminate the need for a placebo group. We bring best in class Software as a Service ("SaaS") platforms, purpose built for life sciences, to our clients to help them run their clinical and commercial operations more efficiently.


Build upon our extensive client relationships and leverage our global presence. We have a diversified base of over 8,00010,000 clients in over 100 countries and have expanded our client value proposition to address a broader market for research and development and commercial operations which we estimate to be more than $230$330 billion in 2017.2023. Through the combined offerings of research and development and commercial services we built a platform that allows us to be a more complete partner to our clients.


Expand the penetration of our offerings to the broader healthcare marketplace. We believe that substantial opportunities exist to use our existing technology and domain expertise to serve additional healthcare stakeholders (payers, providers, healthcare professionals) to quantify and optimize cost of care delivery; provide registry technology to professional association and patient communities and support healthcare providers with system implementation and platform migration.

Expand portfolio through strategic acquisitions.We have and expect to continue to acquire assets and businesses that strengthen our value proposition to clients. We have developed an internal capability to source, evaluate and integrate acquisitions that have created value for stockholders. As the global healthcare landscape evolves, we expect that there will be a growing number of acquisition opportunities across the life sciences, payer and provider sectors. We expect to continue to invest in or explore opportunities for strategic acquisitions to grow our platform and enhance our ability to provide more services to our clients.

Expand the penetration of our offerings to the broader healthcare marketplace. We believe that substantial opportunities exist to expand penetration of our market and further integrate our offerings in a broader cross-section of the healthcare marketplace, particularly connected healthcare.


Our Offerings


We offer hundreds of distinct services, applications, technology platforms and solutions to help our clients make critical decisions and perform better. We have three operatingreportable segments: CommercialTechnology & Analytics Solutions, Research & Development Solutions and Integrated Engagement Services.Contract Sales & Medical Solutions. Their offerings complement each other and can provide enhanced value to our clients when delivered together, with each driving demand for the other.

For financial information regarding our segments, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations-Segment Results of Operations and Note 22 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Please refer to Note 21 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details regarding our foreign and domestic operations in 2017, 2016 and 2015. For a discussion of risks attendant to our foreign operations, see “Risk Factors —


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Our business is subject to international economic, political and other risks that could negatively affect our results of operations and financial condition.”

Our CommercialTechnology & Analytics Solutions offerings include:


Technology solutionsplatforms.We provide an extensive range of cloud-based applications and associated implementation services. Software as a Service (“SaaS”)SaaS solutions that support a wide range of clinicalcommercial and commercialclinical processes, including clinical trial design and planning, site start-up, patient consent, site payments, content management, multi-channel marketing, customer relationship management (“CRM”), performance management, real-world evidence generation, compliance and safety reporting, incentive compensation, territory alignment, roster management, call planning, compliance reportingmulti-channel marketing, and master data management. These solutions are used by healthcare companies to manage, optimize and execute their clinical and commercial strategies in an orchestrated manner while addressing their regulatory obligations. Using proprietary algorithms, we combine our country-level data, healthcare expertise and therapeutic knowledge in over 100 countries to create our Global Market Insight family of offerings such as MIDAS, Analytics Link and Disease Insights, which provides a leading source of insight into international market dynamics and are used by most large pharmaceutical companies.

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Real-World Insights

Real World Solutions.We enable clientslife sciences and provider customers to generate and disseminate evidence in a cost-efficient manner which informs health care decision making and ultimately improves patients’ outcomes. Our use non-identified patient-level data to understand treatments, outcomes, and costs to inform and advance healthcare decision making. With patientof a wide range of privacy and security safeguards we offer data assets that integrateprotect non-identified patient-level medical claims, prescriptions, electronic medical records, biomarkersgenomics, patient reported outcome and government statisticssocial media data. Our scaled information networks include more than 1.2 billion unique non-identified patient records globally, as neededwell as access to profiles of over 3,400 real world data assets in more than 100 countries uniquely facilitating data discoverability for healthcare research requirements.via the IQVIA Health Data Catalog. We technology-enable these data flows by harmonizing them to common data models and loading them onto our proprietary evidence platforms for secure access by our customers. We provide access to deep clinical data in Oncology, Rare Disease, and other specialty areas. Our proprietary technologies and advanced analytic skills enableNatural Language Processing capabilities help us tocreate structured data from unstructured clinical notes. We help payer, government,our global customers across payers, providers, governments, and biopharmaceutical clients manage and use this informationcompanies to understand theanswer critical questions about healthcare interventions related to safety, effectiveness, and economic efficiency of drugsvalue. We also bring together stakeholders across healthcare to collaborate in real-world use.

Workflow analyticsefforts to develop new information sources, more effective reimbursement models, and better patient outcomes.


Analytics and consulting services.We provide a broad set of strategic and implementation consulting services, including advanced analytics and commercial processes outsourcing services to help the commercial operations of life sciences companies successfully transform their commercial models, engage more effectively with the healthcare stakeholders and reduce their operating costs. We also help our client’s R&Dresearch and development function to address strategic challenges in the drug development process. Our global teams leverage local market knowledge, deep scientific and therapeutic area expertise and our global information resources to assist our clients with R&Dresearch and development strategy, portfolio, brand and commercial strategy, as well as pricing and market access and launch excellence.

National information offerings.


Information offerings. Our national offerings comprise unique services in 90over 100 countries that provide consistent country level performance metrics related to sales of pharmaceutical products, prescribing trends, medical treatment and promotional activity across multiple channels including retail, hospital and mail order. These solutions are an integral part of critical processes in life science companies around the world and are also used extensively by the investment and financial sectors that deal with life science companies.

Sub-national information offerings.Our sub-national offerings comprise unique services in more thanover 70 countries that provide a consistent measurement of sales or prescribing activity at the regional, zip code and individual prescriber level (depending on regulation in the relevant country). These solutions are used extensively, with a majority of pharmaceutical sales organizations within these countries dependent on these services to set goals, determine resourcing, measure performance and calculate compensation.

Reference information offerings.Our widely used reference database that tracks more than 15over 25 million healthcare professionals in approximatelyover 100 countries, providing a comprehensive view of health care practitioners that is critical for the commercial success of our clients’ marketing and sales initiatives.


Our Research & Development Solutions (“RDS”) offerings include:


Project Management and Clinical Monitoring.Drawing upon our years of experience, our site databases, our site relationships and our highly trained staff, Clinical Solutions & Servicesour solutions and services enables the efficient conduct and coordination of multi-site clinical trials (generally Phase II-IV). Clinical Solutions & Services’Our service offerings include protocol design, feasibility and operational planning, site start up, patient recruitment and patient recruitment.

clinical site monitoring. By infusing technology into field-based monitoring, we are able to reduce data collection steps and time.


Clinical Trial Support Services.Each clinical trial requires a number of concurrent services and data streams. We offer a broad range of functional services and consultation to support clinical trials through specialized expertise that help clients efficiently collect, analyze and report the quality data and evidence they need to gain regulatory approval.

Q2 Solutions.


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Laboratory Services. We provide our clients globally scaled end-to-end clinical trial laboratory and research services through our majority-owned joint venture with Quest Diagnostics Incorporated (“Quest”) which was formed on July 1, 2015. We offerservices. Our offerings include the full range of central laboratory, genomic, bioanalytical, ADME, discovery, vaccine and bioanalyticalbiomarker laboratory services supporting clinical trials offerings within the joint venture, which is referred to as Q2 Solutions.

along with sample and consent tracking services.

Strategic Planning and Design. ThroughBy bringing our data science capabilities to our strategic planning and design services, we offer consultation services to improve decisions and performance including portfolio, program and protocol planning and design, biomarker consultation, benefit-risk management, regulatory affairs, biostatistics, modeling and simulation, and personalized medicine.

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Patient and Site Centric Solutions. A comprehensive suite of technology and site support services which create custom strategies to engage and retain patients. Included is our site management organization Avacare Clinical Research Network, which orchestrates the activities of over 200 investigators and extends solutions to patients across more than 20 therapeutic indications in nearly 50 locations. Additionally, our decentralized approaches and technologies support sites and sponsors through direct-to-patient recruitment, remote nursing, data entry, and study coordinator resources. Our principal Integrated Engagement Services (“IES”)solutions reduce study burden and foster a supportive, patient-centric journey.

Our Contract Sales & Medical Solutions offerings include:


Health Care Provider Engagement Services.We partner with biopharmaceutical companies and other life sciences providers (e.g., medical device companies) to develop and deploy tailored stakeholder engagement solutions, including contract sales and market access professionals, which are focused on product sales and improving brand value at all stages of the product lifecycle from initial market entry to brands nearing patent expiry.


Patient Engagement Services.Our nurse-based programs directly engage with patients to help improve their disease and medication understanding through interventional and non-interventional support, while also providing assistance in navigating complex reimbursement coverage issues. Our patient engagement services combine insight from clinical trials and social listening, behavioral design, personal and innovative eHealth multichannel interactions across multiple sites (e.g., the physician’s office, hospital, pharmacy, home), that act as an extension of the Health Care Provider prescribed treatment course which can lead to improved adherence and better overall outcomes.


Medical Affairs Services.We provide a range of scientific strategy and medical affairs services to help biopharmaceutical companies plan and transition from the clinical trial setting to commercialization. Beginning in the clinical trial stage, our services can deploy educators to clinical trial sites to accelerate patient recruitment and improve retention, assist in translation of complex clinical trial data into a compelling scientific platform and publication strategy, and, provide field medical teams to facilitate scientific engagement with key opinion leaders and healthcare decision makers, before and after product approval.


Our Clients


Sales to companies in life sciences, including pharmaceutical companies, biotechnology companies, device and diagnostic companies, and consumer health companies, accountedaccount for the majority of our revenues. Nearly all of the top 100 global pharmaceutical and biotechnology companies, measured by revenue,revenues, are clients, and many of these companies subscribe to reports and services in many countries. Other clients include payers, government and regulatory agencies, providers, pharmaceutical distributors, and pharmacies. Our client base is broad in scope and enables us to avoid dependence on any single client. No single client accounted for 10% or more of our combined companytotal Company revenues in 2017, 20162023, 2022 or 2015.

2021. For the year ended December 31, 2023 the largest client based on its percentage of total Company revenues contributed approximately 5%.


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Our Competition


Our CommercialTechnology & Analytics Solutions business competes with a broad and diverse set of businesses. While we believe no competitor provides the combination of geographical reach and breadth of itsour services, we generally compete in the countries in which we operate with other information, analytics, technology, services and consulting companies, as well as with the in-house capabilities of our clients. Also, we compete with certain government agencies, private payers and other healthcare stakeholders that provide their data directly to others. In addition to country-by-country competition, we have a number of regional and global competitors in the marketplace as well. Our offerings compete with various firms, including Accenture, Aetion, Panalgo (a Norstella company), Cognizant Technology Solutions, Covance,Fortrea, Deloitte, Evidera, GfK, LexisNexis Risk Solutions,Pharmaceutical Product Development, Inc. (now part of Thermo Fisher Scientific Inc.), Relx, IBM, Infosys, Kantar Health,Cerner (an Oracle company), McKinsey, Nielsen, OptumInsight,NielsenIQ, Optum Insight, Parexel International Corporation, Press Ganey, RTI Health Solutions, Symphony Health Solutions, SynovateICON plc, Definitive Healthcare, The Advisory Board, Trizetto,Cegedim, Tempus, Merative, CompuGroup Medical, Medidata, Clarivate, Veeva, Verisk, and ZS Associates. We also compete with a broad range of new entrants and start-ups that are looking to bring new technologies and business models to healthcare information services and technology services.


The markets for Research & Development Solutions offerings are highly competitive, and we compete against traditional contractclinical research organizations (“CROs”), the in-house research and development departments of biopharmaceutical companies, universities, and teaching hospitals. Among the traditional CROs, there are several-hundred small, limited-service providers, several medium-sized firms and only a few full-service companies with global capabilities. Our primary competitors include Covance Inc. (the drug development business of Laboratory Corporation of America Holdings), ICON plc, PAREXELParexel International Corporation, Pharmaceutical Product Development, Inc., PRA International, and Syneos Health, and Fortrea, among others.


Our Integrated Engagement ServicesContract Sales & Medical Solutions business competes against the in-house sales and marketing departments of biopharmaceutical companies, other contract pharmaceutical sales and service organizations and consulting firms. Integrated Engagement Services’Contract Sales & Medical Solutions’ primary competitorcompetitors in the United States isare Syneos Health.Health, Amplity Health, Eversana and Inizio. Outside of the United States, Integrated Engagement ServicesContract Sales & Medical Solutions typically competes against single country or more regionally focused service providers, such as United Drug plc,Inizio, Syneos Health, Publicis, EPS Corporation, Uniphar, and CMIC HOLDINGS Co., Ltd.

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Sustainability

We are committed to sustainable environmental, social and governance ("ESG") practices that further our corporate purpose of accelerating innovation for a healthier world. Our sustainable business practices are organized under three pillars — People, Public and Planet. For further information on our ESG program, achievements, and goals, see our 2023 Environmental, Social, and Governance Report (the "2023 ESG Report"), which will be available on our website at https://www.iqvia.com/about-us/corporate-responsibility. Information in the 2023 ESG Report is not incorporated by reference in, and does not form part of, this Annual Report on Form 10-K. To facilitate the disclosure of comparable, consistent, and reliable ESG information, the 2023 ESG Report will be aligned with the Sustainability Accounting Standards Board ("SASB") and the Global Reporting Initiative ("GRI") reporting frameworks by including therein and reporting against their respective reporting standards indexes. The 2023 ESG Report also discusses our climate-related risks and opportunities in accordance with the recommended disclosures of the Task Force on Climate-related Financial Disclosures ("TCFD").

Government Regulation


Many aspects of our businesses are regulated by federal and state laws, rules and regulations. Accordingly, we maintain a robust compliance program aimed at ensuring we operate our business in compliance with all existing legal requirements material to the operation of our businesses. There are, however, occasionally uncertainties involving the application of various legal requirements, the violation of which could result in, among other things, fines or other sanctions. See “Part I—Part I, Item 1A—Risk1A, "Risk Factors” for additional detail.


Good Clinical Practice


Good Clinical Practice (“GCP”) regulations and guidelines are the industry standard for the conduct of clinical trials with respect to maintaining the integrity of the data and safety of the research subjects. The United States Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”), Japan’s Ministry of Health, LabourLabor and Welfare and most other global regulatory authorities expect that study results and data submitted to such authorities be based on clinical trials conducted in accordance with GCP provisions. Records for clinical trials must be maintained for specified periods for inspection by the FDA and other regulators.


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Regulation of Drugs, Biologics and Medical Devices


In the United States, pharmaceutical, biological and medical device products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act (“FDC Act”)(FDC Act), the Public Health Service Act (“PHS Act”)(PHS Act), and other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical, biological and medical device products. Failure to comply with applicable United States requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve a pending new drug application (“NDA”)(NDA) for a new drug, a biologics license application (“BLA”)(BLA) for a new biological product, pre-market approval (“PMA”)(PMA) or clearance for a new medical device, warning or untitled letters, clinical holds, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.


Regulation of Patient Information


Our information management services relate to the processing of information regarding patient diagnosis and treatment of disease and are, therefore, subject to substantial governmental regulation. In addition, the confidentiality of patient-specific information and the circumstances under which such patient-specific records may be released for inclusion in our databases or used in other aspects of our business is heavily regulated. Federal, state and foreign governments are contemplating or have proposed or adopted additional legislation governing the possession, use and dissemination of personal data, such as personal health information and personal financial data, as well as security breach notification rules for loss or theft of such data. Additional legislation or regulation of this type might, among other things, require us to implement additional security measures and processes or bring within the legislation or regulation de-identified health or other data, each of which may require substantial expenditures or limit our ability to offer some of our services.


In particular, personal health information is recognized in many countries such as the United States, the European Union, or EU, and several countries in Asia, as a special, sensitive category of personal information, subject to additional mandatory protections. Violations of data protection regulations are subject to administrative penalties, civil money penalties and criminal prosecution, including corporate fines and personal liability.


Regulation of Promotion, Marketing and Distribution of Pharmaceutical Products and Medical Devices


Certain of our services are subject to detailed and comprehensive regulation in each geographic market in which we operate. Such regulation relates, among other things, to the distribution of drug samples, the marketing and promotion of approved products, the qualifications of sales representatives and the use of healthcare professionals in sales functions.

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In the United States, certain of our services are subject to numerous federal and state laws pertaining to promotional activities involving pharmaceutical products and medical devices. Certain of our services are subject to the FDA’s regulations against “off-label promotion,” which require sales representatives to restrict promotion of the approved product they are detailing to the approved labeling for the product. The Prescription Drug Marketing Act imposes licensing, personnel record keeping, packaging, labeling, product handling and facility storage and security requirements. Other federal and state laws prohibit manufacturers, suppliers and providers from offering, giving or receiving kickbacks or other remuneration in connection with ordering or recommending the purchase or rental of healthcare items and services. The sale or distribution of pharmaceutical products and devices is also governed by the United States Federal Trade Commission Act and state consumer protection laws. We are subject to similar regulations currently in effect in the other countries where we offer Integrated Engagement Services.

Contract Sales & Medical Solutions.


We are also subject to various laws and regulations that may apply to certain drug and device promotional practices, including, among others, various aspects of Medicare and federal healthcare programs. Violations of these laws and regulations may result in criminal and/or civil penalties, including possibly as an “aider and abettor.”


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Regulation of Laboratories


Our United States “central” laboratories are subject to licensing and regulation under federal, state and local laws relating to hazard communication and employee right-to-know regulations, and the safety and health of laboratory employees. Additionally, our United States laboratories are subject to applicable federal and state laws and regulations and licensing requirements relating to the handling, storage and disposal of hazardous waste, radioactive materials and laboratory specimens, including the regulations of the Environmental Protection Agency, the Nuclear Regulatory Commission, the Department of Transportation, the National Fire Protection Agency and the United States Drug Enforcement Administration (“DEA”). The use of controlled substances in testing for drugs with a potential for abuse is regulated in the United States by the DEA and by similar regulatory bodies in other parts of the world. Our United States laboratories using controlled substances for testing purposes are licensed by the DEA. The regulations of the United States Department of Transportation, Public Health Service and Postal Service apply to the surface and air transportation of laboratory specimens. Our laboratories also are subject to International Air Transport Association regulations, which govern international shipments of laboratory specimens. Furthermore, when the materials are sent to a foreign country, the transportation of such materials becomes subject to the laws, rules and regulations of such foreign country. Our laboratories outside the United States are subject to applicable national laws governing matters such as licensing, the handling and disposal of medical specimens, genetic material, hazardous waste and radioactive materials, as well as the health and safety of laboratory employees.


In addition to its comprehensive regulation of safety in the workplace, the United States Occupational Safety and Health Administration has established extensive requirements relating to workplace safety for healthcare employers whose workers may be exposed to blood-borne pathogens such as HIV and the hepatitis B virus. Although we believe that we are currently in compliance in all material respects with such federal, state and local laws, failure to comply with such laws could subject us to denial of the right to conduct business, fines, criminal penalties and other enforcement actions.


Further, laboratories that analyze human blood or other biological samples for the diagnosis and treatment of clinical trial subjects must comply with Clinical Laboratory Improvement Amendments (“CLIA”), as well as requirements established by various states. The failure to meet these requirements may result in civil penalties and suspension or revocation of the CLIA certification.


Data Privacy

Patient health information is among the most sensitive of personal information, and it is critically important that information about an individual’s healthcare is properly protected from inappropriate access, use and disclosure. Real world evidence -- information that allows us to examine actual practices and outcomes -- is essential to increase access to care, improve outcomes, and lower costs. IQVIA uses a wide variety of privacy-enhancing technologies and safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. We employ a wide variety of methods to manage privacy requirements, including:

•governance, frameworks, models and training to promote good decision making and accountability;
•a layered approach to privacy and security management to avoid a single point of failure;
•ongoing evaluation of privacy and security practices to promote continuous improvement;
•use of technical, administrative, physical and organizational safeguards and controls;
•collaboration with data suppliers and trusted third parties for our syndicated market research and analytics offerings to remove identifiable information or employ effective encryption or other techniques to render information non-identified before data is delivered to us; and
•work with leading researchers, policy makers, thought leaders and others in a variety of fields relevant to the application of effective privacy and security practices, including statistical, epidemiological and cryptographic sciences, legal, information security and compliance, and privacy.

We are an industry leader in de-identifying data. Our capabilities allow us to render data non-identified while still maintaining data utility, thus protecting privacy while still advancing innovation. Not only do we make use of de-identification techniques with respect to the data we hold, but we also share our expertise in this area with policymakers, regulators and others to help them understand de-identification methodologies and practical considerations to avoid re-identification risk.

We operate in more than 100 countries around the world, many of which have data protection and privacy laws and regulations based on similar core principles (e.g., openness, accountability, security safeguards, etc.). We apply those principles globally and augment our practices to address local laws, contractual obligations and other data privacy requirements.
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Our Global Privacy team, led by our Global Chief Privacy Officer, is comprised of privacy professionals and privacy law experts who drive our strategy and develop and manage our policies and standards. The Global Privacy team provides subject matter expertise related to the proper management of all data types. In addition, our Global Privacy team liaises with our Legal, IT, Information Security and other teams so that privacy requirements are addressed in technology development, contracting, offerings and other business activities.

The IQVIA Privacy Policy (the "Privacy Policy") is our foundational privacy policy. It explains how, when applicable, we collect, hold, use and disclose personal information, including that of our personnel, consumers, healthcare professionals, patients, medical research subjects, clinical investigators, customers, suppliers, vendors, business partners and investors. You can find the Privacy Policy on our website at https://www.iqvia.com/about-us/privacy/privacy-policy. Information in the Privacy Policy is not incorporated by reference in, and does not form part of, this Annual Report on Form 10-K.

Our Intellectual Property


In addition to our proprietary data sets described above, we develop and use a number of proprietary methodologies, analytics, systems, technologies and other intellectual property in the conduct of our business. We rely upon a combination of legal, technical, and administrative safeguards to protect our proprietary and confidential information and trade secrets, and patent, copyright and trademark laws to protect other intellectual property rights. We consider our trademark and related names, marks and logos to be of material importance to our business, and we have registered or applied for registration for certain of these trademarks, including IQVIA, QuintilesIMS, Quintiles, IMS Health and IMS, in the United States and other jurisdictions and aggressively seek to protect them. Trademarks and service marks generally may be renewed indefinitely so long as they are in use and/or their registrations are properly maintained, and so long as they have not been found to have become generic. The technology and other intellectual property rights owned and licensed by us are of importance to our business, although our management believes that our business, as a whole, is not dependent upon any one intellectual property or group of such properties.


Human Capital

Overview. Our Employees

Asapproximately 87,000 employees help us drive our business success and achieve our ambition to advance human health. We are a diverse global team that shares a passion for collaboration and solving complex problems. Our workforce is comprised of December 31, 2017, we have more than 55,000 employees worldwide. Almost alla wide variety of theseprofessionals, including clinicians, data scientists, epidemiologists and more.


Our culture is one in which employees are full-time. Noneencouraged to apply their insight, curiosity, and intellectual courage across everything they do. The way we manage our people and the programs we offer our employees reflect our commitment to fostering this culture of empowerment and engagement.

Each one of our employees provides value, no matter where they sit within the organization. We are coveredcommitted to creating an environment where all employees are respected and heard, where talented people from all backgrounds can contribute to and share in our growth, and where opportunity is available to everyone.

Attracting, developing, and retaining a talented workforce is essential to the success of our business and the realization of our purpose. Investments in our people are motivated by our desire to have an engaged and connected workforce. This results in high productivity and better results for IQVIA. In an industry as competitive as ours, we also recognize that employees who feel supported contribute to higher retention and recruitment rates.

Board Oversight of Human Capital Management. Our Board of Directors (our "Board") receives periodic updates on key human capital metrics, including recruitment and attrition rates, talent development data, and diversity statistics related to hiring, promotion and our overall workforce.

Our Board also devotes significant time to leadership development and succession planning at the executive level and provides guidance on important decisions in each of these areas. The Leadership Development and Compensation Committee of the Board has primary responsibility for succession planning for the chief executive officer and oversight of succession planning for senior leadership.

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Human Capital Management Strategy. Our employees are critical to our continued success and are a collective bargaining agreementcore element of our long-term strategy. Senior management is responsible for ensuring that our initiatives, policies, and processes reflect and reinforce our desired corporate culture, which we believe supports successful human capital management. Our human capital management strategy is built on three fundamental focus areas:

•Recruitment. We consider a range of qualified candidates for all positions. We hire qualified individuals with a variety of backgrounds and experiences from both within and outside the organization for positions at all levels.

•Development & Progression. We are committed to having a diverse pipeline of talent moving up in our organization and providing opportunities for all employees to develop within their current role as well as towards their next role. We do this by encouraging mentoring and establishing support networks as well as by providing programs and tools to help employees achieve their career goals.

•Retention. We seek to develop a working environment where employees feel supported and want to stay. To increase employee engagement and retention, we consistently seek input from employees through surveys and focus groups and develop meaningful initiatives and programs to respond to their feedback.

Employee Engagement. In 2023, we completed two Company-wide employee surveys. The surveys provided a valuable opportunity to hear the perspectives of our workforce around the world. Maintaining regular and open channels of dialogue with employees and receiving and responding to their feedback with actionable and meaningful initiatives is critical to our human capital management strategy.

We received an average of 71,000 responses across our surveys in 2023, with an average participant rate of approximately 84%. Across our surveys, on average 80% of respondents say they feel engaged. The employee engagement index has been stable across our surveys in 2023. Three items saw significant improvement in 2023 as compared to 2022: The number of employees indicating they can see a clear link between their work and IQVIA's vision to drive healthcare forward increased 5 points in 2023 to 87% compared with the prior year, the number of employees indicating their manager supports their efforts to balance their work and personal life increased 2 points in 2023 to 86% compared with the prior year, and the number of employees indicating they are energized by their work increased 2 points in 2023 to 71% compared with the prior year.

Diversity and Inclusion. Our commitment to diversity and inclusion ("D&I") is reflected in the various policies, programs, training and support we offer, including our Employee Resource Groups ("ERGs"), manager diversity and inclusion training and our highly diverse global workforce. This is a foundation of our approach to human capital. We create this culture for employees regardless of gender, race, color, creed, religion, marital status, age, national origin or are represented by a labor union. Employeesancestry, physical or mental disability, medical condition, veteran status, citizenship, sexual orientation, gender identity or any other protected group status.

Our global workforce operates in certain locations outside ofover 100 countries and represents approximately 90 different ethnicities. In the United States, approximately 61% of our employees identify as white and approximately 39% identify as a minority, including 12% who identify as Black or African American. Approximately 61% of our employees globally identify as female and approximately 52% of employees worldwide at a manager level identify as female.

Our growing network of ERGs provides a framework for employees to connect and collaborate with colleagues with similar interests. These groups support our values and business goals and foster the diverse thinking required for innovation. They provide a forum for the exchange of ideas and opportunities for mentoring and professional development.

There are representedeight global ERGs and all are employee-led, voluntary, and open to every employee. Each ERG has a mission that is aligned to our vision, values, and core operating principles.

•Black Leadership Network (BLN) aims to maintain an inclusive community that supports professional development, knowledge sharing, collaboration, and business success for Black employees.

•Disabilities and Carers Network (DCN) builds awareness and appreciation around the accomplishments and challenges of the disabled community, to foster inclusion, engagement, and professional development.

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•Emerging Professionals Network (EPN) builds community among leaders and emerging professionals through networking, personal development and volunteerism.

•Multi-Faith Network (MFN) fosters a culture of openness and diversity and provides a place where IQVIA employees can connect with people of different faiths or for mutual support.

•LGBTQIA+ Group (PRIDE) supports the ability for all people at IQVIA to be their authentic selves by works councilsfostering an inclusive, equal, and inspiring culture for LGBTQIA+ employees.

•Race, Ethnicity and Cultural Heritage Group (REACH) aims to create a supportive and collaborative community for IQVIA employees who represent racial, ethnic and cultural minorities across the globe.

•Veterans Employee Resource Group (VERG) connects active duty and transitioning service members and veterans at IQVIA while advocating for and supporting active duty and veteran causes that align with IQVIA's core values.

•Women Inspired Network (WIN) fosters a corporate culture that inspires women to excel in their careers at IQVIA and within the biopharma industry.

In 2023, we grew our ERG membership to more than 11,700 participants worldwide, an increase in membership of over 100% from the past year, which spans 73 countries across the globe.

Employee Well-being. Investing in resources and incentives to promote the personal well-being of our employees and their families is an important way we take care of our people.

We provide a variety of health and welfare benefit plans that are available to employees and their family members, based on their location and specific country regulations. Plans may include medical, dental, and vision coverage; telemedicine and on-site medical care; critical illness coverage; disability, accidental death and dismemberment, pet and life insurance; tuition reimbursement; identity theft protection; commuter benefits; matching gift programs; and locally relevant savings and retirement plans such as pensions and 401(k) plans.

We provide parental leave for all full-time employees for the birth or adoption of a child, with variability in leave time dependent on location. We also provide paid leave for other life matters including sick time, bereavement, jury duty, military service, and time off for voting, depending on country specific policies.

Beyond health and welfare benefits, many regions also offer employee well-being programs. In the United States, our “Healthy You” wellness program offers employees a range of wellness benefits, including free flu shots, teledoc services, nutrition counseling, tobacco cessation support and reimbursement for wellness-related expenses.

Our Employee Assistance Program ("EAP") is available to 100% of our workforce worldwide. Our EAP offers counseling services, alongside accessible training and webinars focused on a variety of topics including financial planning, nutrition, social connections, stress management, time management and work-life balance. We aim to create a work culture that provides flexibility, autonomy, and recognition, and supports personal and organizational growth.

Compensation and Benefits. IQVIA compensation programs support our overall strategy by linking employee compensation with both business and personal performance. This approach to compensation demonstrates our “pay for performance” philosophy, as well as our focus on providing compensation programs that attract, retain and motivate and reward employees. In addition to the benefits described above, our compensation programs include base salaries, annual bonuses, and long-term incentive awards.

Talent and Learning. Helping our people grow, develop, and reach their full potential is a key component of our human capital management strategy. Nurturing talent is critical in a highly competitive industry, and it also keeps our employees motivated and engaged.

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We invest in our employees’ development throughout their careers at IQVIA through our various talent and learning initiatives. Our strategy is focused on supporting business growth, optimizing our offerings through enhanced digital tools, and building the future leaders of IQVIA. At the same time, we are transforming the employee experience and have evolved our performance management approach to be more responsive to our employees’ experiences. Mirroring our overall culture, our approach to talent and learning is underpinned by the philosophy of empowerment, and we encourage all employees to take ownership of their careers.

In 2023, we worked closely with our employees to launch One IQVIA Multiple Careers, an initiative to facilitate upskilling and internal movement in line with IQVIA’s growth strategy and our employees career aspirations. Employees are empowered to shape their careers through extensive resources and tools, aligning with their aspirations, interests, and opportunities. Additionally in 2023, we launched the IQVIA Learning Academy, which helps inform employees about in-demand skills within IQVIA, providing transparency about the talent and expertise needed to meet future growth objectives. The academy defines and delivers learning pathways for employees of all levels to build those skills and democratizes access to enable all employees to explore future opportunities. Since launching in May 2023, there have been over 230,000 visits to the academy.

We offer a suite of formal and informal learning opportunities, many which focus on business specific topics such as regulatory compliance, technology, analytics, clinical and therapy areas, and more. Our digital Talent and Learning Hub gives employees access to training resources on a large variety of future skills. There were more than 1 million visits worldwide to our Talent and Learning Hub in 2023. The ease of access to training resulted in the completion of over 1.7 million e-learning programs in various subjects, including technology, client-facing skills and project management skills.

We want our employees to have meaningful careers, and we are committed to the idea that career development is a result of growth through new experiences. To foster this growth, we engage employees on their purpose, strengths, and agility. We encourage employees to remain curious and flexible towards their career, exploring opportunities across the organization. Employees take ownership for their development in partnership with managers, mentors, and others. Similarly, performance management is driven by ongoing conversations about priorities, contributions and development.

In 2020, we introduced our Future Leaders Program, a robust training aimed to develop the next generation of leadership at IQVIA. In 2023, 46 senior leaders from 15 countries participated in the four-month program, bringing the total number of participants since inception to 277. Sessions consisted of live webinars co-led by senior executives, peer coaching, business projects and skills assessments. Feedback continues to be positive with the program being rated highly by participants, scoring an average of 4.6 out of 5.

In 2021, we piloted our Emerging Leaders Program, which is specifically designed for high-potential employees at the managerial level and offers comprehensive training to shape our future leaders. In 2023, a total of 254 employees from 34 countries dedicated 7,979 hours of training taught by business leaders and subject matter experts from across the organization, covering topics such as agility, collaboration, executive presence and decision making. In addition, participants received peer coaching, 360-degree assessments and individual development plans.

In 2022, we launched the Leader of the Future Portal (LOFT) to help our managers shift their mindsets to the hybrid work environment. The solution allows managers to find learning courses, short videos, live trainings and quick reads from easy-to-navigate categories focused on being a remote leader, maintaining productivity virtually and leading hybrid teams. In 2023, the portal had 34,000 visits and completed 19,973 hours of training.

In 2023, we launched our New Manager program to support employees who are new to managing people and those who are experienced managers but new to IQVIA. The program is a guided learning path that helps managers navigate the available resources and prioritize the most relevant tools during the managers’ first 12 months. Since the June launch, there were 4,300 visits.

Health and Safety. Ensuring the health and safety of our employees is essential, whether they work in our corporate offices or labs. We strive to create a culture of safety so our employees can remain healthy and productive.

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We incorporate environmental laws and regulations into our policies and procedures throughout our organization. At the corporate level, we have group certifications to ISO 14001:2015 and ISO 45001:2018. In accordance with both certifications, we have a robust, integrated Environmental, Health and Safety Management System ("EHSMS") with supporting standard operating procedures in place, which demonstrates our commitment to continuous improvement. Under our EHSMS, all employees must actively participate in helping to maintain a safe, healthy, and secure work environment. Our Code of Conduct describes the obligations of employees to maintain such an environment, follow all applicable safety and security rules and complete required by local laws.training.

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IQVIA operates laboratories in the United States, United Kingdom, South Africa, Singapore, India, Japan, and China. Certain IQVIA laboratories are certified to ISO 14001:2015 and ISO 45001:2018. Depending on the location and services provided accreditation also will include ANVISA, CAP ISO 15189, CDC Lipids, CLIA, ISO 9001, MOH Certified Laboratory, and NSGP Level 1.

Available Information


Our website address is www.iqvia.com, and our investor relations website is located at http://ir.iqvia.com. Information on our website is not incorporated by reference herein. Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and our Proxy Statementsproxy statements for our annual meetings of stockholders, and any amendments to those reports, as well as Section 16 reports filed by our insiders, are available free of charge on our website as soon as reasonably practicable after we file the reports with, or furnish the reports to, the Securities and Exchange Commission (“SEC”). Our SEC filings are also available for reading and copying at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Information on the SEC’sSEC's website does not constitute part of this report.Annual Report on Form 10-K. Also posted on our website are our certificate of incorporation and by-laws, the charters for our Audit Committee, Leadership Development and Compensation Committee and Nominating and Governance Committee, our Corporate Governance Guidelines, and our Code of Conduct governing our directors, officers and employees. Copies of our SEC reports and corporate governance information are available in print upon the request of any stockholder to our Investor Relations Department.Department at IQVIA Holdings Inc., 1725 Route 46 East, Parsippany, New Jersey 07054. Within the time period required by the SEC and the New York Stock Exchange (“NYSE”), we will post on our website any amendment to the Code of Business Conduct or the Code of Ethics for Chief Executive Officer and Senior Financial Officers or any waiver of either such policy applicable to any of our senior financial officers, executive officers or directors.


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Item 1A. Risk Factors


RISK FACTORS


We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. You should consider carefully the risks and uncertainties described below together with the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K, in evaluating our company.Company. The occurrence of any of the following risks may materially and adversely affect our business, financial condition, results of operations and future prospects.


Summary of Risk Factors

Below is a summary of some of the principal risks that could adversely affect our business, operations and financial results:

Risks Relating to Our Business

•The potential loss or delay of contracts could adversely affect our results.
•Our financial results may be adversely affected if we underprice our contracts, overrun our cost estimates or fail to receive approval for or experience delays in documenting change orders.
•Failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and harm our operating results.
•If we are unsuccessful at investing in growth opportunities and are unable to develop and market new services or enter new markets, our growth, results of operations or financial condition could be adversely affected.
•If we are unable to successfully identify, acquire and integrate existing businesses, services and technologies, our business, results of operations and financial condition could be adversely impacted.
•If we are unable to attract suitable investigators and patients for our clinical trials, our clinical development business might suffer.
•If we lose the services of key personnel or are unable to recruit additional qualified personnel, our business could be adversely affected.

Intellectual Property
•We depend on third parties for data and support services. Our suppliers or providers might restrict our use of or refuse to license data or provide services, which could lead to our inability to access certain data or provide certain services and, as a result, materially and adversely affect our operating results and financial condition.
•Our success depends on our ability to protect our intellectual property rights.
•We may be subject to claims by others that we are infringing on their intellectual property rights.
•We rely on licenses from third parties to certain technology and intellectual property rights for some of our services and the licenses we currently have could terminate or expire.

IT systems and Information
•Security breaches and unauthorized use of our IT systems and information could expose us, our clients, our data suppliers or others to risk of loss.
•We may experience challenges with the acquisition, development, enhancement or deployment of technology necessary for our business.
•Data protection, privacy and similar laws restrict access, use and disclosure of personal information, and failure to comply with these laws could materially harm our business.

Client Risks
•Consolidation in the industries in which our clients operate may reduce the volume of services purchased by consolidated clients following an acquisition or merger.
•We may be adversely affected by client or therapeutic concentration.
•Our relationships with existing or potential clients who are in competition with each other may adversely impact the degree to which other clients or potential clients use our services.
•There is a risk that we may initiate a clinical trial for a client, and then the client becomes unwilling or unable to fund the completion of the clinical trial, and we may be ethically bound to complete or wind down the clinical trial at our own expense.
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Market Forces
•Disruptions in the credit and capital markets and unfavorable general economic conditions could negatively affect our business, results of operations and financial condition.
•Our effective income tax rate may fluctuate for a variety of reasons.
•Due to the global nature of our business we are subject to international economic, political and other risks that could negatively affect our results of operations and financial condition.
•Climate change may have an impact on our business.

Liability Exposure
•Our Research & Development Solutions business could subject us to potential liability.
•Our Contract Sales & Medical Solutions business could result in liability to us if a drug causes harm to a patient.
•Our insurance may not cover all of our indemnification obligations and other liabilities associated with our operations.
•We may make mistakes in conducting a clinical trial that could negatively impact the usefulness of the clinical trial which could subject us to significant costs or liability.
•If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be subject to significant costs or liability.

Risks Relating to Our Industry
•The biopharmaceutical services industry is highly competitive and our business could be materially impacted if we do not compete effectively or rapidly adapt to technological change.
•Outsourcing trends in the biopharmaceutical industry and changes in aggregate spending and research and development budgets could adversely affect our operating results and growth rate.
•We may be affected by healthcare reform and potential additional reforms.
•Actions by government regulators or clients to limit a prescription’s scope or withdraw an approved drug from the market could affect our business and result in a loss of revenues.
•Laws restricting biopharmaceutical sales and marketing practices may adversely impact demand for our services.

Risks Relating to Our Indebtedness
•Restrictions imposed in the Senior Secured Credit Facilities (as defined below) and other outstanding indebtedness, including the indentures governing outstanding notes issued by our wholly owned subsidiary IQVIA Inc., may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.
•Interest rate fluctuations and our ability to deduct interest expense may affect our results of operations and financial condition.

Risks Related to Ownership of Our Common Stock
•Provisions of the corporate governance documents of IQVIA could make an acquisition of IQVIA difficult and may prevent attempts by its stockholders to replace or remove its management, even if beneficial to its stockholders.
•Our certificate of incorporation contains a provision renouncing any interest and expectancy in certain corporate opportunities identified by certain parties.

For a more complete discussion of the material risk facing our business, see below.

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Risks Relating to Our Business

The potential loss or delay of our large contracts or of multiple contracts could adversely affect our results.


Most of our Research & Development Solutions clients can terminate our contracts upon 30 to 90 daysdays' notice. Our clients may delay, terminate or reduce the scope of our contracts for a variety of reasons beyond our control, including but not limited to:


•decisions to forego or terminate a particular clinical trial;

•lack of available financing, budgetary limits or changing priorities;

•actions by regulatory authorities;

•production problems resulting in shortages of the drug being tested;

•failure of products being tested to satisfy safety requirements or efficacy criteria;

•unexpected or undesired clinical results for products;

•insufficient patient enrollment in a clinical trial;

•insufficient investigator recruitment;

•shift of business to a competitor or internal resources;

•product withdrawal following market launch; or

•shut down of manufacturing facilities.

As a result, contract terminations, delays and alterations are a regular part of our Research & Development Solutions business. In the event of termination, our contracts often provide for fees for winding down the project, but these fees may not be sufficient for us to maintain our margins,realize the full amount of revenues or profits anticipated under the related services contracts, and termination may result in lower resource utilization rates. In addition, we will not realize the full benefits of our backlog of contractually committed services if our clients cancel, delay or reduce their commitments under our contracts with them, which may occur if, among other things, a client decides to shift its business to a competitor or revoke our status as a preferred provider. Thus, the loss or delay of a large contract or the loss or delay of multiple contracts could adversely affect our revenues and profitability. We believe the risk of loss or delay of multiple contracts potentially has greater effect where we are party to broader partnering arrangements with global biopharmaceutical companies.


We depend on third parties for data and support services. Our suppliers or providers might restrict our use of or refuse to license data or provide services, which could lead to our inability to access certain data or provide certain services and, as a result, materially and adversely affect our operating results and financial condition.


Each of our CommercialTechnology & Analytics Solutions information services is derived from data we collect from third parties. These data suppliers are numerous and diverse, reflecting the broad scope of information that we collect and use in our business.

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Although we typically enter into long-term contractual arrangements with many of these suppliers of data, at the time of entry into a new contract or renewal of an existing contract, suppliers may increase restrictions on our use of such data, increase the price they charge us for data or refuse altogether to license the data to us. In addition, during the term of any data supply contract, suppliers may fail to adhere to our data quality control standards or fail to deliver data. Further, although no single individual data supplier is material to our business, if a number of suppliers collectively representing a significant amount of data that we use for one or more of our services were to impose additional contractual restrictions on our use of or access to data, fail to adhere to our quality-control standards, repeatedly fail to deliver data or refuse to provide data, now or in the future, our ability to provide those services to our clients could be materially adversely impacted, which may harm our operating results and financial condition.


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Additionally, we depend on third parties for support services to our business. Such support services include, but are not limited to, third-partythird- party transportation providers, suppliers of drugs for patients participating in clinical trials, suppliers of kits for use in our clinical trial laboratories business, suppliers of reagents for use in our testing equipment and providers of maintenance contracts for our equipment. The failure of any of these third parties to adequately provide the critical support services could have a material adverse effect on our business.


If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be subject to significant costs or liability and our reputation could be harmed.


We contract with biopharmaceutical companies to perform a wide range of services to assist them in bringing new drugs to market. Our services include monitoring clinical trials, data and laboratory analysis, electronic data capture, patient recruitment and other related services.services, and we perform these services in a number of ways, including through physical and technology-enabled efforts. Such services are complex and subject to contractual requirements, regulatory standards and ethical considerations. For example, we must adhere to applicable regulatory requirements such as those required by the FDA, the EMA and current GCP,the competent authorities of the member states of the EU, and the MHRA in the UK, and Good Laboratory Practice and Good Manufacturing PracticeGCP requirements, which govern, among other things, the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials. Once initiated, clinical trials must be conducted pursuant to and in accordance with the applicable investigational new drug/device application or clinical trial application, the requirements of the relevant institutional review boards or ethics committees, and GCP requirements. For studies involving controlled substances, we are also typically subject to enhanced regulations, such as those required by the U.S. Drug Enforcement Administration (“DEA”) which regulates the distribution, recordkeeping, handling, security, and disposal of controlled substances. If we fail to perform our services in accordance with these requirements, regulatory agencies may take action against us for failure to comply with applicable regulations governing clinical trials or sales and marketing practices. Such actions may include sanctions, such as injunctions or failure of such regulatory authorities to grant marketing approval of products, delay, suspension or withdrawal of approvals, license revocation, product seizures or recalls, operational restrictions, civil or criminal penalties or prosecutions, damages or fines. Clients may also bring claims against us for breach of our contractual obligations and patients in the clinical trials and patients taking drugs approved on the basis of those clinical trials may bring personal injury claims against us for negligence. Any such action could have a material adverse effect on our results of operations, financial condition and reputation.


Such consequences could arise if, among other things, the following occur:


Improper performance of our services.The performance of clinical development services is complex and time-consuming. For example, we may make mistakes in conducting a clinical trial that could negatively impact or obviate the usefulness of the clinical trial or cause the results of the clinical trial to be reported improperly. If the clinical trial results are compromised, we could be subject to significant costs or liability, which could have an adverse impact on our ability to perform our services. As examples:


•non-compliance generally could result in the termination of ongoing clinical trials or sales and marketing projects or the disqualification of data for submission to regulatory authorities;


•compromise of data from a particular clinical trial, such as failure to verify that informed consent was obtained from patients, could require us to repeat the clinical trial under the terms of our contract at no further cost to our client, but at a substantial cost to us; and


•breach of a contractual term could result in liability for damages or termination of the contract.


Large clinical trials can cost up to hundreds of millions of dollars, and while we endeavor to contractually limit our exposure to such risks, improper performance of our services could have an adverse effect on our financial condition, damage our reputation and result in the cancellation of current contracts by or failure to obtain future contracts from the affected client or other clients.


Investigation of clients.From time to time, one or more of our clients are audited or investigated by regulatory authorities or enforcement agencies with respect to regulatory compliance of their clinical trials, programs or the marketing and sale of their drugs. In these situations, we have often provided services to our clients with respect to the clinical trials, programs or activities being audited or investigated, and we are called upon to respond to requests for information by the authorities and agencies. There is a risk that either our clients or regulatory authorities could claim that we performed our services improperly or that we are responsible for clinical trial or program compliance. If our clients or regulatory authorities make such claims against us and prove them, we could be subject to damages, fines or penalties. In addition, negative publicity regarding regulatory compliance of our clients’ clinical trials, programs or drugs could have an adverse effect on our business and reputation.

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Insufficient client funding to complete a clinical trial.As noted above, clinical trials can cost hundreds of millions of dollars. There is a risk that we may initiate a clinical trial for a client, and then the client becomes unwilling or unable to fund the completion of the clinical trial. This risk is heightened in a recessionary or weak funding environment for our customers, who may be unable to raise or expend funds necessary to complete a trial. In such a situation, notwithstanding the client’s ability or willingness to pay for or otherwise facilitate the completion of the clinical trial, we may be ethically bound to complete or wind down the clinical trial at our own expense.


Failure of vendors to perform contractual obligations. In the course of a clinical trial, we regularly contract with third party providers on behalf of our clients to support execution of the trial. If these third parties fail to perform their contractual obligations, we may incur additional costs or responsibilities in order to provide our clients with our contractually obligated deliverables, despite the failure of such third parties.

Security breaches and unauthorized use of our IT systems and information, or the IT systems or information in the possession of our vendors, could expose us, our clients, our data suppliers or others to risk of loss.


We rely upon the security of our computer and communications systems infrastructure to protect us from cyberattacks and unauthorized access. Cyberattacks can include malware, computer viruses, hacking or other significant disruption of our computer, communications and related systems. Cyber threats are rapidly evolving and are becoming increasingly sophisticated. Despite our efforts to ensure the integrity of our systems, asAs cyber threats evolve and become more difficult to detect and successfully defend against, one or more cyber threats might defeat the measures that we or our vendors take to anticipate, detect, avoid or mitigate such threats. Certain techniques used to obtain unauthorized access, introduce malicious software, disable or degrade service, or sabotage systems may be designed to remain dormant until a triggering event and we may be unable to anticipate these techniques or implement adequate preventative measures since techniques change frequently or are not recognized until launched, and because cyberattacks can originate from a wide variety of sources. Although we take steps to manage and avoid these risks and to prevent their recurrence, ourOur preventive and remedial actions may not be successful. The size and complexity of our IT and information security systems, and those of our vendors (and the large amounts of confidential information that is present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by, but not limited to, our employees, contingent workers, service providers, business partners, customers or malicious attackers. Such attacks, whether successful or unsuccessful, could result in our incurring costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages or fines, or taking other remedial steps with respect to third parties. Publicity about vulnerabilities and attempted or successful incursions could damage our reputation with clients and data suppliers and reduce demand for our services.


We also store proprietary and sensitive information in connection with our business, which could be compromised by a cyberattack. To the extent that any disruption or security breach results in a loss or damage to our data, an inappropriate disclosure of proprietary or sensitive information, an inability to access data sources, or an inability to process data or provide our offerings to our clients, it could cause significant damage to our reputation, affect our relationships with our data suppliers and clients (including loss of suppliers and clients), lead to claims against us and ultimately harm our business. We may be required to incur significant costs to alleviate, remedy or protect against damage caused by these disruptions or security breaches in the future. We may also face inquiry or increased scrutiny from government agencies as a result of any such disruption or breach. While we have insurance coverage for certain instances of a cyber security breach, our coverage may not be sufficient if we suffer a significant attack or multiple attacks. Any such breach or disruption could have a material adverse effect on our operating results and our reputation as a provider of mission-critical services.

service provider.


Some of our vendors have significant responsibility for the security of certain of our data centers and computer-based platforms.platforms or software-as-a-service ("SaaS") applications upon which our businesses rely to host or process data or to perform various functions. Also, our data suppliers have responsibility for security of their own computer and communications environments. These third parties face risks relating to cyber security similar to ours, which could disrupt their businesses and therefore materially impact ours. Accordingly, we are subject to any flaw in or breaches to their computer and communications systems or those that they operate for us, which could result in a material adverse effect on our business, operations and financial results.


The risk of cyberattacks has increased in connection with geopolitical events and dynamics. State-sponsored parties or their supporters may launch retaliatory cyberattacks, and may attempt to cause supply chain disruptions, or carry out other geopolitically motivated actions that may adversely disrupt or degrade our operations and may result in data compromise. State-sponsored actors have carried out cyberattacks to accomplish their goals that may include espionage, monetary gain, disruption, and destruction.

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Failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and harm our operating results.


We are pursuing business transformation initiatives to update technology, increase innovation and obtain operating efficiencies. As part of these initiatives, which include accelerating site start-up timelines and improving our customer buying experience, we seek to improve our productivity, flexibility, quality, functionality and cost savings by investing in the development and implementation of global platforms and integration of our business processes and functions to achieve economies of scale. For example, we are moving local standardizing and cleaning from countries around the world to Asia, and retiring local standardizing and cleaning systems. These various initiatives may not yield their intended gains, or be completed in timely manner, which may impact our competitiveness and our ability to meet our growth objectives and, as a result, materially and adversely affect our business, operating results and financial condition.

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If we are unsuccessful at investing in growth opportunities, our business could be materially and adversely affected.


We continue to invest significantly in growth opportunities, including the development and acquisition of new data, technologies and services to meet our clients’ needs. For example, we are expanding our services and technology offerings, such as the development of a cloud-based platform with a growing number of applications to support commercial and clinical operations for life sciences companies (e.g., multi-channel marketing, marketing campaign management, customer relationship management, incentive compensation management, targeting and segmentation, performance management, site engagement payments, trial master file, risk based monitoring, in-home nursing and other services, clinical trial management and decentralized trials and other applications). We also continue to invest significantly in growth opportunities in emerging markets, such as the development, launch and enhancement of services in China, India, Russia, Turkey, and other countries. We believe healthcare spending in these emerging markets will continue to grow over the next five years, and we consider our presence in these markets to be an important focuscomponent of our growth strategy.


There is no assurance that our investment plans or growth strategy will be successful or will produce a sufficient or any return on our investments. Further, if we are unable to develop new technologies and services, clients do not purchase our new technologies and services, our new technologies and services do not work as intended or there are delays in the availability or adoption of our new technologies and services, then we may not be able to grow our business or growth may occur slower than anticipated. Additionally, although we expect continued growth in healthcare spending in emerging markets, such spending may occur more slowly or not at all, and we may not benefit from our investments in these markets.


We plan to fund growth opportunities with cash from operations or from future financings. There can be no assurance that those sources will be available in sufficient amounts to fund future growth opportunities when needed.


Any of the foregoing could have a material and adverse effect on our operating results and financial condition.


Data protection, privacy and similar laws in the United States and around the world restrict access, use and disclosure of personal information, and failure to comply with or adapt to changes in these laws could materially and adversely harm our business.


The confidentiality, collection, use, retention, security, transfer and disclosure of personal data, including individually identifiable health information and clinical trial patient-specific information, are subject to governmental regulation generally in the country that the personal data were collected or used.used (collectively, "Privacy Laws"). For example, United States federal regulations under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) create specific requirements for the protection of the privacy and security of individual health information. These provisions apply to both “covered entities” (primarily health care providers and health insurers) and their “business associates” or service providers. As there are some instances where we are a HIPAA “business associate” of a “covered entity,” we can be directly liable for mishandling protected health information. Under HIPAA’s enforcement scheme, we can be subject to significant penalties in connection with HIPAA violations, along with the potential for significant other expenditures related to these activities. These rules require individuals’ written authorization in many situations, in addition to any required informed consent, before protected health information may be used for research. We are both directly and indirectly affected by the privacy provisions surrounding individual authorizations because many investigators with whom we are involved in clinical trials are directly subject to them as a HIPAA “covered entity” and because we obtain identifiable health information from third parties that are subject to such regulations. The laws and regulations related to the protection of personal health information in connection with research activities are under re-evaluation, particularly in the United States, and changes to these regulations could have a material adverse impact on our ability to provide some of our services in their current form or maintain our profitability. various Privacy Laws.

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In general, patient health information is among the most sensitive (and highly regulated) of personal information and laws and regulations aroundinformation. Privacy Laws in the United States and around the world are designed to ensure that information about an individual’s healthcare is properly protected from inappropriate access, use and disclosure. Privacy Laws restricting access, use and disclosure of patient health information also include the European Union’s (“EU”) General Data Protection Regulation, Canada’s Personal Information Protection and Electronic Documents Act and other data protection, privacy, data security, data localization and similar national, state/provincial and local laws. In the EU, personal data includes any information that relates to an identified or identifiable natural person. Health information about an identifiable person with health information carryingcarries additional obligations under EU law, including obtaining the explicit consent from the individual for collection, use or disclosure of the information. In addition, we are subject to EU rules with respect to cross-border transfers of such data out of the EU (along with similar data transfer requirements or data localization requirements in other countries). The United States, the EU and its member states, and other countries where we have operations, such as Japan, South Korea, Malaysia, the Philippines, Russia and Singapore, continue to issue new privacy and data protection rules and regulations that relate to personal data and health information.

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We have established frameworks, models, processes and technologies to manage privacy and security for many data types, from a variety of sources, and under a myriad privacy and data protection laws worldwide.of Privacy Laws. In addition, we rely on our data suppliers to deliver information to us in a form and in a manner that complies with applicable privacy and data protection laws.Privacy Laws. These laws are complex and there is no assurance that the safeguards and controls employed by us or our data suppliers will be sufficient to prevent a breach of these laws, or that claims will not be filed against us or our data suppliers despite such safeguards and controls. Failure to comply with such laws, certain certification/registration and annual re-certification/registration provisions associated with these data protection and privacy regulations, and similar rules in various jurisdictions, or to resolve any serious privacy complaints, may result in, among other things, regulatory sanctions, criminal prosecution, civil liability, negative publicity, damage to our reputation, or data being blocked from use or liability under contractual provisions. For example, in July 2015, indictments were issued by the Seoul Central District Prosecutors’ Office in South Korea against IMS Korea and two of its employees, among others, alleging improper handling of sensitive health information in violation of applicable privacy laws. See Item 3 “Legal Proceedings” for additional information.


Laws and expectations relating to privacy continue to evolve, and we continue to adapt to changing needs. For example, the definition of “personally identifiable information” and “personal data” continues to evolve and broaden and many new laws and regulations are being enacted. In addition, certain long-establishedestablished programs have been (or are at risk of being) declared invalid (such as the EU-U.S. Safe HarborPrivacy Shield framework that operated for manyseveral years but was struck down by the European courtsCourt of Justice in 2015)July, 2020). While the replacement for the EU-U.S. Privacy Shield (the EU-U.S. Data Privacy Framework or “DPF”) has been approved for the transfer of personal data from the EU to certified companies in the U.S., so that thisthe DPF is also subject to legal challenges and potential invalidation, thereby rendering data transfers from the EU to the US legally uncertain and keeping the area remainsof data transfers in a state of flux. Changes to these programs may adversely impact our ability to provide services to our clients or develop new products or services. Federal, state and foreign governments are contemplating or have proposed or adopted additional legislation governing the collection, possession, usenew Privacy Laws or dissemination of personal data, such as personal health information, and personal financial data as well as security breach notification rules for lossmodifications to existing Privacy Laws, including by amendment, replacement or theft of such data. Additional legislationinterpretation through judicial or regulation of this typeadministrative decisions. New or modified Privacy Laws might, among other things, require us to implement new security measures and processes or bring within the legislationscope of the Privacy Law other personal data not currently regulated, each of which may require substantial expenditures or limit our ability to offer some of our services. Additionally, changes in these laws (including newly released interpretations of these laws by courts and regulatory bodies)Privacy Laws may limit our data access, use and disclosure, and may require increased expenditures by us or may dictate that we not offer certain types of services. Any of the foregoing may have a material adverse impact on our ability to provide services to our clients or maintain our profitability.


There is ongoing concern from privacy advocates, regulators and others regarding data protection and privacy issues, and the number of jurisdictions with data protection and privacy lawsPrivacy Laws has been increasing. Also, there are ongoing public policy discussions regarding whether the standards for de-identified, anonymous or pseudonymized health information are sufficient, and the risk of re-identification sufficiently small, to adequately protect patient privacy. These discussions may lead to further restrictions on the use of such information. There can be no assurance that these initiatives or future initiatives will not adversely affect our ability to access and use data or to develop or market current or future services.

Data protection, privacy and similar laws


Many Privacy Laws protect more than patient information, and although they vary by jurisdiction, these laws can extend to employee information, business contact information, provider information and other information relating to identifiable individuals. Failure to comply with these laws may result in, among other things, civil and criminal liability, negative publicity, damage to our reputation and liability under contractual provisions. In addition, compliance with such laws may require increased costs to us or may dictate that we not offer certain types of services.


The occurrence of any of the foregoing could impact our ability to provide the same level of service to our clients, require us to modify our offerings or increase our costs, which could materially and adversely affect our operating results and financial condition.


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Our success depends on our ability to protect our intellectual property rights.


Our success depends, in part, upon our ability to develop, use and protect our proprietary methodologies, analytics, systems, technologies and other intellectual property. Existing laws of the various countries in which we provide services or solutions offer only limited protection of our intellectual property rights, and the protection in some countries may be very limited. We rely upon a combination of trade secrets, confidentiality policies, nondisclosure, invention assignment and other contractual arrangements, and patent, copyright and trademark laws, to protect our intellectual property rights. TheseRelevant laws are subject to change at any time and certain agreements may not be fully enforceable, which could further restrict our ability to protect our innovations. Further, these laws may not provide adequate protection for our intellectual property, particularly in countries in which the legal system provides less protection for intellectual property rights. Our intellectual property rights may not prevent competitors from independently developing services similar to or duplicative of ours. Further, the steps we take in this regard might not be adequate to prevent or deter infringement or other misappropriation of our intellectual property by competitors, former employees or other third parties, and we might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights.

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Our ability to obtain, protect and enforce our intellectual property rights is subject to general litigation or third-party opposition risks, as well as the uncertainty as to the scope of protection, registrability, patentability, validity and enforceability of our intellectual property rights in each applicable country. Governments may adopt regulations, and government agencies or courts may render decisions, requiring compulsory licensing of intellectual property rights. When we seek to enforce our intellectual property rights, we may be subject to claims that the intellectual property rights are invalid or unenforceable. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our confidential and proprietary information. Litigation brought to protect and enforce our intellectual property rights could be costly, time consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property rights. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our solutions, impair the functionality of our solutions, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our solutions, or injure our reputation and harm our operating results and financial condition.

Depending on the circumstances, we might need to grant a specific client greater rights in intellectual property developed in connection with a contract than we otherwise generally do. In certain situations, we might forego all rights to the use of intellectual property we create, which would limit our ability to reuse that intellectual property for other clients. Any limitation on our ability to provide a service or solution could cause us to lose revenue-generating opportunities and require us to incur additional expenses to develop or license new or modified solutions for future projects.


The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our services and harm our business; the value of our investment in development or business acquisitions could be reduced; and third parties might make claims against us related to losses of their confidential or proprietary information. In addition, we may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. Third parties that license our proprietary rights also may take actions that diminish the value of our proprietary rights or reputation. The protection of our intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights. These incidents and claims could harm our business, reduce revenue,revenues, increase expenses and harm our reputation.


We may be subject to claims by others that we are infringing on their intellectual property rights.


Third parties may assert claims that we or our clients infringe their intellectual property rights and these claims, with or without merit, could be expensive to litigate, cause us to incur substantial costs and divert management resources and attention in defending the claim. In some jurisdictions, plaintiffs can also seek injunctive relief that may limit the operation of our business or prevent the marketing and selling of our services that infringe on the plaintiff’s intellectual property rights. To resolve these claims, we may enter into licensing agreements with restrictive terms or significant fees, stop selling, be required to implement costly redesigns to the affected services, or pay damages to satisfy contractual obligations to others. If we do not resolve these claims in advance of a trial, there is no guarantee that we will be successful in court. These outcomes may have a material adverse impact on our business, operating results and financial condition.


In addition, certain contracts with our suppliers or clients contain provisions whereby we indemnify, subject to certain limitations, the counterparty for damages suffered as a result of claims related to intellectual property infringement and the use of our data. Claims made under these provisions could be expensive to litigate and could result in significant payments.


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We rely on licenses from third parties to certain technology and intellectual property rights for some of our services and the licenses we currently have could terminate or expire.


Some of our business services rely on technology or intellectual property rights owned and controlled by others. Our licenses to this technology or these intellectual property rights could be terminated or could expire. We may be unable to replace these licenses in a timely manner. Failure to renew these licenses, or renewals of these licenses on less advantageous terms, could harm our operating results and financial condition.

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Our financial results may be adversely affected if we underprice our contracts, overrun our cost estimates or fail to receive approval for or experience delays in documenting change orders.


Most of our Research & Development Solutions contracts are either fee for service contracts or fixed-fee contracts. Our past financial results have been, and our future financial results may be, adversely impacted if we initially underprice our contracts or otherwise overrun our cost estimates and are unable to successfully negotiate a change order. Change orders typically occur when the scope of work we perform needs to be modified from that originally contemplated by our contract with the client. Modifications can occur, for example, when there is a change in a key clinical trial assumption or parameter or a significant change in timing. Where we are not successful in converting out-of-scope work into change orders under our current contracts, we bear the cost of the additional work. Such underpricing, significant cost overruns or delay in documentation of change orders could have a material adverse effect on our business, results of operations, financial condition or cash flows.


The relationship of backlog to revenues varies over time.


Backlog represents future revenues for our Research & Development Solutions business from work not yet completed or performed under signed binding commitments and signed contracts. Once work begins on a project, revenue isrevenues are recognized over the duration of the project. Projects may be terminated or delayed by the client or delayed by regulatory authorities for reasons beyond our control. To the extent projects are delayed, the timing of our revenuerevenues could be affected. In the event that a client cancels a contract, we typically would be entitled to receive payment for all services performed up to the cancellation date and subsequent client-authorized services related to terminating the canceled project. Typically, however, we have no contractual right to the full amount of the revenuerevenues reflected in our backlog in the event of a contract cancellation. The duration of the projects included in our backlog, and the related revenue recognition, range from a few weeks to many years. Our backlog may not be indicative of our future revenues from our Research & Development Solutions business, and we may not realize all the anticipated future revenuerevenues reflected in our backlog. A number of factors may affect backlog, including:


•the size, complexity and duration of the projects;


•the percentage of full services versus functional services;


•the cancellation or delay of projects; and


•change in the scope of work during the course of a project.


Although an increase in backlog will generally result in an increase in revenues to be recognized over time (depending on the level of cancellations), an increase in backlog at a particular point in time does not necessarily correspond directly to an increase in revenues during a particular period. The extent to which contracts in backlog will result in revenuerevenues depends on many factors, including but not limited to delivery against projected schedules, the need for scope changes (change orders), contract cancellations and the nature, duration, size, complexity and phase of the contracts, each of which factors can vary significantly from timeproject to time.

project.


The rate at which our backlog converts to revenuerevenues may vary over time for a variety of reasons. The revenue recognition on larger, more global projects could be slower than on smaller, less global projects for a variety of reasons, including but not limited to an extended period of negotiation between the time the project is awarded to us and the actual execution of the contract, as well as an increased timeframe for obtaining the necessary regulatory approvals. Additionally, the increasedincreasing complexity of clinical trialsthe drug development pipeline and the need to enroll precise patient populations could extend the length of clinical trials causing revenuerevenues to be recognized over a longer period of time. Further, delayed projects will remain in backlog, unless otherwise canceled by the client, and will not generate revenuerevenues at the rate originally expected. Thus, the relationship of backlog to realized revenues may vary over time.

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Our business depends on the continued effectiveness and availability of our information systems, including the information systems we use to provide our services to our clients, and failures of these systems may materially limit our operations.


Due to the global nature of our business and our reliance on information systems to provide our services, we intend to increase our use of web-enabledcloud-based platforms and other integrated information systems in delivering our services. We also provide access to similar information systems to certain of our clients in connection with the services we provide them. As the breadth and complexity of our information systems continue to grow, we will increasingly be exposed to the risks inherent in the development, integration and ongoing operation of evolving information systems, including:


•disruption, impairment or failure of cloud-based platforms, data centers, telecommunications facilities or other key infrastructure platforms;


•security breaches of, cyberattacks on and other failures or malfunctions in our critical application systems or their associated hardware; and


•excessive costs, excessive delays or other deficiencies in systems development and deployment.


The materialization of any of these risks may impede the processing of data, the delivery of databases and services, and the day-to-day management of our business and could result in the corruption, loss or unauthorized disclosure of proprietary, confidential or other data. While we have disaster recovery plans in place, they might not adequately protect us in the event of a system failure. While many of our operations have disaster recovery plans in place, we currently do not have excess or standby computer processing or network capacity everywhere in the world to avoid disruption in the receipt, processing and delivery of data in the event of a system failure. Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins and similar events at our various computer facilities could result in interruptions in the flow of data to our servers and from our servers to our clients. Corruption or loss of data may result in the need to repeat a clinical trial at no cost to the client, but at significant cost to us, the termination of a contract or damage to our reputation.


In addition, any failure by our computer environment to provide sufficient processing or network capacity to transfer data could result in interruptions in our service. In the event of a delay in the delivery of data, we could be required to transfer our data collection operations to an alternative provider of server hosting services. Such a transfer could result in significant delays in our ability to deliver services to our clients and increase our costs. Additionally, significant delays in system enhancements or inadequate performance of new or upgraded systems once completed could damage our reputation and harm our business. Finally, long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our businesses. Although we carry property and business interruption insurance, our coverage might not be adequate to compensate us for all losses that may occur.


We have continued to undertake significant programs to optimize business processes with respect to our services. Our inability to effectively manage the implementation and adapt to new processes designed into new or upgraded systems in a timely and cost-effective manner may result in disruption to our business and negatively affect our operations.


We have entered into agreements with certain vendors to provide systems development and integration services that develop or license to us the IT platform for programs to optimize our business processes. If such vendors fail to perform as required or if there are substantial delays in developing, implementing and updating the IT platform, our client delivery may be impaired, and we may have to make substantial further investments, internally or with third parties, to achieve our objectives. Additionally, our progress may be limited by parties with existing or claimed patents who seek to enjoin us from using preferred technology or seek license payments from us. Meeting our objectives is dependent on a number of factors which may not take place as we anticipate, including obtaining adequate technology-enabled services, creating IT-enabled services that our clients will find desirable and implementing our business model with respect to these services. Also, increased IT-related expenditures may negatively impact our profitability.

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We may experience challenges with the acquisition, development, enhancement or deployment of technology necessary for our business.


We operate in businesses that require sophisticated computer systems and software for data collection, data processing, cloud-based platforms, analytics, cryptography, statistical projections and forecasting, mobile computing, social media analytics and other applications and technologies, particularly in our CommercialTechnology & Analytics Solutions business.and Research & Development Solutions businesses. We are building artificial intelligence (AI) technologies into internal applications and solutions we use with others, including clients; we expect the use of AI to grow. We seek to address our technology risks by increasing our reliance on the use of innovations by cross-industry technology leaders and adapt these for our biopharmaceutical and healthcare industry clients. Some of these technologies supporting the industries we serve are changing rapidly and we must continue to adapt to these changes in a timely and effective manner at an acceptable cost. We also must continue to deliver data to our clients in forms that are easy to use while simultaneously providing clear answers to complex questions. There can be no guarantee that we will be able to develop, acquire or integrate new technologies, that these new technologies will meet our needs or those of our clients’ needs or achieve expected investment goals, or that we will be able to do so as quickly or cost-effectively as our competitors. Significant technological change could render certain of our services obsolete. Moreover, the introduction of new services embodying new technologies could render certain of our existing services obsolete. Our continued success will depend on our ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of our services in response to changing client and industry demands. We may experience difficulties that could delay or prevent the successful design, development, testing, introduction or marketing of our services. New services, or enhancements to existing services, may not adequately meet theour own requirements or those of current and prospective clients or achieve any degree of significant market acceptance. These types of failures could have a material adverse effect on our operating results, financial condition and financial condition.

reputation.


Consolidation in the industries in which our clients operate may reduce the volume of services purchased by consolidated clients following an acquisition or merger, which could materially harm our operating results and financial condition.


Mergers or consolidations among our clients have in the past and could in the future reduce the number of our clients and potential clients. When companies consolidate, overlapping services previously purchased separately are usually purchased only once by the combined entity, leading to loss of revenue.revenues. Other services that were previously purchased by one of the merged or consolidated entities may be deemed unnecessary or cancelled. If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services. There can be no assurance as to the degree to which we may be able to address the revenuerevenues impact of such consolidation. Any of these developments could materially harm our operating results and financial condition.


We may be adversely affected by client or therapeutic concentration.


Although we did not have any client that represented 10% or more of our revenues in 2017, 20162023, 2022 and 2015,2021, we derive the majority of our revenues from a number of large clients. If any large client decreases or terminates its relationship with us, our business, results of operations or financial condition could be materially adversely affected.


Additionally, conducting multiple clinical trials for different clients in a single therapeutic class involving drugs with the same or similar chemical action has in the past and may in the future adversely affect our business if some or all of the clinical trials are canceled because of new scientific information or regulatory judgments that affect the drugs as a class or if industry consolidation results in the rationalization of drug development pipelines. Similarly, marketing and selling drugs for different biopharmaceutical companies with similar chemical actions subjects us to risk if new scientific information or regulatory judgment prejudices the drugs as a class, which may lead to compelled or voluntary prescription limitations or withdrawal of some or all of such drugs from the market.

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Our business is subject to international economic, political and other risks that could negatively affect our results of operations and financial condition.


We have significant operations in countries that may require complex arrangements to deliver services throughout the world for our clients. Additionally, we have established operations in locations remote from our most developed business centers. As a result, we are subject to heightened risks inherent in conducting business internationally, including the following:


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•required compliance with a variety of local laws and regulations which may be materially different than those to which we are subject in the United States or which may change unexpectedly; for example, conducting a single clinical trial across multiple countries is complex, and issues in one country, such as a failure to comply with local regulations or restrictions, may affect the progress of the clinical trial in the other countries, for example, by limiting the amount of data necessary for a clinical trial to proceed, resulting in delays or potential cancellation of contracts, which in turn may result in loss of revenue;

revenues;

•the United States or foreign countries have and could continue to enact legislation or impose regulations or other restrictions, including unfavorable labor regulations, tax policies or economic sanctions, which could have an adverse effect on our ability to conduct business in or expatriate profits from the countries in which we operate, including hiring, retaining and overseeing qualified management personnel for managing operations in multiple countries, differing employment practices and labor issues, and tax-related risks, including the imposition of taxes and the lack of beneficial treaties, that result in a higher effective tax rate for us;


•foreign countries are expanding or may expand their regulatory framework with respect to patient informed consent, protection and compensation in clinical trials, which could delay or inhibit our ability to conduct clinical trials in such jurisdictions;


•the regulatory or judicial authorities of foreign countries may not enforce legal rights and recognize business procedures in a manner in which we are accustomed or would reasonably expect;


•local, economic, political and social conditions, including sustained increases in inflation rates and/or potential hyperinflationary conditions, political instability, and potential nationalization, repatriation, expropriation, price controls or other restrictive government actions, including changes in political and economic conditions may lead to changes in the business environment in which we operate, as well as changes in foreign currency exchange rates;


•immigration laws are subject to legislative change and varying standards of application and enforcement due to political forces, economic conditions or other events (including proposals in the U.S. to change limitations on temporary and permanent workers), and local immigration laws may require us to meet certain other legal requirements as a condition to obtaining or maintaining entry visas, which may impact our ability to provide services to our clients;


•potential violations of local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act (“FCPA”), and the UK Bribery Act, may cause difficulty in managing foreign operations, as well as significant consequences to us if those laws are violated;

regulatory changes and economic conditions leading up to and following the UK’s likely exit from the EU (“Brexit”), including uncertainties as to its effect on trade laws, tariffs, instability and volatility in the global financial and currency markets, conflicting or redundant regulatory regimes in Europe, such as the European Medicines Agency (“EMA”) possible relocation from UK to a country within the European Union, and political stability;


•clients in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables in foreign jurisdictions; and


•natural disasters, public health emergencies and pandemics such as the COVID-19, including any variants, or international conflict, includingsuch as the ongoing conflict between Russia and Ukraine, or terrorist acts, could interrupt our services, endanger our personnel, orlower patient visits and increase patient drop-out rates, cause delays in recruitment of new patients, decrease the productivity of our clinical research associates, cause other project delays or loss of clinical trial materials or results.


These risks and uncertainties could negatively impact our ability to, among other things, perform large, global projects for our clients. Furthermore, our ability to deal with these issues could be affected by applicable United States laws and the need to protect our assets. Any such risks could have an adverse impact on our financial condition and results of operations.

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Climate change may have an impact on our business.

While we have determined that, at this time, climate change does not present a material risk to our business given the nature of our activities, we continue to evaluate and mitigate our business risks associated with climate change, and we recognize that there are inherent climate-related risks wherever business is conducted. Any of our office or IT systems locations may be vulnerable to the adverse effects of climate change. Furthermore, climate change may impact patients in our clinical trials and our employees, particularly where they work remotely. Changing market dynamics, global policy developments, and the increasing frequency and impact of extreme weather events on critical infrastructure have the potential to disrupt our business, the business of our third-party suppliers, and the business of our customers, and may cause us to experience losses and additional costs to maintain or resume operations.

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Increasing focus on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results.

There has been increasing public focus by investors, customers, environmental activists, the media, and governmental and nongovernmental organizations on a variety of environmental, social, and other sustainability matters. In light of the importance of this to our internal and external stakeholders, if we are not effective in addressing environmental, social and other sustainability matters affecting our business, or setting and meeting relevant sustainability goals, our reputation and financial results may suffer. We may experience increased costs in order to execute upon our sustainability goals and measure achievement of those goals, which could have an adverse impact on our business and financial condition.

In addition, this emphasis on environmental, social, and other sustainability matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements (including, but not limited to the EU Corporate Sustainability Reporting Directive, the EU Taxonomy, and the proposed EU Corporate Sustainability Due Diligence Directive). Such rules may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and Board. If we fail to comply with new laws, regulations, or reporting requirements, our reputation and business could be adversely impacted. In addition, compliance with new laws, regulations, and reporting requirements may increase our costs, result in disclosures of potentially competitively sensitive information, or may cause us to be targeted by activists, regulators, or others who want us to take a different approach to such matters or increase our disclosures or commitments.

Moreover, investor advocacy groups, investment funds, and influential investors are increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price. In addition, certain environmental and social disclosures and commitments we make may be reliant in part or in whole on third party information, which we cannot verify the quality of, and third party performance, which we cannot guarantee. We may fail to meet our environmental and social commitments either entirely or on the schedule we commit to.

Exchange rate fluctuations may affect our results of operations and financial condition.


Because a large portion of our revenues and expenses are denominated in currencies other than the United States dollar and our financial statements are reported in United States dollars, changes in foreign currency exchange rates could significantly affect our results of operations and financial condition. Exchange rate fluctuations between local currencies and the United States dollar create risk in several ways, including:


•Foreign Currency Translation Risk. Risk. The revenuerevenues and expenses of our foreign operations are generally denominated in local currencies and translated into United States dollars for financial reporting purposes. Accordingly, exchange rate fluctuations will affect the translation of foreign results into United States dollars for purposes of reporting our consolidated results.

Unanticipated currency fluctuations have affected and could continue to affect our financial results and cause our results to differ from investor expectations or our own guidance in any future periods.

•Foreign Currency Transaction Risk. Risk. We are subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of a transaction. We earn revenuerevenues from our service contracts over a period of several months and, in some cases, over several years. Accordingly, exchange rate fluctuations during this period may affect our profitability with respect to such contracts.


•Foreign Currency Risk from Differences in Customer Contract Currency and Operating Costs Currency. The majority of our Research & Development Solutions global contracts are denominated in U.S. dollars or Euros while our operating costs in foreign countries are denominated in various local currencies. Fluctuations in the exchange rates of the currencies we use to contract with our customers and the currencies in which we incur cost to fulfill those contracts can have an adverse impact on our results of operations.

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We may aim to limit these risks through exchange rate fluctuation provisions stated in our service contracts, or we may hedge our transaction risk with foreign currency exchange contracts or options. We have not, however, hedged all of our foreign currency transaction risk, and we may experience fluctuations in financial results from our operations outside the United States and foreign currency transaction risk associated with our service contracts.


Due to the global nature of our business, we may be exposed to liabilities under anti-corruption laws, including the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act and various international anti-corruption laws, and any allegation or determination that we violated these laws could have a material adverse effect on our business.


We are required to comply with the FCPA, the UK Bribery Act and other international anti-corruption laws, which prohibit companies from engaging in bribery including corruptly or improperly offering, promising, or providing money or anything else of value to non-United States officials and certain other recipients. In addition, the FCPA imposes certain books, records, and accounting control obligations on public companies and other issuers. We operate in parts of the world in which corruption can be common and compliance with anti-bribery laws may conflict with local customs and practices. Our global operations face the risk of unauthorized payments or offers being made by employees, consultants, sales agents, and other business partners outside of our control or without our authorization. It is our policy to implement safeguards to prohibit these practices by our employees and business partners with respect to our operations. However, irrespective of these safeguards, or as a result of monitoring compliance with such safeguards, it is possible that we or certain other parties may discover or receive information at some point that certain employees, consultants, sales agents, or other business partners may have engaged in corrupt conduct for which we might be held responsible. Violations of the FCPA, the UK Bribery Act or other international anti-corruption laws may result in restatements of, or irregularities in, our financial statements as well as severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In some cases, companies that violate the FCPA may be debarred by the United States government and/or lose their United States export privileges. Changes in anti-corruption laws or enforcement priorities could also result in increased compliance requirements and related costs which could adversely affect our business, financial condition and results of operations. In addition, the United States or other governments may seek to hold us liable for successor liability FCPA violations or violations of other anti-corruption laws committed by companies in which we invest or that we acquired or will acquire.


We face risks related to sales to government entities.


We derive a portion of our revenuerevenues from sales to government entities inaround the United States.world. In general, our contracts with United States government entities are terminable at will by the government entity at any time. Government demand and payment for our services may be affected by public-sector budgetary cycles and funding authorizations, including government shutdowns. Government contracts are typically subject to oversight, including special rules on accounting, expenses, reviews and security. Failure to comply with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines and suspensions, or debarment from future business with the United Statesrelevant government. As a result, failure to comply with these rules could have an adverse effect on our future business, reputation, operating results and financial condition.

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If we are unable to successfully develop and market new services or enter new markets, our growth, results of operations or financial condition could be adversely affected.


A key element of our growth strategy is the successful development and marketing of new services or entering new markets that complement or expand our existing business. As we develop new services or enter new markets, including services targeted at participants in the broader healthcare industry, we may not have or adequately build the competencies necessary to perform such services satisfactorily, may not receive market acceptance for such services or may face increased competition. If we are unable to succeed in developing new services, entering new markets or attracting a client base for our new services or in new markets, we will be unable to implement this element of our growth strategy, and our future business, reputation, results of operations and financial condition could be adversely affected.


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Our Research & Development Solutions business could subject us to potential liability that may adversely affect our results of operations and financial condition.


Our Research & Development Solutions business involves the testing of new drugs on patients in clinical trials and, if marketing approval is granted, the availability of these drugs to be prescribed to patients. Our involvement in the clinical trials and development process creates a risk of liability for personal injury to or death of patients, particularly those with life-threatening illnesses, resulting from adverse reactions to the drugs administered during testing or after product launch, respectively. For example, we have from time to time been sued and may be sued in the future by individuals alleging personal injury due to their participation in clinical trials and seeking damages from us under a variety of legal theories. Although we maintain the types and amounts of insurance we view as customary in the industries and countries in which we operate, if we are required to pay damages or incur defense costs in connection with any personal injury claim that is outside the scope of indemnification agreements we have with our clients, if any indemnification agreement is not performed in accordance with its terms or if our liability exceeds the amount of any applicable indemnification limits or available insurance coverage, our financial condition, results of operations and reputation could be materially and adversely affected. We maintain professional liability insurance, including liability for completed operations coverage. In the future, we may not be able to get adequate insurance for these types of risks at reasonable rates.


We also contract with physicians to serve as investigators in conducting clinical trials. If the investigators commit errors or make omissions during a clinical trial that result in harm to clinical trial patients or after a clinical trial to a patient using the drug after it has received regulatory approval, claims for personal injury or liability damages may result. Additionally, if the investigators engage in fraudulent behavior, clinical trial data may be compromised, which may require us to repeat the clinical trial or subject us to liability. We do not believe we are legally responsible for the medical care rendered by such third-party investigators, and we would vigorously defend any claims brought against us. However, it is possible we could be found liable for claims with respect to the actions of third-party investigators, which may adversely affect our financial condition, results of operations and reputation.

Some


Social media platforms are increasingly being used to communicate about biopharmaceutical products and the diseases our customers’ medicines and drug candidates are designed to treat. Social media practices in the biopharmaceutical industry continue to evolve and regulations relating to such use are not always clear and create uncertainty and risk of noncompliance with regulations applicable to our Research & Development Solutions business. For example, patients may use social media channels to comment on the effectiveness of a product or to report an alleged adverse event. When such disclosures occur, there is a risk that we may fail to monitor and comply with applicable adverse event reporting obligations.

Some of our services involve direct interaction with clinical trial subjects or volunteers and operationsubcontracting into a network of Phase I clinical facilities, which could create potential liability that may adversely affect our results of operations, financial condition and financial condition.

reputation.


We operatesubcontract into a network of facilities where Phase I clinical trials are conducted, which ordinarily involve testing an investigational drug on a limited number of healthy individuals, typically 20 to 80 persons, to determine such drug’s basic safety. Failure to operate such a facility in accordance with applicable regulations could result in that facility being shut down, which could disrupt our operations. Additionally, we face risks associated with adverse events resulting from the administration of such drugs to healthy volunteers and the professional malpractice of medical care providers. Occasionally, physicians employed at our Phase I clinical facilities act as principal investigators in later-phase clinical trials at those same facilities. We also directly employ nurses and other trained employees who assist in implementing the testing involved in our clinical trials, such as drawing blood from healthy volunteers. Any professional malpractice or negligence by such investigators, nurses or other subcontracted employees could potentially result in liability to us in the event of personal injury to or death of a healthy volunteer in clinical trials.trials, and could also cause us reputational harm. This liability, particularly if it were to exceed the limits of any indemnification agreements and insurance coverage we may have, may adversely affect our financial condition, results of operations and reputation.

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Our Integrated Engagement ServicesContract Sales & Medical Solutions business could result in liability to us if a drug causes harm to a patient. While we are generally indemnified and insured against such risks, we may still suffer financial losses.


When we market drugs under contract for a biopharmaceutical company, we could suffer liability for harm allegedly caused by those drugs, either as a result of a lawsuit against the biopharmaceutical company to which we are joined, a lawsuit naming us or any of our subsidiaries or an action launched by a regulatory body. While we are generally indemnified by the biopharmaceutical company for the action of the drugs we market on its behalf, and we carry insurance to cover harm caused by our negligence in performing services, it is possible that we could nonetheless incur financial losses, regulatory penalties or both. In particular, any claim could result in potential liability for us if the claim is outside the scope of the indemnification agreement we have with the biopharmaceutical company, the biopharmaceutical company does not abide by the indemnification agreement as required or the liability exceeds the amount of any applicable indemnification limits or available insurance coverage. Such a finding could have an adverse impact on our financial condition, results of operations and reputation. Furthermore, negative publicity associated with harm caused by drugs we helped to market could have an adverse effect on our business and reputation.


Our insurance may not cover all of our indemnification obligations and other liabilities associated with our operations.


We maintain insurance designed to provide coverage for ordinary risks associated with our operations and our ordinary indemnification obligations. The coverage provided by such insurance may not be adequate for all claims we may make or may be contested by our insurance carriers. If our insurance is not adequate or available to pay liabilities associated with our operations, or if we are unable to purchase adequate insurance at reasonable rates in the future, our profitability may be adversely impacted.


If we are unable to attract suitable investigators and patients for our clinical trials, our clinical development business might suffer.


The timely recruitment of investigators and patients for clinical trials is essential to our Research & Development Solutions business. Investigators are typically located at hospitals, clinics or other sites and supervise the administration of the investigational drug to patients during the course of a clinical trial. Patients generally include people from the communities in which the clinical trials are conducted. Investigators may be unwilling to participate for a variety of reasons, including the increasing complexity of clinical trials, inability to hire and retain qualified staff or perception that the fair market value for services rendered is inadequate. Our clinical development business could be adversely affected if we are unable to attract suitable and willing investigators or patients for clinical trials on a consistent basis. For example, if we are unable to engage investigators to conduct clinical trials as planned or enroll sufficient patients in clinical trials, we might need to expend additional funds to obtain access to resources or else be compelled to delay or modify the clinical trial plans, which may result in additional costs to us.


If we lose the services of key personnel or experience sustained labor shortages and are unable to recruit additional qualified personnel, or we are required to substantially increase wage rates to attract or retain employees, our business could be adversely affected.


Our success substantially depends on the collective performance, contributions and expertise of our personnel including senior management and key personnel, qualified professional, scientific and technical operating staff and qualified sales representatives for our contract sales services. There is significant and increasing competition for qualified personnel, particularly those with higher educational degrees, such as a medical degree, a Ph.D. or an equivalent degree, or relevant experience in the industry, including highly technical specialties such as clinical research associates, project managers and technology developers, and in the locations in which we operate. In addition, theIncreases in inflation, competition and shortages of qualified personnel in certain specialty areas may make it more difficult to hire and retain our key employees and could result in substantial increased costs, such as increased wage rates to attract and retain employees. The departure of our key employees, or our inability to continue to identify, attract and retain qualified personnel or replace any departed personnel in a timely fashion, may impact our ability to grow our business and compete effectively in our industry and may negatively affect our ability to meet financial and operational goals.


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Disruptions in the credit and capital markets and unfavorable general economic conditions could negatively affect our business, results of operations and financial condition.


Disruptions in the credit and capital markets could have negative effects on our business that may be difficult to predict or anticipate, including the ability of our clients, vendors, contractors and financing sources to meet their contractual obligations. Although we are unable to quantify the impact it has had on us, we are aware of a limited number of instances in our Research & Development Solutions business during the past several years where cancellations, changes in scope and failure to pay timely were attributable, at least in part, to difficulty in our clients’ ability to obtain financing. In the future such actions by our clients could, if they involve a significant amount of business with us, have a material adverse effect on our results of operations.

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Our effective income tax rate may fluctuate for a variety of reasons, including the Tax Cuts and Jobs Act enacted in 2017 (the “Tax Act”), which may adversely affect our operations, earnings and earnings per share.


Our effective income tax rate is influenced by our projected profitability in the various taxing jurisdictions in which we operate. Changes in a jurisdiction’s income tax rates and the distribution of our profits and losses among such jurisdictions may have a significant impact on our effective income tax rate, which in turn could have an adverse effect on our net income and earnings per share. FactorsOther factors that may affect our effective income tax rate include, but are not limited to:

the requirement to exclude from our quarterly worldwide effective income tax calculations losses in jurisdictions where no income tax benefit can be recognized;

actual and projected full year pre-tax income;


•changes in the valuationvalue of deferred tax assets and liabilities;

the repatriation of foreign earnings to the United States;


•changes in tax laws in various jurisdictions, including the Tax Act;

jurisdictions;

•audits by taxing authorities; and


•the establishment of valuation allowances against deferred income tax assets if we determined that it is more likely than not that future income tax benefits will not be realized.


In addition,the course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain which may require the use of estimates and significant judgement to account for their impact on the effective income tax rate is influenced by U.S.in our consolidated financial statements. As the regulations and guidance evolve with respect to current and newly enacted tax law, which has been substantially modified by the Tax Act.  The following provisions of the Tax Act could have an adverse effect on our tax rate if it is determined that the provisions are applicable to us:

•           Anti-base erosionresults may differ from previous estimates and profit shifting;

•           Global intangible low-taxed income;

•           Deduction for net business interest limited to 30% of adjusted taxable income; and

•           Performance-based compensation and commissions now subject to $1 million limit.

may materially affect our consolidated financial statements.


All of these items described above may cause fluctuations in our effective income tax rate through increased U.S.income tax liability and/or the loss of tax attributes in any given year that could adversely affect our results of operations and impact our earnings and earnings per share. Additional information regarding our income taxes is presented in Note 1816 to our audited consolidated financial statements included in this Annual Report on Form 10-K.


Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”), including ASC 606 “Revenue from Contracts with Customers” (ASC 606), or other standard-setting bodies may adversely affect our financial statements.


We are required to prepare our financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”), which is periodically revised and/or expanded. From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that future accounting standards we are required to adopt, such as amended guidance for leases,income taxes, may require additional changes to the current accounting treatment that we apply to our financial statements and may require us to make significant changes to our reporting systems. Such changes could result in a material adverse impact on our business, results of operations and financial condition.

For example, effective January 1, 2018, we were required to adopt ASC 606. Under this new standard, the Company is required to recognize revenue for its clinical trial arrangements on a percentage of completion basis. This change in revenue recognition requires significant estimates of project costs that will need to be updated and adjusted on a regular basis. These updates and adjustments are likely to result in variability in our revenue recognition from period to period that may cause unexpected variability in our operating results. See Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for details regarding ASC 606.

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Our relationships with existing or potential clients who are in competition with each other may adversely impact the degree to which other clients or potential clients use our services, which may adversely affect our results of operations.


The biopharmaceutical industry is highly competitive, with biopharmaceutical companies each seeking to persuade payers, providers and patients that their drug therapies are better and more cost-effective than competing therapies marketed or being developed by competing firms. In addition to the adverse competitive interests that biopharmaceutical companies have with each other, biopharmaceutical companies also have adverse interests with respect to drug selection and reimbursement with other participants in the healthcare industry, including payers and providers. Biopharmaceutical companies also compete to be first to market with new drug therapies. We regularly provide services to biopharmaceutical companies who compete with each other, and we sometimes provide services or funding to such clients regarding competing drugs in development. Our existing or future relationships with our biopharmaceutical clients may therefore deter other biopharmaceutical clients from using our services or may result in our clients seeking to place limits on our ability to serve other biopharmaceutical industry participants in connection with drug development activities. In addition, our further expansion into the broader healthcare market may adversely impact our relationships with biopharmaceutical clients, and such clients may elect not to use our services, reduce the scope of services that we provide to them or seek to place restrictions on our ability to serve clients in the broader healthcare market with interests that are adverse to theirs. A loss of clients or reductions in the level of revenues from a client could have a material adverse effect on our results of operations, business and prospects.


If we are unable to successfully identify, acquire and integrate existing businesses, services and technologies, our business, results of operations and financial condition could be adversely impacted.


We anticipate that a portion of our future growth may come from acquiring existing businesses, services or technologies. The success of any acquisition will depend upon, among other things, our ability to effectively integrate acquired personnel, operations, services and technologies into our business and to retain the key personnel and clients of our acquired businesses. In addition, we may be unable to identify suitable acquisition opportunities, or obtain any necessary financing on commercially acceptable terms.terms or receive regulatory approvals, which have become increasingly more challenging, costly and time consuming, to move forward with the transaction as contemplated in a timely manner or at all. We may also spend time and money investigating and negotiating with potential acquisition targets but not complete the transaction. Any future acquisition could involve other risks, including, among others, the assumption of additional liabilities and expenses, termination fees, litigation costs if a regulator decides to block a proposed transaction and we challenge the regulator's decision through an administrative or legal process, difficulties and expenses in connection with integrating the acquired companies and achieving the expected benefits, issuances of potentially dilutive securities or interest-bearing debt, loss of key employees of the acquired companies, transaction costs, diversion of management’s attention from other business concerns and, with respect to the acquisition of foreign companies, the inability to overcome differences in foreign business practices, language and customs. Our failure to identify potential acquisitions, complete targeted acquisitions and integrate completed acquisitions could have a material adverse effect on our business, financial condition and results of operations.

Investments in our clients’ businesses or drugs and our related commercial rights strategies could have a negative impact on our financial performance.

We may enter into arrangements with our clients or other drug companies in which we take on some of the risk of the potential success or failure of their businesses or drugs, including making strategic investments in our clients or other drug companies, providing financing to clients or other drug companies or acquiring an interest in the revenues from clients’ drugs or in entities developing a limited number of drugs. Our financial results would be adversely affected if these investments or the underlying drugs result in losses or do not achieve the level of success that we anticipate and/or our return or payment from the drug investment or financing is less than our direct and indirect costs with respect to these arrangements.


Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets.


We assess the realizability of our indefinite-lived intangible assets and goodwill annually and conduct an interim evaluation whenever events or changes in circumstances, such as operating losses or a significant decline in earnings associated with the acquired business or asset, indicate that these assets may be impaired. For example, we recognized $40 million of impairment losses during the year ended December 31, 2017, for goodwill and intangible assets in Encore Health Resources LLC (“Encore”), which we sold in the third quarter of 2017. Our ability to realize the value of the goodwill and indefinite-lived intangible assets will depend on the future cash flows of the businesses we have acquired, which in turn could depend in part on how well we have integrated these businesses into our own business. If we are not able to realize the value of the goodwill and indefinite-lived intangible assets, we may be required to incur material charges relating to the impairment of those assets. Such impairment charges could materially and adversely affect our operating results and financial condition.

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We face risks arising from the restructuring of our operations.


From time to time, we have adopted restructuring plans to improve our operating efficiency through various means such as reduction of overcapacity, elimination of non-billable support roles or other realignment of resources. Restructuring presents significant potential risks of events occurring that could adversely affect us, including:


•actual or perceived disruption of service or reduction in service standards to clients;


•the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve conflicts that may arise;

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•loss of sales as we reduce or eliminate staffing on non-core services;


•diversion of management attention from ongoing business activities; and


•the failure to maintain employee morale and retain key employees.


Further, any such restructuring would result in charges that, if material, could harm our results of operations and significantly reduce our cash position or increase debt. In addition, we may incur certain unforeseen costs once any restructuring activities are implemented. Further, if we determine to effect any restructuring, we can give no assurance that any projected cost reductions resulting from such restructuring activities will be achieved within the expected timeframe, or at all.


Because of these and other factors, we cannot predict whether we will realize the purpose and anticipated benefits of these measures and, if we do not, our business and results of operations may be adversely affected.


Additionally, there may be delays in implementing the restructuring activities or a failure to achieve the anticipated levels of cost savings and efficiency as a result of the restructuring activities, each of which could materially and adversely impact our business and results of operations. Further restructuring or reorganization activities may also be required in the future beyond what is currently planned, which could further enhance the risks associated with these activities.


Risks Relating to Our Industry


The biopharmaceutical services industry is highly competitive.

competitive and our business could be materially impacted if we do not compete effectively or rapidly adapt to technological change.


The biopharmaceutical services industry is highly competitive. Our business often competes with other biopharmaceutical services companies, internal discovery departments, development departments, sales and marketing departments, information technology departments and other departments within our clients, some of which could be considered large biopharmaceutical services companies in their own right with greater resources than ours. We also compete with universities, teaching hospitals, governmentsgovernment agencies and others. If we do not compete successfully, our business will suffer. The biopharmaceutical services industry is highly fragmented, with numerous smaller specialized companies and a handful of companies with global capabilities similar to certain of our own capabilities. Increased competition has led to price and other forms of competition, such as acceptance of less favorable contract terms, that could adversely affect our operating results. There are few barriers to entry for companies considering offering any one or more of the services we offer. Because of their size and focus, these companies might compete effectively against us, which could have a material adverse impact on our business.


In addition, the emergence of the use of Real World Evidence and new approaches such as machine learning and artificial intelligence that capitalize on the availability of large data sets may reduce the time and costs of the discovery and development process, may allow our clients to more readily perform for themselves clinical development tasks and services that we have typically provided, may cause even greater price competition or may render certain data offerings less valuable or relevant. More broadly, our current competitors or other businesses might develop technologies or services that are more effective or commercially attractive than, or render obsolete, our current or future technologies and services. We may also fail to fully leverage the technologies available to us or develop technologies quickly enough to be competitively useful. Our failure to develop and offer competitive services that address these and other technological advances in a timely, cost-effective manner or to keep pace with rapid technological change could adversely affect our competitive position and our results of operations.

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Our future growth and success will depend on our ability to successfully compete with other companies that provide similar services in the same markets, some of which may have financial, marketing, technical and other advantages. We also expect that competition will continue to increase as a result of consolidation among these various companies. Large technology companies with substantial resources, technical expertise and greater brand power could also decide to enter or further expand in the markets where our business operates and compete with us. If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, or if a new entrant emerged with substantial resources, the change in the competitive landscape could adversely affect our ability to compete effectively. We compete on the basis of various factors, including breadth and depth of services, reputation, reliability, quality, geographic coverage, innovation, security, price and industry expertise and experience. In addition, our ability to compete successfully may be impacted by the growing availability of health information from social media, government health information systems and other free or low-cost sources. Consolidation or integration of wholesalers, retail pharmacies, health networks, payers or other healthcare stakeholders may lead any of them to provide information services directly to clients or indirectly through a designated service provider, resulting in increased competition from firms that may have lower costs to market (e.g., no data supply costs). Any of the above may result in lower demand for our services, which could result in a material adverse impact on our operating results and financial condition.

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Outsourcing trends in the biopharmaceutical industry and changes in aggregate spending and research and development budgets could adversely affect our operating results and growth rate.


Economic factors and industry trends that affect biopharmaceutical companies affect our Research & Development Solutions business. Biopharmaceutical companies continue to seek long-term strategic collaborations with global contractclinical research organizations with favorable pricing terms. Competition for these collaborations is intense and we may decide to forego an opportunity or we may not be selected, in which case a competitor may enter into the collaboration and our business with the client, if any, may be limited. In addition, if the biopharmaceutical industry reduces its Research & Development Solutions activities or reduces its outsourcing of clinical trials and sales and marketing projects or such outsourcing fails to grow at projected rates, our operations and financial condition could be materially and adversely affected.

Our smaller biopharmaceutical company customers may rely on funding from venture capital and other sources to drive their business. When this funding is reduced, these customers have been and may in the future be forced to reduce their outsourced R&D and commercialization expenditures or may be unable to pay for services rendered, which could have a material adverse effect on our business and results of operations.

We may also be negatively impacted by consolidation and other factors in the biopharmaceutical industry, which may slow decision making by our clients or result in the delay or cancellation of clinical trials. Our commercial services may be affected by reductions in new drug launches and increases in the number of drugs losing patent protection. Further, in the event that one of our customers combines with a company that is using the services of one of our competitors, the combined company could decide to use the services of that competitor or another provider. All of these events could adversely affect our business, results of operations or financial condition.


Our business may be materially and adversely impacted by factors affecting the biopharmaceutical and healthcare industries.


The vast majority of our revenue isrevenues are generated from sales to the biopharmaceutical and healthcare industries. The clients we serve in these industries are commonly subject to financial pressures, including, but not limited to, increased costs, reduced demand for their products, reductions in pricing and reimbursement for products and services, formulary approval and placement, government approval to market their products and limits on the manner by which they market their products, loss of patent exclusivity (whether due to patent expiration or as a result of a successful legal challenge) and the proliferation of or changes to regulations applicable to these industries. To the extent our clients face such pressures, or they change how they utilize our offerings, the demand for our services, or the prices our clients are willing to pay for those services, may decline. Any such decline could have a material adverse effect on our business, operating results and financial condition.


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We may be affected by healthcare reform and potential additional reforms.

reforms, which may adversely impact the biopharmaceutical industry and reduce demand for our services or negatively impact our profitability.


The United States Congress continues to consider healthcare reform legislation and impose health industry cost containment measures, which may significantly impact the biopharmaceutical industry. In addition, numerous government bodies are considering or have adopted various healthcare reforms and may undertake, or are in the process of undertaking, efforts to control growing healthcare costs through legislation, regulation and voluntary agreements with medical care providers and biopharmaceutical companies. We are uncertain as to the effects of these recent reforms on our business and are unable to predict what legislative proposals, if any, will be adopted in the future. If regulatory cost containment efforts limit the profitability of new drugs by, for example, continuing to place downward pressure on pharmaceutical pricing and/or increasing regulatory burdens and operating costs of the biopharmaceutical industry, our clients may reduce their research and development spending or promotional, marketing and sales expenditures, which could reduce the business they outsource to us. For example, in August 2022, the Inflation Reduction Act was signed into law in the United States, which, among other things, requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). In addition, changes to the Medicaid program or the federal 340B drug pricing program, which imposes ceilings on prices that drug manufacturers can charge for medications sold to certain health care facilities, could have a material impact on our customers, which could reduce demand for our services. Similarly, if regulatory requirements are relaxed or simplified drug approval procedures are adopted, the demand for our services could decrease.


Foreign and domestic government bodies have adopted and may alsocontinue to adopt new healthcare legislation or regulations that are more burdensome than existing regulations. For example, product safety concerns and recommendations by the Drug Safety Oversight Board could change the regulatory environment for drug products, and new or heightened regulatory and licensing requirements may increase our expenses or limit or delay our ability to offer some of our services. We might have to incur additional costs to comply with these or other new regulations, and failure to comply could harm our financial condition, results of operations, cash flows, and reputation, and result in adverse legal action(s). Additionally, new or heightened regulatory requirements may have a negative impact on the ability of our clients to conduct industry-sponsored clinical trials, which could reduce the need for our services.


Actions by government regulators or clients to limit a prescription’s scope or withdraw an approved drug from the market could adversely affect our business and result in a loss of revenues.


Government regulators have the authority, after approving a drug, to regulate or limit its scope of prescription or withdraw it from the market completely based on safety concerns. Similarly, clients may act to voluntarily limit the scope of prescription of drugs or withdraw them from the market. In the past, we have provided services with respect to drugs that have been limited and/or withdrawn. If we are providing services to clients for drugs that are limited or withdrawn, we may be required to narrow the scope of or terminate our services with respect to such drugs, which would prevent earning the full amount of revenues anticipated under the related service contracts with negative impacts to our financial results.

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If we do not keep pace with rapid technological changes, our services may become less competitive or obsolete.

The biopharmaceutical industry is subject to rapid technological changes. Our current competitors or other businesses might develop technologies or services that are more effective or commercially attractive than, or render obsolete, our current or future technologies and services. If our competitors introduce superior technologies or services and if we cannot make enhancements to remain competitive, our competitive position would be harmed. If we are unable to compete successfully, we may lose clients or be unable to attract new clients, which could lead to a decrease in our revenue and financial condition.

Laws restricting biopharmaceutical sales and marketing practices may adversely impact demand for our services.


There have been a significant number of laws, legislative initiatives and regulatory actions over the years that seek to limit biopharmaceutical sales and marketing practices. For example, three states in 2006 and 2007 passed laws restricting the use of prescriber identifiable information for the purpose of promoting branded prescription medicines. Although these laws were subsequently declared to be unconstitutional based on a decision of the U.S. Supreme Court in Sorrell v. IMS Health in 2011, we are unable to predict whether, and in what form, other initiatives may be introduced or actions taken at the state or Federal levels to limit biopharmaceutical sales and marketing practices. In addition, while we will continue to seek to adapt our services to comply with the requirements of these laws (to the extent applicable to our services), if enacted, there can be no assurance that our efforts to adapt our offerings will be successful and provide the same financial contribution to us. There can also be no assurance that future legislative initiatives will not adversely affect our ability to develop or market current or future offerings, or that any future laws will not diminish the demand for our services, all of which could, over time, result in a material adverse impact on our operating results and financial condition.


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Our Research & Development Solutions clients face intense competition from lower cost generic products, which may lower the amount that they spend on our services.


Our Research & Development Solutions clients face increasing competition from lower cost generic products, which in turn may affect their ability to pursue research and development activities with us. In the United States, UK, EU and Japan, political pressure to reduce spending on prescription drugs has led to legislation and other measures which encourages the use of generic products. In addition, proposals emerge from time to time in the United States and other countries for legislation to further encourage the early and rapid approval of generic drugs. Loss of patent protection for a product typically is followed promptly by generic substitutes, reducing our clients’ sales of that product and their overall profitability. Availability of generic substitutes for our clients’ drugs may adversely affect their results of operations and cash flow, which in turn may mean that they would not have surplus capital to invest in research and development and drug commercialization, including in our services. If competition from generic products impacts our clients’ finances such that they decide to curtail our services, our revenues may decline and this could have a material adverse effect on our business.

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Risks Relating to Our Indebtedness


Restrictions imposed in the Senior Secured Credit Facilitiessenior secured credit facilities (as defined below) and other outstanding indebtedness, including the indentures governing IQVIA Holdings Inc. outstanding notes issued by our wholly owned subsidiary IQVIA Inc., may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.


The terms of the Senior Secured Credit Facilitiessenior secured credit facilities restrict IQVIA and its restricted subsidiaries from engaging in specified types of transactions. These covenants restrict the ability of IQVIA and its restricted subsidiaries, among other things, to:


•incur liens;


•make investments and loans;


•incur indebtedness or guarantees;


•issue preferred stock of a restricted subsidiary;


•issue disqualified equity;


•engage in mergers, acquisitions and asset sales;


•declare dividends, make payments or redeem or repurchase equity interests;


•alter the business IQVIA and its restricted subsidiaries conduct;


•make restricted payments;


•enter into agreements limiting restricted subsidiary distributions;

•

prepay, redeem or purchase certain indebtedness; and


•prepay, redeem or purchase certain indebtedness; and


•engage in certain transactions with affiliates.


In addition, the revolving credit facility and the new term A and B loans under our senior secured credit facilitythe Fifth Amended and Restated Credit Agreement (as defined below) require IQVIA to comply with a quarterly maximum senior secured net leverage ratio test and minimum interest coverage ratio test. IQVIA’s ability to comply with these financial covenants can be affected by events beyond our control, and IQVIA may not be able to satisfy them. Additionally, the restrictions contained in the indentures governing the outstanding notes could also limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans.


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A breach of any of these covenants could result in a default under the Senior Secured Credit Facilitiessenior secured credit facilities or the indentures governing the outstanding notes, which could trigger acceleration of our indebtedness and may result in the acceleration of or default under any other debt to which a cross-acceleration or cross-default provision applies, which could have a material adverse effect on our business, operations and financial results. In the event of any default under the Senior Secured Credit Facilities,senior secured credit facilities, the applicable lenders could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together with accrued and unpaid interest and any fees and other obligations, to be due and payable. In addition, or in the alternative, the applicable lenders could exercise their rights under the security documents entered into in connection with the Senior Secured Credit Facilities.senior secured credit facilities. IQVIA and the other subsidiary guarantors have pledged substantially all of their tangible and intangible assets (subject to customary exceptions) as collateral under the Senior Secured Credit Facilities,senior secured credit facilities, including the stock and the assets of certain of our current and future wholly owned United States subsidiaries and a portion of the stock of certain of our non-United States subsidiaries.


If we were unable to repay or otherwise refinance these borrowings and loans when due, the applicable lenders could proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation. In the event the applicable lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the credit agreementFifth Amended and Restated Credit Agreement governing the Senior Secured Credit Facilitiessenior secured credit facilities or the exercise by the applicable lenders of their rights under the security documents would likely have a material adverse effect on us.

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Despite our level of indebtedness, we are able to incur more debt and undertake additional obligations. Incurring such debt or undertaking such additional obligations could further exacerbate the risks to our financial condition.


Although our credit agreement,the Fifth Amended and Restated Credit Agreement, which governs the senior secured credit facilities of our wholly owned subsidiary through which we conduct our operations, IQVIA Inc. (“OpCo”), contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could increase. In addition, the receivables financing agreementfacility for one of our consolidated subsidiaries, a bankruptcy-remote special purpose subsidiary, IQVIA Funding, LLC (“IQVIA Funding”entity (the “SPE”) limits borrowing based on the amount of receivables purchased by IQVIA Fundingthe SPE from certain of our other subsidiaries, but when supported by the value of such purchased receivables, the debt under our receivables financing facility can increase.


While the credit agreementFifth Amended and Restated Credit Agreement also contains restrictions on our and our restricted subsidiaries’ ability to make loans and investments, these restrictions are subject to a number of qualifications and exceptions, and the investments incurred in compliance with these restrictions could be substantial.


Restrictive covenants in our other indebtedness may limit our flexibility in our current and future operations, particularly our ability to respond to changes in our business or to pursue our business strategies.


The terms contained in certain of our indebtedness, including credit facilities and any future indebtedness of ours, may include a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our and our restricted subsidiaries’ ability to take actions that we believe may be in our interest. These agreements, among other things, limit our ability to:


•incur additional debt;


•provide guarantees in respect of obligations of other persons;


•issue redeemable stock and preferred stock;


•pay dividends or distributions or redeem or repurchase capital stock;


•prepay, redeem or repurchase debt;


•make loans, investments and capital expenditures;


•enter into transactions with affiliates;


•create or incur liens;


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•make distributions from our subsidiaries;


•sell assets and capital stock of our subsidiaries;


•make acquisitions; and


•consolidate or merge with or into, or sell substantially all of our assets to, another person.


A breach of the covenants or restrictions under the agreements governing our other indebtedness could result in a default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event our lenders and noteholders accelerate the repayment of our borrowings, we cannot assure that we and our subsidiaries would have sufficient assets to repay such indebtedness.


Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of future financing.

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Interest rate fluctuations and our ability to deduct interest expense may affect our results of operations and financial condition.


In 2023, financial regulators in various jurisdictions, including where we have variable-rate indebtedness outstanding, increased interest rates on multiple occasions and signaled that interest rates could remain higher compared to recent years for an extended period of time in an effort to lower inflation. Because we have variable rate debt, fluctuationsincreases in interest rates will lead to increases in our borrowing costs and may adversely affect our business.results of operations and financial condition. We attempt to minimize interest rate risk and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate caps and swaps. We have entered into interest rate caps and will continue to enter into swaps with financial institutions that have reset dates and critical terms that match those of our senior secured term loan credit facility. Accordingly, any change in market value associated with the interest rate caps and swaps ismay be offset by the opposite market impact on the related debt. Because we do not attempt to hedge all of our variable rate debt, we may incur higher interest costs for the portion of our variable rate debt which is not hedged.


In addition, the deduction for our interest expense may be limited, which could have an adverse impact on our taxes and net income.


Risks Relating to Ownership of Our Common Stock

The parties to the Shareholders Agreement continue to have significant influence over us, including control over decisions that require the approval of stockholders, which could limit the ability of other stockholders to influence the outcome of matters submitted to stockholders for a vote.

As of February 12, 2018, certain parties to a Shareholders Agreement dated May 3, 2016 (the “Shareholders Agreement”) own approximately 24.9% of the outstanding shares of our common stock.

The parties to the Shareholders Agreement, other than Dr. Dennis Gillings and certain of his affiliates (the “DG Shareholders”) (who have agreed separately to vote in favor of the merger and the transactions contemplated thereby), have agreed to vote for individuals designated to the Company’s board of directors as follows:

Ari Bousbib (as our Chief Executive Officer);

one individual designated by the TPG Shareholders (as defined in the Shareholders Agreement) (until the time at which the TPG Shareholders beneficially own, as a group, less than 5% of our outstanding common stock);


another individual designated by the TPG Shareholders (until the earlier of (i) the seven year anniversary of completion of the Merger and (ii) time at which the TPG Shareholders beneficially own, as a group, 5% or more but less than 12% of our outstanding common stock);

one individual designated by each of Bain Capital Investors, LLC (“Bain Capital”), the LGP Shareholders and the CPP Shareholder (each until the earlier of (i) the day after our 2018 annual meeting of stockholders or (ii) the time at which such stockholder group beneficially owns less than 2.5% of our outstanding common stock);

four individuals who are non-stockholder, independent directors; and

until the Company’s 2018 annual meeting of stockholders, one individual designated by remaining Quintiles Nominees (as defined in the Shareholders Agreement).

The Shareholders Agreement provides that we will use our best efforts to cause Dr. Gillings to be elected as the Lead Director through our 2018 annual meeting of stockholders and to be elected as a director so that he may serve as a director until the day after our 2021 annual meeting of stockholders (provided that the DG Shareholders, as a group, continue to beneficially own at least 2.5% of our outstanding common stock), including using its best efforts to support his nomination for the slate of director nominees for a three-year term at our 2020 annual meetings of stockholders.

In 2017, the LGP Shareholders and the TPG Shareholders each ceased having the right to appoint one director to the Board. Following the secondary offering that closed on September 19, 2017, the LGP Shareholders holdings of our outstanding common stock fell below 2.5%. Following the secondary offering that closed on November 30, 2017, the TPG Shareholders holdings of our outstanding common stock fell below 12%. As a result, pursuant to the Shareholders Agreement, Mr. Danhakl offered to tender his resignation and the TPG Shareholders offered to tender the resignation of one of its two representatives on the Board. The TPG Shareholders continue to have the right to appoint one remaining director to the Board. After review, the Nominating and Governance Committee of the Board declined the offers made by Mr. Danhakl and the TPG Shareholders.

35

Even though the LGP Shareholders and the TPG Shareholders each lost the right to appoint one director to the Board, the parties to the Shareholders Agreement potentially still have the ability to influence decisions of our company to enter into any corporate transaction (and the terms thereof), any change in the composition of our board of directors and any transaction that requires stockholder approval regardless of whether others believe that such change or transaction is in the best interests of our company. Additionally, the parties to the Shareholders Agreement are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. One or more of the parties to the Shareholders Agreement may also pursue acquisition opportunities that may be complementary to our businesses and, as a result, those acquisition opportunities may not be available to us. So long as the parties to the Shareholders Agreement continue to own a significant amount of our equity, if they exercise their stockholder rights collectively, they will be able to significantly influence our decisions.

Provisions of the corporate governance documents of IQVIA could make an acquisition of IQVIA difficult and may prevent attempts by its stockholders to replace or remove its management, even if beneficial to its stockholders.

In addition to the beneficial ownership of a large percentage of IQVIA common stock by the parties to the Shareholders Agreement, our


Our certificate of incorporation and Delaware bylaws and the General Corporation Law of Delaware (“DGCL”(the “DGCL”) contain provisions that could make it difficult for a third party to acquire IQVIA even if doing so might be beneficial to its stockholders, including:


•the division of the board of directors into three classes (subject to gradual declassification which began at the 2023 annual meeting of stockholders, such that our board of directors will be fully declassified and each director will be elected to a one-year term beginning at the election2025 annual meeting of each class for three-year terms;

stockholders);

subject to the Shareholders Agreement, •the sole ability of the board of directors to fill a vacancy created by the death or resignation of a director or the expansion of the board of directors;


•advance notice requirements for stockholder proposals and director nominations;


•limitations on the ability of stockholders to call special meetings and to take action by written consent;


•the approval of holders of at least seventy-five percent (75%)a majority of the outstanding shares of IQVIA entitled to vote on any amendment, alteration, change, addition or repeal of the Delaware bylaws is required to amend, alter, change, add to or repeal the Delaware bylaws;


42

•the required approval of holders of at least seventy-five percent (75%)a majority of the outstanding shares of IQVIA to remove directors, which removal may only be for cause, subject to different requirements in the case of directors elected by a voting group of stockholderscause; and the terms of the Shareholders Agreement; and


•the ability of the board of directors to issue new series of, and designate the terms of, preferred stock, without stockholder approval, which could be used to, among other things, institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by the board of directors.


In addition, IQVIA is subject to Section 203 of the DGCL regulating corporate takeovers, although our board of directors adopted a resolution approving the Merger pursuant to which shares of common stock were acquired, by among others, the TPG Shareholders.takeovers. Section 203, subject to certain exceptions, prohibits a Delaware corporation from engaging in any “business combination” with any “interested stockholder” for a period of three years following the date that such stockholder became an interested stockholder unless:


•prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;


•upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding those shares owned by persons who are directors and also officers, and employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or


•on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.


36

In general, Section 203 defines “business combination” to include mergers or consolidations between a Delaware corporation and an interested stockholder, transactions with an interested stockholder involving the assets or stock of the corporation or its majority-owned subsidiaries and transactions which increase an interested stockholder’s percentage ownership of stock. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. These provisions may frustrate or prevent any attempts by stockholders to replace members of the board of directors. Because IQVIA’s board is responsible for appointing the members of management, these provisions could in turn affect any attempt to replace current members of management. As a result, stockholders of IQVIA may lose their ability to sell their stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change the direction or management of IQVIA may be unsuccessful.


Our operating results and share price may be volatile, which could cause the value of our stockholders’ investments to decline.


Our quarterly and annual operating results may fluctuate in the future, and such fluctuations may be significant. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. Our operating results and the trading price of our shares may fluctuate in response to various factors, including:


•market conditions in the broader stock market;


•actual or anticipated fluctuations in our quarterly and annual financial and operating results;


•introduction of new services by us or our competitors;


•issuance of new or changed securities analysts’ reports or recommendations;


•sales, or anticipated sales, of large blocks of our stock;


•additions or departures of key personnel;


•regulatory or political developments;

43


•litigation and governmental investigations;


•changing economic conditions; and


•exchange rate fluctuations.


These and other factors, many of which are beyond our control, may cause our operating results and the market price for our shares to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall.

As of February 12, 2018, there were 208,251,468 shares of common stock outstanding. Approximately 24.9% of the outstanding shares of our common stock is held by parties to the Shareholders Agreement.  

Sales of substantial amounts of our common stock in the public market, or the perception that such sales will occur, could adversely affect the market price of our common stock and make it difficult for us to raise funds through securities offerings in the future. For example, as restrictions on resale end, the market price of our common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

37

Stockholders that are a party to the Shareholders Agreement may require us to register their shares for resale under the federal securities laws, subject to certain requirements. Under the Shareholders Agreement, we are required to pay the registration expenses associated with the registration of such shares, not including the underwriting discounts, commissions and transfer taxes. Registration of those shares would allow those stockholders to immediately resell their shares in the public market. Any such sales or the anticipation of such sales may cause the market price of our common stock to decline. In 2017, the parties to the Shareholders Agreement sold approximately 47.2 million shares of our common stock, of which we repurchased approximately 19.7 million shares.  

In addition, we may use our cash, cash generated from operations or dispositions of assets or businesses and/or proceeds from any new financing arrangements or issuances of debt or equity securities to repurchase shares, including the repurchase of shares from our stockholders that are a party to the Shareholders Agreement.


Since we have no current plans to pay regular cash dividends on our common stock, stockholders may not receive any return on investment unless they sell their common stock for a price greater than that which they paid for it.

Although we have previously declared dividends to our stockholders prior to our initial public offering in May 2013, we


We do not currently anticipate paying any regular cash dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur, including under our existing credit facilities. Therefore, any return on investment in our common stock is solely dependent upon the appreciation of the price of our common stock on the open market, which may not occur.


Our certificate of incorporation contains a provision renouncing any interest and expectancy in certain corporate opportunities identified by certain of our affiliates,parties, even if such corporate opportunities are ones that we might reasonably be deemed to have pursued or had the ability or desire to pursue.


Our certificate of incorporation provides that our companyIQVIA renounces any interest or expectancy in the business opportunities of the TPG Shareholders,Global, LLC, the Bain Capital, LLC, CPP Investment Board Private Holdings Inc. (“CPP Shareholder”), and Leonard Green & Partners, L.P. (“LGP Shareholders”), and their affiliates (other than our companyCompany and our subsidiaries) and all of their respective partners, principals, directors, officers, members, managers, managing directors and/or employees, and each such person will have no obligation to offer us such opportunities. This provision applies to each of these current or former stockholders (and associated parties) only for so long as a nominee designated by thesuch stockholder under the Shareholders Agreement continues to serve on our board of directors and no individual serving our board of directors has at any time been designated as a nominee by such stockholder under the board.Shareholders Agreement. Stockholders are deemed to have notice of and have consented to this provision of our certificate of incorporation.


Therefore, a director or officer of our companyCompany who also serves as a director, officer, member, manager, or employee of such stockholders may pursue certain business opportunities, including acquisitions, that may be complementary to its business and, as a result, such opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on the business, financial condition, results of operations, or prospects of our companyCompany if attractive corporate opportunities are allocated by such stockholders to themselves or their other affiliates instead of to us.


Item 1B. Unresolved Staff Comments


None.


44

Item 1C. Cybersecurity

Our Board actively oversees our enterprise risk management program. Our Board’s role in risk oversight is consistent with our overall leadership structure: management is responsible for assessing and managing our short- and long-term risk exposures, and our Board and its committees provide effective oversight through independent monitoring of strategic risks and regularly scheduled meetings with management to discuss in-depth the strategic objectives of the Company and associated risks. In order to maintain effective Board oversight across the entire enterprise risk management program, the Board delegates to the individual committees certain elements of its oversight function. The Audit Committee of the Board has oversight of cybersecurity risk and receives regular updates on any developments from our Chief Information Security Officer (“CISO”), including biannual updates on strategies and action plans, with periodic reports provided to our full Board.

We have an Enterprise Risk Council made up of leaders from our principal functional areas and business units that meets on a quarterly basis to update our enterprise risk framework used to identify and manage our key risks, including cybersecurity. Cybersecurity is a standing item on our Enterprise Risk Council agenda and our cybersecurity team regularly presents its work to the Enterprise Risk Council to enable evolving risks to be integrated into our management processes. All cybersecurity processes and frameworks are created by the Global Information Security team, led by our CISO. Our CISO has a Systems Engineer degree in Computer Science from St. Petersburg University of Information Technology and gained experience in the manufacturing, consultancy, and energy industries prior to joining the Company in 2012. Our CISO is a Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM), Information Technology Infrastructure Library (ITIL) v3 Expert, and Certified in Risk and Information Systems Control (CRISC).

Our Integrated Information Security Framework ("IISF") defines the policies and processes we have in place to safeguard proprietary and confidential information. Our IISF is based on relevant industry frameworks and laws, including, but not limited to National Institute of Standards and Technology ("NIST"), Good Practices Quality Guidelines (GxP), Health Information Trust Alliance (HITRUST), the ISMS Family of Standards (ISO 27000 family), Control Objectives for Information Technologies (COBIT), the EU General Data Protection Regulation (GDPR), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The framework consists of policies, standards, procedures, work instructions and documentation. Information is classified into four categories to help individuals apply the right level of controls and safeguards to information, applications and systems. In 2023, we conducted a mapping with the NIST to align our procedures with industry standards in an effort to create a first-in-class approach. Our global data centers and IT controls are included in an annual SOC2 Type II attestation program carried out by an independent audit firm who performs control testing and issue reports. Our set of SOC2 controls is aligned with ISO27001 specification and therefore provides an equivalent level of assurance on a global level. Additionally, our cybersecurity controls are regularly assessed as part of our global Internal Audit plan, and the maturity of our Information Security program is also regularly assessed on at least an annual basis with the help of independent consultants.

Our internal Business Information Security Office ("BISO"), established in 2022, continues to streamline communications between our IT function and business units. The BISO connects several key functions, including Chief Information Officer Business Partnership, business continuity, governance, risk, and compliance.

Our cybersecurity program focuses on all areas of our business, including cloud-based environments, data centers, devices used by employees and contractors, facilities, networks, applications, vendors, disaster recovery / business continuity and controls and safeguards enabled through business processes and tools. We continuously monitor for threats and unauthorized access. We learn of security threats through automated detection solutions as well as reports from users and business partners. We draw on the knowledge and insight of external cybersecurity experts and vendors and employ an array of third party tools to secure IQVIA information infrastructure and protect systems and information from unauthorized access. We manage risk in our supply chain through engagement with suppliers and vendors, including vendor on-boarding risk assessments, ongoing oversight, and independent cyber-reputation score monitoring for key suppliers.

45

Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents. To protect against such threats, we employ an array of data security technologies, processes and methods across our infrastructure to protect systems and sensitive information from unauthorized access. We maintain comprehensive identity and access management practices (e.g., roles and access privileges for each user; multi-factor authentication, privileged user accounts, single sign-on, user lifecycle management) and employ a variety of security information and event management tools. Non-technical safeguards also play an important role in our cybersecurity program. We provide various training programs and tools to employees so they can avoid risky practices and help us promptly identify potential or actual issues. We also have global incident response procedures, global service tools to log incidents and issues for investigation, and an ethics line to report concerns and follow-up on matters already reported. For more information on our cybersecurity related risks, see Item 1A Risk Factors in this Annual Report on Form 10-K.

Item 2. Properties


As of December 31, 2017,2023, we had approximately 282291 offices and laboratories located in approximately 8385 countries. Our executive headquarters are located adjacent toin Research Triangle Park, North Carolina, and in Danbury, Connecticut.Carolina. We own facilities in Barcelona, Spain; Buenos Aires, Argentina; Caracas, Venezuela; Los Ruices, Venezuela; Lisbon, Portugal and Bangalore, India. All of our other offices are leased. Our properties are geographically distributed to meet our worldwide operating requirements, and none of our properties are individually material to our business operations. Many of our leases have an option to renew, and we believe that we will be able to successfully renew expiring leases on terms satisfactory to us. We believe that collectively our facilities are suitable and adequate for our operationspresent purposes. We continue to assess the impacts of the current working environment on the suitability, adequacy, productive capacity and that suitable additional space will be available if needed.utilization of our existing principal physical properties, and we are in the process of evaluating the future state of our workforce practices, which may result in changes to our physical property needs.

38

Item 3. Legal Proceedings

We are involved in a variety of


Information pertaining to legal and tax proceedings claims and litigation that arise from time to time in the ordinary course of business. These actions may be commenced by various parties, including competitors, clients, current or former employees, government agencies or others. We record a provision with respect to a proceeding, claim or litigation when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. However, evenfound in instances where we have recorded an estimated liability, we are unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect our operating results, financial position or cash flows. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

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

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

Our wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services under contracts with the United States government. United States government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the United States government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract (the “GSA Contract”) which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). The potential noncompliance arose from two primary areas: first, at the direction of the government, work performed under one task order was invoiced under another task order without the appropriate modifications to the orders being made; and second, personnel who did not meet strict compliance with the labor categories component of the qualification requirements of the GSA Contract were assigned to contracts. Upon discovery of the potential noncompliance, we began remediation efforts, promptly disclosed the potential noncompliance to the United States government, and were accepted into the Department of Defense Voluntary Disclosure Program. We filed a Voluntary Disclosure Program Report on August 29, 2008. We are currently unable to determine the outcome of all of these matters pending the resolution of the Voluntary Disclosure Program process and the ultimate liability arising from these matters could exceed our current reserves.

On February 13, 2014, a group of approximately 1,200 medical doctors and 900 private individuals filed a civil lawsuit with the Seoul Central District Court against IMS Korea and two other defendants, KPA and the Korean Pharmaceutical Information Center (“KPIC”). The civil lawsuit alleges KPA and KPIC collected their personal information in violation of applicable privacy laws without the necessary consent through a software system installed on pharmacy computer systems in Korea, and that personal information was transferred to IMS Korea and sold to pharmaceutical companies. On September 11, 2017, the District Court issued a final decision that the encryption in use by the defendants since June 2014 was adequate to meet the requirements of the Korean Personal Information Privacy Act (“PIPA”) and the sharing of non-identified information for market research purposes was allowed under PIPA. The District Court also found an earlier version of encryption was insufficient to meet PIPA requirements, but no personal data had been leaked or re-identified. The District Court did not award any damages to plaintiffs. Approximately 280 medical doctors and 200 private individuals appealed the District Court decision. The Company believes the appeal is without merit and intends to vigorously defend its position.    

 On July 23, 2015, indictments were issued by the Seoul Central District Prosecutors’ Office in South Korea against 24 individuals and companies alleging improper handling of sensitive health information in violation of, among others, South Korea’s Personal Information Protection Act. IMS Korea and two of its employees were among the individuals and organizations indicted. Although there is no assertion that IMS Korea used patient identified health information in any of its offerings, prosecutors allege that certain of IMS Korea’s data suppliers should have obtained patient consent when they converted sensitive patient information into non-identified data and that IMS Korea had not taken adequate precautions to reduce the risk of re-identification. We believe the indictment is without merit that we acted in compliance with all applicable laws at all times and intend to vigorously defend our position.

39

On January 10, 2017, IQVIA Inc., IMS Health Incorporated and IMS Software Services, Inc. (collectively “IQVIA Parties”) filed a lawsuit in the U.S. District Court for the District of New Jersey against Veeva Systems, Inc. (“Veeva”) alleging Veeva unlawfully used IQVIA Parties intellectual property to improve Veeva data offerings, to promote and market Veeva data offerings and to improve Veeva technology offerings. IQVIA Parties seek injunctive relief, appointment of a monitor, the award of compensatory and punitive damages and reimbursement of all litigation expenses, including reasonable attorneys’ fees and costs. On March 13, 2017, Veeva filed counterclaims alleging anticompetitive business practices in violation of the Sherman Act and state laws. Veeva claims damages in excess of $200 million, and is seeking punitive damages and litigation costs, including attorneys’ fees. We believe the counterclaims are without merit, reject all counterclaims raised by Veeva and intend to vigorously defend IQVIA Parties’ position and pursue our claims against Veeva.

For additional information, see Note 1312 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

10-K and is incorporated by reference herein.


Item 4. Mine Safety Disclosures


Not applicable.


40

46


PART II


Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Market Information for Common Stock


Our common stock trades on the NYSE under the symbol “IQV.” The following table sets forth the high and low sales prices per share of our common stock as reported by the NYSE for the periods indicated.

 

 

High

 

 

Low

 

Fiscal Year 2016

 

 

 

 

 

 

 

 

First Quarter

 

$

67.92

 

 

$

55.01

 

Second Quarter

 

$

71.44

 

 

$

61.21

 

Third Quarter

 

$

81.26

 

 

$

65.01

 

Fourth Quarter

 

$

81.45

 

 

$

70.10

 


 

 

High

 

 

Low

 

Fiscal Year 2017

 

 

 

 

 

 

 

 

First Quarter

 

$

83.04

 

 

$

74.80

 

Second Quarter

 

$

91.81

 

 

$

78.07

 

Third Quarter

 

$

99.95

 

 

$

87.45

 

Fourth Quarter

 

$

110.67

 

 

$

94.28

 

Holders of Record


On February 12, 2018,5, 2024, we had approximately 4615 stockholders of record as reported by our transfer agent. Holders of record are defined as those stockholders whose shares are registered in their names in our stock records and do not include beneficial owners of common stock whose shares are held in the names of brokers, dealers or clearing agencies.


Dividend Policy


We do not currently intend to pay dividends on our common stock, and no dividends were declared or paid in 2017 2023or 2016.2022. However, we expect to reevaluate our dividend policy on a regular basis and may, subject to compliance with the covenants contained in our credit facilitiesSenior Secured Credit Facilities and long-term debt arrangements and other considerations, determine to pay dividends in the future. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our Board of Directors (our "Board"), which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our Board may deem relevant. Our long-term debt arrangements contain usual and customary restrictive covenants that, among other things, place limitations on our ability to declare dividends. For additional information regarding these restrictive covenants, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 1110 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.


Recent Sales of Unregistered Securities


We did not sell any unregistered equity securities in 2017. 2023.

41

Purchases of Equity Securities by the Issuer


On October 30, 2013, our Board approved thean equity repurchase program (the “Repurchase Program”) authorizing the repurchase of up to $125.0$125 million of either our common stock or vested in-the-money employee stock options, or a combination thereof (the “Repurchase Program”).stock. Our Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of our common stock by $600.0$600 million, $1.5 billion, $1.0$2.0 billion, $1.5 billion, $2.0 billion, and $1.0$2.0 billion in 2015, November 2016, February 2017, 2018, 2019, and May 2017, respectively,2022, respectively. On July 31, 2023, our Board increased the stock repurchase authorization under the Repurchase Program by an additional $2,000 million, which increased the total amount that has been authorized under the Repurchase Program to $4.225 billion.$11,725 million. The Repurchase Program does not obligate us to repurchase any particular amount of common stock, or vested in-the-money employee stock options, and it may be modified, extended, suspended or discontinued at any time. The timing and amount of repurchases are determined by our management based on a variety of factors such as the market price of our common stock, our corporate requirements, and overall market conditions. Purchases of our common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or in privately negotiated transactions. We may also repurchase shares of our common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act, which would permit shares of our common stock to be repurchased when we might otherwise be precluded from doing so by law. Repurchases of vested in-the-money employee stock options were made through transactions between us and our employees (other than our executive officers, who were not eligible to participate in the program), and this aspect of the Repurchase Program expired in November 2013. The Repurchase Program for common stock does not have an expiration date.

Since In addition, from time to time, we have repurchased and may continue to repurchase common stock through private or other transactions outside of the Merger,Repurchase Program.


From inception of the Repurchase Program through December 31, 2023, we have repurchased a total of $9,362 million of our securities under the Repurchase Program.

During the year ended December 31, 2023, we repurchased 43.75.0 million shares of our common stock at an average market price per share of $82.76 for an aggregate purchase price of $3,620approximately $992 million both under and outside of the Repurchase Program. These amounts include 9,677,420 shares of our common stock which we repurchased from certain of our principal stockholders in a private transaction for approximately $750 million and 10,071,003 shares of our common stock which we repurchased directly from underwriters in connection with three separate underwritten, secondary public offerings of shares of our common stock held by certain of our principal stockholders for approximately $935 million in the aggregate in May, September and November 2017. For additional information regarding our equity repurchases, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 1413 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

From inception of the Repurchase Program through December 31, 2017, we have repurchased a total of $4,043 million of our securities under the Repurchase Program consisting of $59 million of stock options and $3,984 million of common stock.  


47

As of December 31, 2017,2023, we havehad remaining authorization to repurchase up to $182approximately $2,363 million of our common stock under the Repurchase Program. In addition, from time to time,

Since the Merger between Quintiles and IMS health in October 2016, we have repurchased and may continue to repurchase78.1 million shares of our common stock through private or other transactionsat an average market price per share of $115.02 for an aggregate purchase price of $8,988 million both under and outside of the Repurchase Program. On February 14, 2018, the Board authorized an increase in the post-merger share repurchase authorization by $1.5 billion to a total of $5.0 billion, with $1.7 billion authorization remaining.

The following table summarizes the monthly equity repurchase program activity for the three months ended December 31, 2017 and the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program. In addition, the tableThis includes shares repurchased outside the Repurchase Program and shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Quintiles IMSIQVIA Holdings Inc. 2017 Incentive and Stock Award Plan (“the Plan”(the “Plan”). The Plan provides for the withholding of shares to satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common stock withheld to satisfy tax withholding obligations may be deemed to be “issuer purchases” of shares that are required to be disclosed pursuant to this Item.

Period

 

Total Number of

Shares Purchased(1)

 

 

Average Price

Paid per Share

 

 

Total Number of

Shares Purchased as

Part of Publicly

Announced

Plans or Programs

 

 

Approximate Dollar

Value of Shares That

May Yet Be Purchased

Under the Plans or Programs

 

 

 

(in millions, except per share data)

 

October 1, 2017 – October 31, 2017

 

 

—

 

 

$

—

 

 

 

—

 

 

$

295

 

November 1, 2017 – November 30, 2017

 

 

3.6

 

 

$

102.39

 

 

 

1.1

 

 

$

187

 

December 1, 2017 – December 31, 2017

 

 

0.1

 

 

$

99.06

 

 

 

—

 

 

$

182

 

 

 

 

3.7

 

 

 

 

 

 

 

1.1

 

 

 

 

 


(1)During

The following table summarizes the monthly equity repurchase activity for the three months ended December 31, 2017,2023 and the Company repurchased 2.5 millionapproximate dollar value of shares outsidethat may yet be purchased pursuant to the Repurchase program which were retired and approximately 0.1 million shares were withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Plan.

42

During the year ended December 31, 2017, we repurchased 30.9 million shares of our common stock at an average market price per share of $84.80 for an aggregate purchase price of $2,620 million both under and outside of the Repurchase Program, which includes approximately 19.7 million shares from our sponsors.

Program.

PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced
Plans or Programs		Approximate Dollar Value of Shares That May Yet Be
Purchased Under the
Plans or Programs
(in millions, except per share data)
October 1, 2023 – October 31, 2023—$— —$2,592 
November 1, 2023 – November 30, 20231.2$195.06 1.2$2,363 
December 1, 2023 – December 31, 2023—$— —$2,363 
1.21.2

Stock Performance Graph


This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing of IQVIA Holdings Inc. under the Exchange Act or under the Securities Act, except as shall be expressly set forth by specific reference in such filing.


The following graph shows a comparison from May 9, 2013 (the date our common stock commenced trading on the NYSE)December 31, 2018 through December 31, 20172023 of the cumulative total return for our common stock, the Standard & Poor’s 500 Stock Index (“S&P 500”) and a select peer group. The, our new peer group set forth below ("New Peer Group"), and our old peer group set forth below ("Old Peer Group"). The New Peer Group consists of Cerner Corporation, Charles River Laboratories, Inc., Dun & Bradstreet Corporation, EquifaxFortrea Holdings Inc., ICON plc, IHS Markit Ltd.Medpace Holdings Inc., S&P Global Inc., Danaher Corporation and Thermo Fisher Scientific Inc. The difference between the New Peer Group and the Old Peer Group is that Laboratory Corporation of America Holdings, Nielsen N.V., PRA Health Sciences, Inc., Syneos Health, (formerly INC Research Holdings)Equifax Inc., Thomson Reuters Corporation and Verisk Analytics, Inc. have been removed from the New Peer Group as these companies were either spun-off, acquired by a private equity consortium or not relevant anymore during the year ended December 31, 2023. Simultaneously, Fortrea Holdings Inc., Medpace Holdings Inc., S&P Global Inc., Danaher Corporation and Thermo Fisher Scientific Inc. were added to the New Peer Group during the year ended December 31, 2023. The companies in our peer groupgroups are publicly traded information services, information technology or contractclinical research companies, and thus share similar business model characteristics to IQVIA, or provide services to similar customers as IQVIA. Many of these companies are also used by our compensation committee for purposes of compensation benchmarking.


The graph assumes that $100 was invested in IQVIA, the S&P 500, the New Peer Group, and the peer groupOld Peer Group as of the close of market on May 9, 2013,December 31, 2018, and assumes the reinvestments of dividends, if any. The S&P 500 and our peer groupNew and Old Peer Groups are included for comparative purposes only. They do not necessarily reflect management’s opinion that the S&P 500 and our peer groupgroups are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of our common stock.

 

 

5/9/2013

 

 

12/31/2013

 

 

12/31/2014

 

 

12/31/2015

 

 

12/31/2016

 

 

12/31/2017

 

IQVIA

 

$

100

 

 

$

110

 

 

$

140

 

 

$

163

 

 

$

181

 

 

$

233

 

Peer Group

 

$

100

 

 

$

115

 

 

$

127

 

 

$

139

 

 

$

143

 

 

$

163

 

S&P 500

 

$

100

 

 

$

114

 

 

$

127

 

 

$

126

 

 

$

138

 

 

$

164

 


48

43

7540


12/31/201812/31/201912/31/202012/31/202112/31/202212/31/2023
IQVIA$100 $133 $154 $243 $176 $199 
S&P 500$100 $131 $156 $200 $164 $207 
New Peer Group$100 $150 $209 $305 $241 $257 
Old Peer Group$100 $143 $183 $261 $196 $256 

Item 6. Selected Financial Data

We have derived the following consolidated statements of income data for 2017, 2016 and 2015 and consolidated balance sheet data as of December 31, 2017 and 2016 from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We have derived the following consolidated statements of income data for 2014 and 2013 and consolidated balance sheet data as of December 31, 2015, 2014 and 2013 from our audited consolidated financial statements not included in this Annual Report on Form 10-K. You should read the consolidated financial data set forth below in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K and the information under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” On October 3, 2016, we completed a merger of equals transaction with IMS Health. Pursuant to the terms of the merger agreement dated as of May 3, 2016 between Quintiles and IMS Health, IMS Health was merged with and into Quintiles, and the separate corporate existence of IMS Health ceased, with Quintiles continuing as the surviving corporation. We have included the results of operations of acquired businesses, including IMS Health, from the date of acquisition. As a result, our period to period results of operations vary depending on the dates and sizes of the acquisitions. Accordingly, this selected financial data is not necessarily comparable or indicative of our future results. You should read this selected consolidated financial data in conjunction with our audited consolidated financial statements and related footnotes included elsewhere in this Annual Report on Form 10-K.

 

 

Year Ended December 31,

 

(in millions, except per share data)

 

2017

 

 

2016(4)

 

 

2015

 

 

2014

 

 

2013

 

Statement of Income Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

8,060

 

 

$

5,364

 

 

$

4,326

 

 

$

4,165

 

 

$

3,808

 

Reimbursed expenses

 

 

1,679

 

 

 

1,514

 

 

 

1,411

 

 

 

1,295

 

 

 

1,291

 

Total revenues

 

 

9,739

 

 

 

6,878

 

 

 

5,737

 

 

 

5,460

 

 

 

5,099

 

Costs of revenue, exclusive of depreciation and

   amortization

 

 

4,622

 

 

 

3,236

 

 

 

2,705

 

 

 

2,664

 

 

 

2,452

 

Costs of revenue, reimbursed expenses

 

 

1,679

 

 

 

1,514

 

 

 

1,411

 

 

 

1,295

 

 

 

1,291

 

Selling, general and administrative expenses

 

 

1,605

 

 

 

1,011

 

 

 

815

 

 

 

781

 

 

 

772

 

Depreciation and amortization

 

 

1,011

 

 

 

289

 

 

 

128

 

 

 

121

 

 

 

108

 

Restructuring costs

 

 

63

 

 

 

71

 

 

 

30

 

 

 

9

 

 

 

14

 

Merger related costs(1)

 

 

—

 

 

 

87

 

 

 

—

 

 

 

—

 

 

 

—

 

Impairment charges(2)

 

 

40

 

 

 

28

 

 

 

2

 

 

 

—

 

 

 

—

 

Income from operations

 

 

719

 

 

 

642

 

 

 

646

 

 

 

590

 

 

 

462

 

Interest expense, net

 

 

339

 

 

 

140

 

 

 

97

 

 

 

97

 

 

 

119

 

Loss on extinguishment of debt

 

 

19

 

 

 

31

 

 

 

8

 

 

 

—

 

 

 

20

 

Other expense (income), net

 

 

30

 

 

 

(8

)

 

 

2

 

 

 

(8

)

 

 

—

 

Income before income taxes and equity in earnings

   (losses) of unconsolidated affiliates

 

 

331

 

 

 

479

 

 

 

539

 

 

 

501

 

 

 

323

 

Income tax (benefit) expense(3)

 

 

(987

)

 

 

345

 

 

 

159

 

 

 

149

 

 

 

96

 

Income before equity in earnings (losses) of

   unconsolidated affiliates

 

 

1,318

 

 

 

134

 

 

 

380

 

 

 

352

 

 

 

227

 

Equity in earnings (losses) of unconsolidated affiliates

 

 

10

 

 

 

(4

)

 

 

8

 

 

 

5

 

 

 

(1

)

Net income

 

 

1,328

 

 

 

130

 

 

 

388

 

 

 

357

 

 

 

226

 

Net (income) loss attributable to non-controlling interests

 

 

(19

)

 

 

(15

)

 

 

(1

)

 

 

—

 

 

 

1

 

Net income attributable to IQVIA Holdings Inc.

 

$

1,309

 

 

$

115

 

 

$

387

 

 

$

357

 

 

$

227

 

 

 

Year Ended December 31,

 

(in millions, except per share data)

 

2017

 

 

2016(4)

 

 

2015

 

 

2014

 

 

2013

 

Earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

6.01

 

 

$

0.77

 

 

$

3.15

 

 

$

2.78

 

 

$

1.83

 

Diluted

 

$

5.88

 

 

$

0.76

 

 

$

3.08

 

 

$

2.72

 

 

$

1.77

 

Cash dividends declared per common share

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

217.8

 

 

 

149.1

 

 

 

123.0

 

 

 

128.0

 

 

 

124.1

 

Diluted

 

 

222.6

 

 

 

152.0

 

 

 

125.6

 

 

 

131.1

 

 

 

127.9

 


44

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016(4)

 

 

2015

 

 

2014

 

 

2013

 

Statement of Cash Flow Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

970

 

 

$

860

 

 

$

476

 

 

$

433

 

 

$

393

 

Investing activities

 

 

(1,190

)

 

 

1,731

 

 

 

(67

)

 

 

(173

)

 

 

(236

)

Financing activities

 

 

(72

)

 

 

(2,284

)

 

 

(249

)

 

 

(130

)

 

 

71

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

(369

)

 

$

(164

)

 

$

(78

)

 

$

(83

)

 

$

(88

)

Cash dividend paid to common stockholders

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

As of December 31,

 

(in millions)

 

2017

 

 

2016(4)

 

 

2015

 

 

2014

 

 

2013

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

959

 

 

$

1,198

 

 

$

977

 

 

$

867

 

 

$

777

 

Investments in debt, equity and other securities

 

 

54

 

 

 

53

 

 

 

33

 

 

 

35

 

 

 

40

 

Trade accounts receivable and unbilled services, net

 

 

1,993

 

 

 

1,707

 

 

 

1,166

 

 

 

975

 

 

 

924

 

Property and equipment, net

 

 

440

 

 

 

406

 

 

 

188

 

 

 

190

 

 

 

200

 

Total assets

 

 

22,742

 

 

 

21,208

 

 

 

3,926

 

 

 

3,296

 

 

 

3,054

 

Total long-term liabilities

 

 

11,480

 

 

 

9,643

 

 

 

2,668

 

 

 

2,528

 

 

 

2,239

 

Total debt(5)

 

 

10,269

 

 

 

7,219

 

 

 

2,501

 

 

 

2,306

 

 

 

2,061

 

Total stockholders’ equity (deficit)

 

 

8,358

 

 

 

8,860

 

 

 

(336

)

 

 

(704

)

 

 

(667

)

(1)

Merger related costs include the direct and incremental costs associated with our merger with IMS Health Holdings, Inc., on October 3, 2016 (the “Merger”).

[Reserved]

(2)

In 2017, we recognized $40 million of impairment losses for declines in fair value of goodwill ($39.6 million) and identifiable intangible assets ($0.4 million) in Encore, which we sold in the third quarter of 2017. In 2016, we recognized $28 million of impairment losses for declines in fair value of goodwill ($23 million) and identifiable intangible assets ($5 million) in Encore. In 2015, we wrote down $2 million related to long-lived assets.


(3)

Income tax expense in 2017 includes $(977) million related to the enactment of the Tax Act and $(261) million related to purchase accounting amortization as a result of the Merger. Income tax expense in 2016 includes $252 million related to a change in our indefinitely reinvested assertion on our cumulative foreign earnings as a result of the Merger.

(4)

Includes the acquisition of IMS Health effective October 3, 2016.

(5)

Excludes $44 million, $19 million, $33 million, $22 million and $28 million of unamortized discounts and debt issuance costs as of December 31, 2017, 2016, 2015, 2014 and 2013.


45

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations


You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.


49

Overview

We are


IQVIA is a leading global provider of information, innovativeadvanced analytics, technology solutions and contractclinical research services focused on helping healthcare clients find better solutions for patients. Formed through the Merger of IMS Health and Quintiles, we apply human data science – leveraging the analytic rigor and clarity of data science to the ever-expanding scopelife sciences industry. IQVIA creates intelligent connections across all aspects of human science –healthcare through its analytics, transformative technology, big data resources, extensive domain expertise and network of partners. IQVIA Connected Intelligence delivers actionable insights and powerful solutions with speed and agility — enabling customers to enable companies to reimagine and develop new approaches toaccelerate the clinical development and commercialization speed innovation, and accelerate improvements inof innovative medical treatments that improve healthcare outcomes. Powered by the IQVIA CORE™, we deliver unique and actionable insights at the intersection of large scale analytics, transformative technology and extensive domain expertise, as well as execution capabilities to help biotech, medical device, and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances, in an effort to advance their path toward cures.outcomes for patients. With more than 55,000approximately 87,000 employees, we conduct operations in more than 100 countries.

The Company is


We are managed through three reportable segments, Commercialsegments: Technology & Analytics Solutions, Research & Development Solutions and Integrated Engagement Services. CommercialContract Sales & Medical Solutions. Technology & Analytics Solutions provides mission critical information, technology solutions and real-worldreal world insights and services to our life science clients. Research & Development Solutions, which primarily serves biopharmaceutical clients, is engaged in research and development and provides outsourced clinical research and clinical trial services. Integrated Engagement ServicesContract Sales & Medical Solutions provides health care provider (including contract salessales) and patient engagement services to both biopharmaceutical clients and the broader healthcare market.


For a description of our service offerings within our segments, refer to “Business” within Part I, Item 1, “Business.”

Throughout 2023 we experienced strong demand and operational results for our Research & Development Solutions offerings. Our Technology & Analytics Solutions offerings were relatively more impacted by a tougher macro environment, including more cautious spending by our clients on extended timelines than what we have experienced in the past. We experienced growth in certain Technology & Analytics Solutions offerings, such as multi-channel marketing and real world solutions. Our targeted productivity initiatives contributed to overall net income and earnings per share growth, and we ended the year with our highest ever remaining performance obligations of this Annual Report on Form 10-K.

approximately $31.7 billion as of December 31, 2023.


While we experienced a decline in COVID-19 related work in 2023 versus 2022, overall COVID-19 related work was not material to operations. As of December 31, 2023, COVID-19 related work did not represent a material amount of our remaining performance obligations.

We continue to maintain strong liquidity. As of December 31, 2023, cash and cash equivalents were $1,376 million and we had $100 million drawn under our $2,000 million revolving credit facility. As of December 31, 2023, we were in compliance with the financial covenants under our debt agreements in all material respects and do not have material uncertainty about ongoing ability to meet the covenants of our credit arrangements.

Industry Outlook


For information about the industry outlook and markets that we operate in, refer to “Our Market Outlook” within Part I, Item I, of this Annual Report on Form 10-K.

“Our Market Opportunity.”


Business Combinations


We have completed and will continue to consider strategic business combinations to enhance our capabilities and offerings in certain areas, including several various individually immaterial acquisitions during the years ended December 31, 20172023 and 2016. In October 2016, we completed the Merger to better serve our clients across their entire product lifecycle by (i) increasing the efficiency of healthcare companies’ commercial organizations through enhanced analytics and outsourcing services; (ii) improving clinical trial design, recruitment, and execution; and (iii) creating real-world information solutions based on the use of medicines by actual patients in normal situations. In July 2015, we combined our global clinical trials laboratory operations in our Research & Development Solutions segment with the clinical trials laboratory operations of Quest with the resulting combined business referred to as Q2 Solutions. We own 60% of Q2 Solutions and Quest owns the remaining 40%.

2022. These transactions were accounted for as business combinations and the acquired results of operations are included in our consolidated financial information since the acquisition date with a non-controlling interest for the portion that we do not own.their respective closing dates. See Note 1514 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to these business combinations.

46


Sources of Revenue

Revenues


Total revenues are comprised of revenues from the provision of our services and revenues from reimbursed expenses that are incurred while providing our services. We do not have any material product revenues. Our segment revenues expressed as a percent of 2017 revenues (excluding reimbursed expense revenue) are as follows:

Commercial Solutions

45.0

%

Research & Development Solutions

45.3

%

Integrated Engagement Services

9.7

%


Reimbursed expenses are comprised primarily of payments to physicians (investigators) who oversee clinical trials and travel expenses for our clinical monitors principally within our Research & Development Solutions segment and travel expenses for our sales representatives within our Integrated Engagement Services segment. Reimbursed expenses may fluctuate from period-to-period due, in part, to where we are in the lifecycle of the many contracts that are in progress at a particular point in time. As reimbursed expenses are pass-through costs to our clients with little to no profit and we believe that the fluctuations from period-to-period are not meaningful to our underlying performance, we do not provide any analysis of the fluctuations in these items or their impact on our financial results. We have collection risk on contractually reimbursable expenses, and, from time to time, are unable to obtain reimbursement from the client for costs incurred. When such an expense is not reimbursed, it is classified as costs of revenue on the consolidated statements of income.

See Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for details regarding the new revenue recognition standard, which will be effective January 1, 2018.

50

Costs and Expenses


Our costs and expenses are comprised primarily of our costscost of revenue,revenues including reimbursed expenses and selling, general and administrative expenses. CostsCost of revenue includerevenues includes compensation and benefits for billable employees and personnel involved in production, trial monitoring, data management and delivery, and the costs of acquiring and processing data for our information offerings; costs of staff directly involved with delivering technology-related services offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements; and other expenses directly related to service contracts such as courier fees, laboratory supplies, professional services and travel expenses. As noted above, reimbursedReimbursed expenses, which are included in cost of revenues, are comprised principally of payments to investigators who oversee clinical trials and travel expenses for our clinical monitors and sales representatives. Selling, general and administrative expenses include costs related to sales, marketing and administrative functions (including human resources, legal, finance, quality assurance, compliance and general management) for compensation and benefits, travel, professional services, training and expenses for information technology (“IT”), facilities and facilities. We also incur costs and expenses associated with depreciation and amortization.


Foreign Currency Translation


In 2017,2023, approximately 41%30% of our revenues were denominated in currencies other than the United States dollar, which represents approximately 5560 currencies. Because a large portion of our revenues and expenses are denominated in foreign currencies other than the United States dollar and our financial statements are reported in United States dollars, changes in foreign currency exchange rates can significantly affect our results of operations. The revenuerevenues and expenses of our foreign operations are generally denominated in local currencies and translated into United States dollars for financial reporting purposes. Accordingly, exchange rate fluctuations will affect the translation of foreign results into United States dollars for purposes of reporting our consolidated results. As a result, we believe that providingreporting results of operations that exclude the impacteffects of fluctuations in foreign currency ratesrate fluctuations on certain financial results can facilitate the analysis of period-to-period comparisons of business performance that excludes the effects of foreign currency rate fluctuations. Theperiod to period comparisons. This constant currency information assumes the same foreign currency exchange rates that were in effect for the comparable prior-year period were used in translation of the current period results. As such, the differences noted below between reported results of operations and constant currency information is wholly attributable to the effects of foreign currency rate fluctuations.

47

Consolidated Results of Operations


For information regarding our results of operations for Commercialour Technology & Analytics Solutions, Research & Development Solutions and Integrated Engagement Services,Contract Sales & Medical Solutions segments, refer to “Segment Results of Operations” later in this section.


For a discussion of our results of operations comparison for 2022 and 2021, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed on February 15, 2023.

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

Year Ended December 31,

 

 

2017 vs. 2016

 

 

2016 vs. 2015

 

Year Ended December 31,Year Ended December 31,Change
2023 vs. 20222023 vs. 20222022 vs. 2021

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

 

$

 

 

%

 

 

$

 

 

%

 

(dollars in millions)202320222021$%$%

Revenues

 

$

8,060

 

 

$

5,364

 

 

$

4,326

 

 

$

2,696

 

 

 

50.3

%

 

$

1,038

 

 

 

24.0

%

Revenues$14,984 $$14,410 $$13,874 $$574 4.0 4.0 %$536 3.9 3.9 %

2017


2023 compared to 2016

2022


In 2017,2023, our revenues increased $2,696$574 million, or 50.3%4.0%, as compared to the same period in 2016.2022. This increase was comprised of constant currency revenue growth of approximately $2,678$596 million, or 49.9%4.1%, andreflecting a positive impact of approximately $18 million from the effects of foreign currency fluctuations. The constant currency revenue growth was comprised of a $2,515$121 million increase in CommercialTechnology & Analytics Solutions, which includes $2,557 million from the Merger, partially offset by lower revenue from Encore during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017, a $172 million increase in Research & Development Solutions and a $9 million decrease in Integrated Engagement Services.

2016 compared to 2015

In 2016, our revenues increased $1,038 million, or 24.0%, as compared to the same period in 2015. This increase was comprised of constant currency revenue growth of approximately $1,044 million, or 24.1%, and a negative impact of approximately $6 million from the effects of foreign currency fluctuations. The constant currency revenue growth was comprised of a $769 million increase in Commercial Solutions, which includes $799 million from the Merger, partially offset by a decline in the legacy service offerings, a $341 million increase in Research & Development Solutions, which includes the incremental impact from the businesses that Quest contributed to Q2 Solutions, and a $66 million decrease in Integrated Engagement Services. The revenue contributed by the Merger in 2016 was negatively impacted by approximately $55 million as a result of adjusting the acquired IMS Health unearned income to fair value as required by purchase accounting.

Costs of Revenue, exclusive of Depreciation and Amortization

 

 

Year Ended December 31,

 

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

Costs of revenue, exclusive of depreciation and amortization

 

$

4,622

 

 

$

3,236

 

 

$

2,705

 

% of revenues

 

 

57.3

%

 

 

60.3

%

 

 

62.5

%

2017 compared to 2016

When compared to 2016, costs of revenue, exclusive of depreciation and amortization, in 2017 increased $1,386 million. This increase includes a constant currency increase of approximately $1,388 million, or 42.9%, partially offset by a positive impact of approximately $2 million from the effects of foreign currency fluctuations. The constant currency growth was comprised of a $1,267 million increase in Commercial Solutions, which includes $1,302 million from the Merger, partially offset by lower costs from Encore during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017, a $119$477 million increase in Research & Development Solutions, and a $2 million increasedecrease in Integrated Engagement Services.

As a percentContract Sales & Medical Solutions.


51

Cost of revenues, costsRevenues, exclusive of revenue declined in 2017 to 57.3% asDepreciation and Amortization
Year Ended December 31,
(dollars in millions)202320222021
Cost of revenues, exclusive of depreciation and amortization$9,745 $9,382 $9,233 
% of revenues65.0 %65.1 %66.5 %

2023 compared to 60.3% in 2016. This decline was primarily due to the fact that 2017 includes a lower proportion of revenues from the lower margin Integrated Engagement Services segment, primarily as a result of the Merger.2022

48

2016 compared to 2015

When compared to 2015, costs2022, cost of revenue, revenues, exclusive of depreciation and amortization increased $363 million in 2016 increased $531 million.2023, or 3.9%. This increase includesincluded a constant currency increase of approximately $566$550 million, or 20.9%5.9%, partially offset by a positive impact of approximately $35 million from the effects of foreign currency fluctuations. The constant currency growth was comprised of a $403$163 million increase in CommercialTechnology & Analytics Solutions, which includes $435 million from the Merger, partially offset by a decline in the legacy service offerings, a $222$393 million increase in Research & Development Solutions, which includes the incremental impact from the businesses that Quest contributed to Q2 Solutions, and a $59$6 million decrease in Integrated Engagement Services.  

Contract Sales & Medical Solutions.


As a percentage of revenues, cost of revenues, exclusive of depreciation and amortization in 2023 remained relatively consistent with 2022.

Selling, General and Administrative Expenses

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

(dollars in millions)202320222021

Selling, general and administrative expenses

 

$

1,605

 

 

$

1,011

 

 

$

815

 

% of revenues

 

 

19.9

%

 

 

18.8

%

 

 

18.8

%

% of revenues13.7 %14.4 %14.2 %

2017


2023 compared to 2016

2022


The $594$18 million increasedecrease in selling, general and administrative expenses in 2017 includes2023 as compared to 2022 included a constant currency increase of $587approximately $8 million, or 58.1%0.4%, and a negative impact of approximately $7 million from the effects of foreign currency fluctuations. The constant currency growth primarily consistedcomprised of a $479$40 million increase in CommercialTechnology & Analytics Solutions, primarily from the Merger and a $6 million increase in Research & Development Solutions.  Also contributing to the increase was a higher level of general corporate and unallocated expenses of $111 million, primarily due to higher stock-based compensation expense and acquisition and integration related costs, which was partially offset by a $9 million decrease in Integrated Engagement Services.

2016 compared to 2015

The $196 million increase in selling, general and administrative expenses in 2016 includes a constant currency increase of $215 million, or 26.4%, partially offset by a positive impact of approximately $19 million from the effects of foreign currency fluctuations. The constant currency growth was comprised of a $149 million increase in Commercial Solutions, which includes $156 million from the Merger, partially offset by a decline in legacy service offerings, a $34$30 million increase in Research & Development Solutions, which includes the incremental impact from the businesses that Quest contributed to Q2offset by a $4 million decrease in Contract Sales & Medical Solutions a $3 million increase in Integrated Engagement Services, and a $29$58 million increasedecrease in general corporate and unallocated expenses, which includes $37 million from the Merger. The constant currency increase in general corporate and unallocated expenses in 2016 was primarily due to higher stock-based compensation expense.

expenses.


Depreciation and Amortization

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

(dollars in millions)202320222021

Depreciation and amortization

 

$

1,011

 

 

$

289

 

 

$

128

 

% of revenues

 

 

12.5

%

 

 

5.4

%

 

 

3.0

%

% of revenues7.5 %7.8 %9.1 %


The $722$5 million and $161 million increasesdecrease in depreciation and amortization in 20172023 as compared to 2022 was primarily the result of less amortization from certain intangible assets from the merger between Quintiles and 2016, respectively, were primarily due to the approximately $6.4 billionIMS Health, offset by an increase in amortization of capitalized software and of intangible assets acquiredfrom acquisitions occurring in the Merger.2022 and 2023.

49

Restructuring Costs

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Restructuring costs

 

$

63

 

 

$

71

 

 

$

30

 

During 2017, we recognized $63 million of


The restructuring charges, net of reversals for changes in estimates, undercosts incurred were due to ongoing efforts to streamline our existingglobal operations and reduce overcapacity to adapt to changing market conditions and integrate acquisitions. These restructuring plans. The remaining actions under these plans, as well as actions associated with upcoming 2018 plans, are expected to occur throughout 2018,2024 and are expected to consist of severance, facility closureconsolidating functional activities, eliminating redundant positions, and other exit-related costs.

During 2016, we recognized $71 million of restructuring charges, net of reversals for changes in estimates, under our existing restructuring plans.

During 2015, we recognized $30 million of restructuring charges, net of reversals for changes in estimates, associatedaligning resources with both the February 2015 restructuring plancustomer requirements.


52

Interest Income and the Q2 Solutions restructuring plan.

Merger Related Costs

Interest Expense

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Merger related costs

 

$

—

 

 

$

87

 

 

$

—

 

Interest income
Interest expense

During 2016, we recognized $87 million of merger related costs. Merger related costs include the direct


Interest income included interest received primarily from bank balances and incremental costs associated with the Merger such as (i) investment banking, legal, accounting and consulting fees, (ii) incremental compensation costs triggered under change in control provisions in executive employment agreements, (iii) compensation and related costs of employees 100% dedicated to merger-related integration activities and (iv) severance and other termination costs associated with employees whose positions became redundant asinvestments. The increase is primarily a result of higher deposit rates.

Interest expense during 2023 was higher than 2022 due primarily to higher base rate interest costs across the Merger.  

Impairment Charges

floating rate debt portfolio as well as from an increase in our net debt.

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Impairment charges

 

$

40

 

 

$

28

 

 

$

2

 


During 2017 and 2016,

Loss on Extinguishment of Debt
Year Ended December 31,
(in millions)202320222021
Loss on extinguishment of debt$6 $— $26 

In 2023, we recognized $40a loss on extinguishment of debt of $6 million for fees and $28 million, respectively,expenses incurred related to the refinancing of impairment losses for declinesour Credit Agreement as discussed further in fair value of goodwill and identifiable intangible assets in Encore. See Note 1710 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to impairment charges. During the fourth quarter of 2015, we exited a training facility in Japan, resulting in a $2 million impairment of the land and building.

Interest Income and Interest Expense

10-K.

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Interest income

 

$

(7

)

 

$

(4

)

 

$

(4

)

Interest expense

 

$

346

 

 

$

144

 

 

$

101

 


Interest income includes interest received primarily from bank balances and investments.

Interest

Other (income) expense, during 2017 was higher than 2016 due to an increase in the average debt outstanding, primarily as a result of the debt assumed in the Merger and the refinancing transaction in the fourth quarter of 2016 (approximately $4.5 billion), the February 2017 issuance of €1,425 million (approximately $1,522 million) of 3.25% senior notes, the September 2017 issuance of €420 million (approximately $501 million) of 2.875% senior notes and the incremental term B loan of $750 million. See Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to these debt transactions. Interest expense during 2016 was higher than 2015 due to an increase in the average debt outstanding, primarily as a result of the debt acquired from the Merger.

50

Loss on Extinguishment of Debt

net

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Loss on extinguishment of debt

 

$

19

 

 

$

31

 

 

$

8

 

Other (income) expense, net

During 2017, we recognized a $19 million loss on extinguishment of debt for fees and expenses incurred related to the refinancing of our senior notes and senior secured credit facilities, which includes a $16 million make-whole premium.

In the fourth quarter of 2016, we recognized a $31 million loss on extinguishment of debt related to the refinancing of our senior secured credit facilities. The loss on extinguishment of debt includes an $8 million make-whole premium, $9 million of unamortized debt issuance costs and $14 million of unamortized discount.

In May 2015, we recognized an $8 million loss on extinguishment of debt related to the refinancing of our senior secured credit facilities. The loss on extinguishment of debt includes $1 million of unamortized debt issuance costs, $1 million of unamortized discount and $6 million of related fees and expenses.

See “—Liquidity and Capital Resources” for more information on these transactions.  


Other Expense (Income), Net

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Other expense (income), net

 

$

30

 

 

$

(8

)

 

$

2

 

Other(income) expense, net for 2017 2023 increased compared to 2022 primarily consisted ofdue to foreign currency net losses, partially offset by investment gains. The foreign currency losses in 2017 were primarily the result of the combination of changes in intercompany loan balances from corporate legal entity integration and a weaker U.S. dollar.

Other income, net for 2016 primarily consisted of a gain on the sale oftransactions, and to a cost basis investment partially offset by foreign currency net losses.  

Other expense, net for 2015 primarily consisted of $6 million of expense related to the change in fair valuelesser extent from revaluations of contingent consideration related to an acquisition, partially offset by $5 million of foreign currency net gains.

and gains on investments.


Income Tax (Benefit) Expense

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

(dollars in millions)202320222021

Income tax (benefit) expense

 

$

(987

)

 

$

345

 

 

$

159

 

Income tax expense

Effective income tax rate

 

 

(298.2

)%

 

 

72.0

%

 

 

29.5

%

Effective income tax rate6.9 %19.1 %14.5 %

On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act is comprehensive legislation


In 2023, we completed an internal legal entity restructuring that includes provisions that lower the federal corporate income tax rate from 35% to 21% beginningresulted in 2018 and impose a one-time transition tax on undistributed foreign earnings. ASC 740 “Income Taxes” generally requires the effectsbenefit of the tax law change to be$125 million. Historically, we recorded in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin No. 118 to address situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. We have recognized the tax impacts related to the transition tax on undistributed foreign earnings and the impact to deferred tax assets related to certain foreign tax credits, and liabilitiesa full valuation allowance in relation to these foreign tax credits was established as it was not expected the credits would be utilized prior to expiration. We now believe it is reasonably possible that these foreign tax credits will be utilized and included these amounts in our consolidated financial statements for the year ended December 31, 2017, on a provisional basis. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, and additional interpretive regulatory guidance that may be issued. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018.  

51

As a result of the Tax Act,therefore we recorded a provisional deferred tax benefit of $977$64 million related to the revaluation of deferred taxes atvaluation allowance release and establishing related uncertain tax positions. Additionally, due to the newly enacted 21% rate and the reversal of therestructuring we also reversed a deferred tax liability on undistributed foreign earnings net of the newly enacted transition tax. We no longer consider any of our foreign earnings$61 million due to be indefinitely reinvested. Oura basis difference that was recovered in a tax-free manner. The effective income tax rate was also favorably impacted by a reversal of uncertain tax positions relating to tax credit carryforwards in the amount of $21 million due to an audit settlement. Lastly, the effective tax rate was also impacted by changes in the geographical mix of earnings amongst foreign tax jurisdictions as well as state and local tax rates.


In 2022, we recorded a benefit of $261$6 million related to purchase accounting amortizationa 2021 U.S. Federal tax return position associated with Foreign Derived Intangible Income (“FDII”) and Global Intangible Low-Taxed Income (“GILTI”) tax credits. In addition, our effective tax rate was impacted by changes in the geographical mix of approximately $763 millionearnings amongst foreign tax jurisdictions as a resultwell as state and local tax rates.    

53

Equity in (Losses) Earnings of the Merger. Additionally,Unconsolidated Affiliates
Year Ended December 31,
(in millions)202320222021
Equity in (losses) earnings of unconsolidated affiliates$— $(12)$6 

Equity in (losses) earnings of unconsolidated affiliates decreased in 2023 compared to 2022 due to the adoption of the new stock-based compensation accounting standard on January 1, 2017, our effective income tax rate was favorably impacted by $26 million of excess tax benefits on equity compensation.

The increaseresults in the 2016 effective income tax rate, as compared to 2015, was due to a change in our indefinite reinvestment assertion on the majorityoperations of our cumulative foreign earnings. Due to the Merger, we reevaluated our indefinite reinvestment assertion based on the need for cash in the United States, including funding the Repurchase Program and potential acquisitions. Accordingly, we changed our assertion with respect to $2,801 million of foreign earnings, including $1,865 million of IMS Health’s previously undistributed historical foreign earnings. Deferred income taxes of $625 million were recorded in 2016 related to non-indefinitely reinvested foreign earnings. Of that amount, $373 million was recorded through purchase accounting related to IMS Health’s historical foreign earnings and the remainder of $252 million was recorded through deferred income tax expense

Equity in Earnings (Losses) of Unconsolidated Affiliates

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Equity in earnings (losses) of unconsolidated affiliates

 

$

10

 

 

$

(4

)

 

$

8

 

Equity in earnings (losses) of unconsolidated affiliates primarily includes earnings (losses) from our investment in NovaQuest Pharma Opportunities Funds. See Note 4 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to these funds.

Net Income Attributable to Non-controlling Interests

affiliates.

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Net income attributable to non-controlling interests

 

$

(19

)

 

$

(15

)

 

$

(1

)


Net income attributable to non-controlling interests primarily includes Quest’s interest in Q2 Solutions.

Segment Results of Operations


Revenues and profit by segment are as follows (dollars in millions):

follows:

 

Segment Revenues

 

 

Segment Profit

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

 

2015

 

Commercial Solutions

 

$

3,630

 

 

$

1,089

 

 

$

323

 

 

$

1,010

 

 

$

234

 

 

$

19

 

Segment RevenuesSegment RevenuesSegment Profit
(in millions)(in millions)202320222021202320222021
Technology & Analytics Solutions

Research & Development Solutions

 

 

3,647

 

 

 

3,478

 

 

 

3,159

 

 

 

997

 

 

 

943

 

 

 

824

 

Integrated Engagement Services

 

 

783

 

 

 

797

 

 

 

844

 

 

 

73

 

 

 

76

 

 

 

78

 

Contract Sales & Medical Solutions

Total

 

 

8,060

 

 

 

5,364

 

 

 

4,326

 

 

 

2,080

 

 

 

1,253

 

 

 

921

 

General corporate and unallocated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(247

)

 

 

(136

)

 

 

(115

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,011

)

 

 

(289

)

 

 

(128

)

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(63

)

 

 

(71

)

 

 

(30

)

Merger related costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

(87

)

 

 

—

 

Impairment charges

 

 

 

 

 

 

 

��

 

 

 

 

 

 

(40

)

 

 

(28

)

 

 

(2

)

Consolidated

 

$

8,060

 

 

$

5,364

 

 

$

4,326

 

 

$

719

 

 

$

642

 

 

$

646

 

Prior period segment results have been recast to conform to immaterial changes to management reporting in 2017. The recast only impacts the fourth quarter of 2016 as the management reporting changes relate to IMS Health and these results are only reflected in our results since the date of the Merger on October 3, 2016. 


52

Certain costs are not allocated to our segments and are reported as general corporate and unallocated expenses. These costs primarily consist of stock-based compensation and expenses for corporate overhead functions such as senior leadership, finance, human resources, information technology, facilitiesrelated to integration activities and legal. In addition, weacquisitions. We also do not allocate restructuring costs, depreciation and amortization, restructuring costs, merger related costs or impairment charges, if any, to our segments.

Commercial


Technology & Analytics Solutions

 

Year Ended December 31,

 

 

Change

 

Year Ended December 31,Year Ended December 31,Change

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

 

2017 vs. 2016

 

 

2016 vs. 2015

 

(dollars in millions)2023202220212023 vs. 20222022 vs. 2021

Revenues

 

$

3,630

 

 

$

1,089

 

 

$

323

 

 

$

2,541

 

 

 

233.3

%

 

$

766

 

 

 

237.2

%

Revenues$5,862 $$5,746 $$5,534 $$116 2.0%2.0%$212 3.8%3.8%

Costs of revenue, exclusive of depreciation

and amortization

 

 

1,917

 

 

 

641

 

 

 

239

 

 

 

1,276

 

 

 

199.1

 

 

 

402

 

 

 

168.2

 

Cost of revenues, exclusive of depreciation and amortizationCost of revenues, exclusive of depreciation and amortization3,496 3,348 3,278 148 4.470 2.1

Selling, general and administrative expenses

 

 

703

 

 

 

214

 

 

 

65

 

 

 

489

 

 

 

228.5

 

 

 

149

 

 

 

229.2

 

Selling, general and administrative expenses876 848 848 798 798 28 28 3.33.350 6.36.3

Segment profit

 

$

1,010

 

 

$

234

 

 

$

19

 

 

$

776

 

 

 

331.6

%

 

$

215

 

 

 

1,131.6

%

Segment profit$1,490 $$1,550 $$1,458 $$(60)(3.9)%(3.9)%$92 6.3%6.3%


Revenues

2017


2023 compared to 2016

Commercial2022


Technology & Analytics Solutions’ revenues were $3,630$5,862 million in 2017,2023, an increase of $2,541$116 million, or 2.0%, over 2016.2022. This increase was comprised of constant currency revenue growth of approximately $2,515$121 million, or 2.1%, reflecting revenue growth primarily in the Americas region and to a positive impact of approximately $26 million fromlesser extent in the effects of foreign currency fluctuations.Asia-Pacific region. The constant currency revenue growth was primarily driven by an increase includes the incremental impact from the Merger of $2,557 million, including post-Merger acquisitions, partially offsetin information and technology services and by a declinelesser extent in revenue from Encore during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017.

2016 compared to 2015

Commercial Solutions’ revenues were $1,089 million in 2016, an increase of $766 million over 2015, which includes the impact from the Merger of $799 million. The revenue increase was due to the impact from the Merger and from growth in real-world and late phase research services, partially offset by lower revenues from Encore and advisoryreal world services. The constant currency revenue contributed by the Merger in 2016growth was negatively impacted by approximately $55 million as a resultdecrease in COVID-19 related work.


54

Cost of adjusting the acquired IMS Health unearned income to fair value as required by purchase accounting.

Costs of Revenue,Revenues, exclusive of Depreciation and Amortization

2017


2023 compared to 2016

Commercial2022


Technology & Analytics Solutions’ costscost of revenues,, exclusive of depreciation and amortization, were $1,917increased $148 million, or 4.4%, in 2017, an increase of $1,276 million over 2016.2023 as compared to 2022. This increase was comprised ofincluded a $1,267 million constant currency increase and a negative impact of approximately $9$163 million, from the effects of foreign currency fluctuations. The constant currencyor 4.9%, reflecting an increase includes the incremental impact from the Merger of $1,302 million, including post-Merger acquisitions, partially offset by lower costs from Encore due to lower revenue volumes during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017.

2016 compared to 2015

Commercial Solutions’in costs of acquiring and processing data and an increase in compensation and related expenses to support revenue exclusive of depreciation and amortization, increased approximately $402 million in 2016. This increase was comprised of a $403 million constant currency increase, which includes $435 million from the Merger, offset by lower costs from Encore and advisory services due to lower revenue volumes, and $1 million due to the negative effects of foreign currency fluctuations. growth.


53

Selling, General and Administrative Expenses

2017


2023 compared to 2016

Commercial2022


Technology & Analytics Solutions’ selling, general and administrative expenses increased approximately $489$28 million, or 3.3%, in 20172023 as compared to 2016.2022. This increase was comprised ofincluded a $479 million constant currency increase and a negative impact of approximately $10$40 million, from the effects of foreign currency fluctuations. The constant currency increase was primarily due to the incremental impact from the Merger of $487 million, including post-Merger acquisitions.

2016 compared to 2015

Commercial Solutions’ selling, general and administrative expenses increased approximately $149 million in 2016 as compared to 2015. This increase was primarily due to $156 million from the Merger,or 4.7%, reflecting an increase in bad debt expensecompensation and partially offset by cost reductions in various other areas.

related expenses.


Research & Development Solutions

 

Year Ended December 31,

 

 

Change

 

Year Ended December 31,Year Ended December 31,Change

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

 

2017 vs. 2016

 

 

2016 vs. 2015

 

(dollars in millions)2023202220212023 vs. 20222022 vs. 2021

Revenues

 

$

3,647

 

 

$

3,478

 

 

$

3,159

 

 

$

169

 

 

 

4.9

%

 

$

319

 

 

 

10.1

%

Revenues$8,395 $$7,921 $$7,556 $$474 6.0%6.0%$365 4.8%4.8%

Costs of revenue, exclusive of depreciation

and amortization

 

 

2,068

 

 

 

1,956

 

 

 

1,779

 

 

 

112

 

 

 

5.7

 

 

 

177

 

 

 

9.9

 

Cost of revenues, exclusive of depreciation and amortizationCost of revenues, exclusive of depreciation and amortization5,629 5,395 5,303 234 4.392 1.7

Selling, general and administrative expenses

 

 

582

 

 

 

579

 

 

 

556

 

 

 

3

 

 

 

0.5

 

 

 

23

 

 

 

4.1

 

Selling, general and administrative expenses851 831 831 777 777 20 20 2.42.454 6.96.9

Segment profit

 

$

997

 

 

$

943

 

 

$

824

 

 

$

54

 

 

 

5.7

%

 

$

119

 

 

 

14.4

%

Segment profit$1,915 $$1,695 $$1,476 $$220 13.0%13.0%$219 14.8%14.8%


Backlog and Net New Business

Beginning with the third quarter of 2016, we began reporting net new business and backlog on an as-contracted basis (signed binding commitments and signed contracts during the period) on a rolling basis for the last twelve months. We only report backlog and net new business for the


Research & Development Solutions segment. Previously, net new business included non-binding written awards, which was consistent with industry practice. We believe the as-contracted method is a more precise approachSolutions' contracted backlog increased from $27.2 billion as it requires a higher threshold and less judgment for backlog inclusion. Net new business totaled $4.54 billion and $4.34 billion for the twelve months endedof December 31, 20172022 to $29.7 billion as of December 31, 2023 and 2016, respectively. Endingwe expect approximately $7.5 billion of this backlog to convert to revenues in the next 12 months. Contracted backlog was $10.54$24.8 billion atas of December 31, 2017.

Net new business under sole provider arrangements is recorded over the life of the arrangement as projects are awarded. Consistent with our methodology for calculating net new business during a particular period, backlog2021.


Backlog represents, at a particular point in time, future service revenues from work not yet completed or performed under signed contracts. Once work begins on a project, service revenues are recognized over the duration of the project. Net new business and backlog denominated in foreign currencies are valued each month using the actual average foreign exchange rates in effect during the month.


We believe that backlog and net new business may not be consistent indicatorsis an indicator of future revenues because they have been and likelybut the timing of revenues will be affected by a number of factors, including the variable size and duration of projects, many of which are performed over several years, cancellations, and changes to the scope of work during the course of projects. Projects that have been delayed remain in backlog, but the timing of the revenuerevenues generated may differ from the timing originally expected. Additionally, projects may be terminated or delayed by the customer or delayed by regulatory authorities. In the event that a client cancels a contract, we typically would be entitled to receive payment for all services performed up to the cancellation date and subsequent client-authorized services related to winding down the canceled project. For more details regarding risks related to our backlog, see Part I, Item IA, “Risk Factors—Risks Related to our Business—The relationship of backlog to revenues varies over time.”

54

Revenues

2017


2023 compared to 2016

2022


Research & Development Solutions’ revenues were $3,647$8,395 million in 2017,2023, an increase of $169$474 million, or 4.9%6.0%, over 2016. 2022. This increase was comprised of constant currency revenue growth of $172approximately $477 million, or 4.9%6.0%, partially offset byreflecting revenue growth primarily in the Americas region and to a negative impact of approximately $3 million fromlesser extent in the effects of foreign currency fluctuations.

Europe and Africa and Asia-Pacific regions. The constant currency revenue growth for 2017was primarily includesthe result of volume-related increases from both ourin clinical solutions and services and our clinical trial support services as well as revenue from current year acquisitions, partially offset by lower revenue from early clinical development services, due to a facility closurelesser extent from volume-related increases in Europe in 2016.

2016 compared to 2015

Research & Development Solutions’ revenues were $3,478 million in 2016, an increase of $319 million, or 10.1%, over 2015. This increase was comprised of constant currency revenue growth of $341 million, or 10.8%, partially offset by a negative impact of approximately $22 million from the effects of foreign currency fluctuations.lab testing. The constant currency revenue growth primarily includes volume-related increases in our services and the incremental impact from the businesses that Quest contributed to Q2 Solutions.

The volume-related revenue growth was related to increases in revenue from both our clinical solutions and services and our clinical trial support services. This growth was due largely to execution on the higher backlog in place as we entered the year. The 2016 growth was negatively impacted by $17 milliona decrease in COVID-19 related work.


55

Cost of non-recurring revenue recognized in the second quarter of 2015 related to the early close out of a client arrangement. The constant currency revenue growth in 2016 was negatively impacted by $27 million of foreign currency exchange rate adjustments associated with client contracts and losses on foreign exchange forward contracts.

Costs of Revenue,Revenues, exclusive of Depreciation and Amortization

2017


2023 compared to 2016

2022


Research & Development Solutions’ costscost of revenue, revenues, exclusive of depreciation and amortization, increased approximately $112$234 million, or 4.3%, in 20172023 as compared to 2016.2022. This increase includesincluded a constant currency growthincrease of $119approximately $393 million, or 6.1%7.3%, partially offset by $7 million from the positive effects of foreign currency fluctuations.

The constant currency costs of revenue growth wasreflecting primarily due to an increase in compensation and related expenses and the impact from post-Merger acquisitions. The increase in compensation and related expenses resulted from (i)to a lesser extent an increase in billable headcount resulting from the higher volumeother direct costs as a result of constant currency revenue, (ii) our continued investment in our global delivery network (“GDN”) that enables us to provide standardized, centrally-managed services from seven hub locations across five countries, and (iii) an increase in competition for qualified personnel in certain markets.

2016 compared to 2015

Research & Development Solutions’ costs of revenue, exclusive of depreciation and amortization, increased approximately $177 million in 2016 over 2015. This increase includes constant currency growth of $222 million, or 12.5%, which includes the incremental impact from the businesses that Quest contributed to Q2 Solutions, partially offset by $45 million from the positive effects of foreign currency fluctuations.  

The constant currency costs of revenue growth was primarily due to the impact from the Q2 Solutions transaction and an increase in compensation and related expenses. The increase in compensation and related expenses resulted from (i) an increase in billable headcount resulting from the higher volume of constant currency revenue, (ii) our continued investment in our GDN which is a coordinated global delivery model that enables us to provide standardized, centrally-managed services from seven hub locations across five countries, (iii) annual merit increases and (iv) an increase in competition for qualified personnel in certain markets. The constant currency growth for 2016 also includes a $12 million reserve for certain potentially non-reimbursable expenses. Thesevolume-related increases in cost were partially offset by $17 million of expense recognized in the second quarter of 2015 related to the early close out of a client arrangement that did not recur in 2016clinical services and a $15 million increase in the benefit from research and development credits received in Europe.lab testing.


55

Selling, General and Administrative Expenses

2017


2023 compared to 2016

2022


Research & Development Solutions’ selling, general and administrative expenses increased approximately $3$20 million, or 0.5%2.4%, in 20172023 as compared to 2016.2022. This increase was caused byincluded a constant currency increase of approximately $30 million, or 3.6%, reflecting an increase in compensation and related expenses.

Contract Sales & Medical Solutions
Year Ended December 31,Change
(dollars in millions)2023202220212023 vs. 20222022 vs. 2021
Revenues$727 $743 $784 $(16)(2.2)%$(41)(5.2)%
Cost of revenues, exclusive of depreciation and amortization620 639 652 (19)(3.0)(13)(2.0)
Selling, general and administrative expenses58 62 57 (4)(6.5)5 8.8
Segment profit$49 $42 $75 $7 16.7%$(33)(44.0)%

Revenues

2023 compared to 2022

Contract Sales & Medical Solutions’ revenues were $727 million in 2023, a decrease of $16 million, or 2.2%, over 2022. This decrease included a constant currency revenue decrease of approximately $2 million, or 0.3%.

Cost of Revenues, exclusive of Depreciation and Amortization

2023 compared to 2022

Contract Sales & Medical Solutions’ cost of revenues, exclusive of depreciation and amortization, decreased $19 million, or 3.0%, in 2023 as compared to 2022. This decrease included a constant currency decrease of approximately $6 million, offset by a positive impact of approximately $3 million from the effects of foreign currency fluctuations. As a percent of revenues, Researchor 0.9%.

Selling, General and Administrative Expenses

2023 compared to 2022

Contract Sales & DevelopmentMedical Solutions’ selling, general and administrative expenses were 16.0% and 16.6% in 2017 and 2016, respectively. The constant currency increase for 2017 was primarily due to the impact of post-Merger acquisitions, partially offset by lower incentive compensation and bad debt expense.

2016 compared to 2015

Research & Development Solutions’ selling, general and administrative expenses increased approximately $23decreased $4 million, or 4.1%6.5%, in 20162023 as compared to 2015. This increase was caused by constant currency growth of $34 million, partially offset by a reduction of $11 million from foreign currency fluctuations. As a percent of revenues, Research & Development Solutions’ selling, general and administrative expenses were 16.6% and 17.6% in 2016 and 2015, respectively. The constant currency increase was primarily due to the incremental impact from the businesses that Quest contributed to Q2 Solutions, higher compensation and related expenses due to annual merit increases and an increase in headcount and an increase in bad debt expense.  

Integrated Engagement Services

 

 

Year Ended December 31,

 

 

Change

 

(dollars in millions)

 

2017

 

 

2016

 

 

2015

 

 

2017 vs. 2016

 

 

2016 vs. 2015

 

Revenues

 

$

783

 

 

$

797

 

 

$

844

 

 

$

(14

)

 

 

(1.8

)%

 

$

(47

)

 

 

(5.6

)%

Costs of revenue, exclusive of depreciation

   and amortization

 

 

637

 

 

 

639

 

 

 

687

 

 

 

(2

)

 

 

(0.3

)

 

 

(48

)

 

 

(7.0

)

Selling, general and administrative expenses

 

 

73

 

 

 

82

 

 

 

79

 

 

 

(9

)

 

 

(11.0

)

 

 

3

 

 

 

3.8

 

Segment profit

 

$

73

 

 

$

76

 

 

$

78

 

 

$

(3

)

 

 

(3.9

)%

 

$

(2

)

 

 

(2.6

)%

Revenues

2017 compared to 2016

Integrated Engagement Services’ revenues were $783 million in 2017, a decrease of $14 million, or 1.8%, over 2016.2022. This decrease was comprised ofincluded a constant currency revenue decrease of $9approximately $4 million, or 1.1%, and a negative impact of approximately $5 million due to the effects of foreign currency fluctuations. The decline in constant currency revenues for 2017 was due to lower demand in Japan and North America, which was also a result of cancellations that occurred in 2017. The decline was also due to a $9 million benefit from the acceleration of revenue in the second quarter of 2016 that did not recur in 2017 related to a contract modification on a sales force arrangement that fixed a portion of the contract price that was previously not determinable until future sales-based royalties were known, partially offset by revenue from new projects starting up, primarily in Europe.

2016 compared to 2015

Integrated Engagement Services’ revenues were $797 million in 2016, a decrease of $47 million, or 5.6%, over 2015. This decrease was comprised of a constant currency revenue decrease of $66 million, or 7.8%, partially offset by a positive impact of approximately $19 million due to the effects of foreign currency fluctuations. The decline in constant currency revenues for 2016 was due to decreases in North America (primarily as a result of cancellations that occurred in 2015 and earlier this year), Japan and Europe. The decline in Europe was partially offset by a $9 million benefit from the acceleration of revenue related to a contract modification in 2016.6.5%.


56

Costs of Revenue, exclusive of Depreciation and Amortization

2017 compared to 2016

Integrated Engagement Services’ costs of revenue, exclusive of depreciation and amortization, decreased approximately $2 million in 2017. This decrease includes constant currency growth of $2 million, or 0.3%, more than offset by $4 million from the positive effects of foreign currency fluctuations. The constant currency cost of revenue growth in 2017 was due to an increase in compensation and related expenses resulting from an increase in billable headcount in Europe as a result of an increase in new projects starting up in the 2017 period.

2016 compared to 2015

Integrated Engagement Services’ costs of revenue, exclusive of depreciation and amortization, decreased approximately $48 million in 2016. This decrease was comprised of a $59 million constant currency decrease, or 8.6%, partially offset by $11 million due to the positive effects of foreign currency fluctuations. The constant currency decrease for 2016 was due to a decrease in compensation and related expenses resulting from a decrease in billable headcount.

Selling, General and Administrative Expenses

2017 compared to 2016

Integrated Engagement Services’ selling, general and administrative expenses decreased approximately $9 million in 2017 as compared to 2016, primarily due to lower compensation and related expenses resulting from a decrease in headcount.

2016 compared to 2015

Integrated Engagement Services’ selling, general and administrative expenses increased approximately $3 million in 2016 as compared to 2015, primarily due to a higher level of bad debt expense.


57

Liquidity and Capital Resources


Overview


We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our principal source of liquidity is operating cash flows. In addition to operating cash flows, other significant factors that affect our overall management of liquidity include: capital expenditures, acquisitions, investments, debt service requirements, dividends, equity repurchases, adequacy of our revolving credit and receivables financing facilities, and access to the capital markets.


We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which those funds can be accessed on a cost-effective basis. The repatriation of cash balances from certain of our subsidiaries could have adverse tax consequences; however, those balances are generally available without legal restrictions to fund ordinary business operations. We have and expect to transfer cash from those subsidiaries to the United States and to other international subsidiaries when it is cost effective to do so.


We had a cash balance of $959$1,376 million atas of December 31, 20172023 ($147471 million of which was in the United States), a decreasean increase from $1,198$1,216 million atas of December 31, 2016.

2022.


Based on our current operating plan, we believe that our available cash and cash equivalents, future cash flows from operations and our ability to access funds under our revolving credit and receivables financing facilities will enable us to fund our operating requirements, and capital expenditures, contractual obligations, and meet debt obligations for at least the next 12 months. We regularly evaluate our debt arrangements, as well as market conditions, and from time to time we may explore opportunities to modify our existing debt arrangements or pursue additional financing arrangements that could result in the issuance of new debt securities by us or our affiliates. We may use our existing cash, cash generated from operations or dispositions of assets or businesses and/or proceeds from any new financing arrangements or issuances of debt or equity securities to repay or reduce some of our outstanding obligations, to repurchase shares from our stockholders or for other purposes. As part of our ongoing business strategy, we also continually evaluate new acquisition, expansion and investment possibilities or other strategic growth opportunities, as well as potential dispositions of assets or businesses, as appropriate, including dispositions that may cause us to recognize a loss on certain assets. Should we elect to pursue any such transaction, we may seek to obtain debt or equity financing to facilitate those activities. Our ability to enter into any such potential transactions and our use of cash or proceeds is limited to varying degrees by the terms and restrictions contained in our existing debt arrangements. We cannot provide assurances that we will be able to complete any such financing arrangements or other transactions on favorable terms or at all.


Equity Repurchase Program


On October 30, 2013,July 31, 2023, our Board approved the Repurchase Program authorizing the repurchase of up to $125 million of either our common stock or vested in-the-money employee stock options, or a combination thereof. Our BoardDirectors increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of our common stock by $600an additional $2,000 million, $1.5 billion, $1.0 billion and $1.0 billion in 2015, November 2016, February 2017 and May 2017, respectively, which increased the total amount that has been authorized under the Repurchase Program to $4.225 billion.$11,725 million. The Repurchase Program does not obligate us to repurchase any particular amount of common stock, or vested in-the-money employee stock options, and it may be modified, extended, suspended or discontinued at any time. The timing and amount

As of repurchases are determined by our management based on a variety of factors such as the market priceDecember 31, 2023, we had remaining authorization to repurchase up to $2,363 million of our common stock our corporate requirements,under the Repurchase Program. In addition, from time to time, we have repurchased and overall market conditions. Purchases of ourmay continue to repurchase common stock may be made in open marketthrough private or other transactions effected through a broker-dealer at prevailing market prices, in block trades, or in privately negotiated transactions. We may also repurchase sharesoutside of our common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act, which would permit shares of our common stock to be repurchased when we might otherwise be precluded from doing so by law. The Repurchase Program for common stock does not have an expiration date.

During the year ended December 31, 2017, we repurchased 30,896,313 shares of our common stock for approximately $2.6 billion. These amounts include 9,677,420 shares of our common stock, which we repurchased from certain of our principal stockholders in a private transaction for approximately $750 million and 10,071,003 shares of our common stock, which we repurchased directly from underwriters in connection with three separate underwritten, secondary public offerings of shares of our common stock held by certain of our principal stockholders for approximately $935 million in the aggregate in May, September and November 2017. Program.


Additional information regarding the Repurchase Program is presented in Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Notes 14 and 27Note 13 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

58

Debt

As of December 31, 2017, we have remaining authorization to repurchase up to $182 million of our common stock under the Repurchase Program. In addition, from time to time, we have repurchased and may continue to repurchase common stock through private or other transactions outside of the Repurchase Program.On February 14, 2018, the Board authorized an increase in the post-merger share repurchase authorization by $1.5 billion to a total of $5.0 billion, with $1.7 billion authorization remaining.

Debt

As of December 31, 2017,2023, we had $10.3 billion$13,752 million of total indebtedness, excluding $500$1,900 million of additional available borrowings under our revolving credit facilities. Seefacility. See Note 1110 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details regarding our credit arrangements.


Our long-term debt arrangements contain customary restrictive covenants and, as of December 31, 2023, we believe we were in compliance with our restrictive covenants in all material respects.
57

Senior Secured Credit Facilities
On November 28, 2023, we entered into an amendment (the “Amendment”) to our Fifth Amended and Restated Credit Agreement (the “Credit Agreement”). Pursuant to the Amendment, we borrowed $1,500 million in incremental Term B-4 Dollar Loans (as defined in the Credit Agreement) due January 2, 2031. The net proceeds from the Term B-4 Dollar Loans were used to repay certain of the outstanding term loans due in 2024 and Senior Notes

2017 Financing Transactions

At December 31, 2017,in 2025 under our senior secured credit facilities, and to pay fees and expenses related to the related to the Amendment and the offering of 2029 Senior Secured Notes (as defined below). In connection with this Amendment, we recognized a $6 million loss on extinguishment of debt, which includes fees and expenses. In connection with the allocation of the Term B-4 Dollar Loans, we entered into cross-currency swaps with a combined notional value of $1,500 million to effectively convert $1,500 million of the Term B-4 Dollar Loans into euro-denominated borrowings at prevailing euro interest rates through January 2031. The effective net borrowing rate to us for these loans, inclusive of the yield on the loans and the beneficial impact of the cross-currency swaps and of the interest rate swaps entered on November 17, 2023 in connection with the allocation of the loans, is approximately 4.9015%.

On April 17, 2023, we increased the capacity of our senior secured revolving credit facility by $500 million U.S. dollars, bringing the total capacity of the revolving credit facility to $2,000 million. At the same time, we also amended the benchmark rate of our U.S. dollar revolving credit facility and the U.S. dollar Term A Loans from U.S. dollar LIBOR to U.S. dollar Term SOFR plus a 10 basis point Credit Spread Adjustment.
As of December 31, 2023, theCredit Agreement provided financing through several senior secured credit facilities (collectively, the “senior secured credit facilities”) of up to approximately $5,656$6,808 million, which consisted of $5,185$4,908 million principal amountamounts of debt outstanding and $471$1,900 million of available borrowing capacity on the $1 billion revolving credit facility that expires in 2021.and standby letters of credit, with a total capacity of $2,000 million. The revolving credit facility is comprised of a $450$1,175 million senior secured revolving facility available in U.S. dollars, a $400$600 million senior secured revolving facility available in U.S. dollars, Euros, Swiss Francs and other foreign currencies, and a $150$225 million senior secured revolving facility available in U.S. dollars and Yen. The term A loans and revolving credit facility under the Credit Agreement mature in October 2021,August 2026, the Additional Term A Loans mature June 2027, while the term B loans under the Credit Agreement mature in 20242025 and 2025. Under certain circumstances, the maturity date of the term A loans and the senior secured revolving facility may be accelerated to 2020.2031. We are required to make scheduled quarterly payments on the term A loans and the Additional Term A Loans equal to 1.25% of the original principal amount, with the remaining balance paid at maturity. We are requiredThe Term B-4 Dollar Loans require us to make scheduled quarterly payments on the term B loans equal to approximately 0.25% of the original principal balance amount, with the remaining principal balance paiddue at maturity. In addition, beginning with fiscal year ending December 31, 2017, we arewere required to apply 50% of excess cash flow (as defined in our senior secured credit facility)the Credit Agreement), subject to a reduction to 25% or 0% depending upon our senior secured first lien net leverage ratio, for prepayment of the Term Loans,term loans, with any such prepayment to be applied toward principal payments due in subsequent quarters. We are also required to pay an annual commitment fee that ranges from 0.30%0.20% to 0.40%0.35% in respect of any unused commitments under the revolving credit facility. The senior secured credit facility isfacilities are collateralized by substantially all of our assets and the assets of our material domestic subsidiaries including 100% of the equity interests of substantially all of our material domestic subsidiaries and 66% of the equity interests of substantially all of our first-tier material foreign subsidiaries and their domestic subsidiaries.

During the third quarter of 2017, we issued €420 million (approximately $501 million) of senior notes due 2025. The senior notes mature on September 15, 2025 and bear an interest rate of 2.875%, which is paid semi-annually on March 15 and September 15, beginning on March 15, 2018. Also during the third quarter of 2017, we entered into an amendment to provide for an incremental term B loan of $750 million and an increase in restricted payment capacity. The term B loan will mature in 2025 and bears a floating interest rate of LIBOR plus 2.00% per year. The net proceeds from

For information regarding the senior notes due 2025 and the incremental term B loan were used for the redemption of the outstanding 4.125% Euro denominated senior notes due 2023, to pay down the revolvingsecured credit facility, to pay certain fees and expenses and for other general corporate purposes, including the repurchase of the Company’s common stock and acquisitions.

During the first quarter of 2017, we issued €1.425 billion (approximately $1,522 million) of senior notes due 2025.  The senior notes mature on March 15, 2025 and bear an annual interest rate of 3.25%, which is paid semi-annually on March 15 and September 15, beginning on September 15, 2017. Also during the first quarter of 2017, we refinanced our term B loans in which the maturity was extended to 2024 and the interest rate margin on the loan denominated in U.S. dollars was reduced from 2.50% to 2.00% and the interest rate margin on the loan denominated in Euros was reduced from 2.75% to 2.00%. Seefacilities, see Note 1110 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional details regarding our credit arrangements.

2016 Financing Transactions

10-K.

Senior Secured Notes
On October 3, 2016,November 28, 2023, we refinancedcompleted the issuance and sale of $1,250 million in gross proceeds of 6.250% senior secured notes due 2029 (the “2029 Senior Secured Notes”). The net proceeds from the 2029 Senior Secured Notes offering were used to repay certain of the outstanding term A loans due 2019 (approximately $884 million) assumed in 2024 and in 2025 under our senior secured credit facilities, and to pay fees and expenses related to the Merger2029 Senior Secured Notes offering and the Amendment.
58

The 2029 Senior Secured Notes are secured obligations, will mature on February 1, 2029, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 6.250% per year, with interest payable semi-annually on February 1 and August 1 of each year, beginning on February 1, 2024. We may redeem the 2029 Senior Secured Notes prior to February 1, 2029 subject to a term A loan facility due in 2021 for an aggregate principal amount of approximately $1,350 million comprised of both U.S. dollar denominated term A loanscustomary make-whole premium, and Euro denominated term A loans. Additionally, the revolving credit facility was refinancedthereafter subject to an aggregate principal amount equal to $1,000 million. The additional proceeds were used, in part, to fund the redemption on November 1, 2016 of $500 million of 6% Senior Notes due 2020 assumed in the Merger, at a redemption price equal to 101.5%100% of the aggregate outstanding principal amount thereof plus accrued and unpaid interest. In connection with the pricing of the 2029 Senior Secured Notes, we entered into cross-currency swaps with a combined notional value of $1,250 million to effectively convert $1,250 million of the 2029 Senior Secured Notes into euro-denominated borrowings at prevailing euro interest rates through February 2029. The effective net borrowing rate to us is approximately 4.8555%, inclusive of the redemption date. We incurred a lossyield on extinguishmentthe notes and the beneficial impact of debtthe cross-currency swaps.
On May 23, 2023, we completed the issuance and sale of approximately $8$750 million in gross proceeds of 5.700% senior secured notes due 2028 (the “2028 Senior Secured Notes”). The net proceeds from the 2028 Senior Secured Notes offering were used to repay existing borrowings under our revolving credit facility, and to pay fees and expenses related to the 2028 Senior Secured Notes offering and offering of 2030 Senior Notes (as defined below). The 2028 Senior Secured Notes are secured obligations, will mature on May 15, 2028, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 5.700% per year, with interest payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2023. We may redeem the 2028 Senior Secured Notes prior to April 15, 2028 subject to a customary make-whole premium, and thereafter subject to a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest.
The 2028 Senior Secured Notes and 2029 Senior Secured Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. In January 2024, we filed a registration statement with respect to an offer (the “Exchange Offer”) to exchange the 2028 Senior Secured Notes for an equal amount of $750 million aggregate paymentsprincipal amount of 5.700% Senior Secured Notes due 2028 registered under the Securities Act (the “2028 Registered Notes”) and the 2029 Senior Secured Notes for make-whole premiums.an equal amount of $1,250 million aggregate principal amount of 6.250% Senior Secured Notes due 2029 registered under the Securities Act (the “2029 Registered Notes”). The Exchange Offer commenced on January 26, 2024 and will expire on February 23, 2024, unless we extend the offer. The terms of the 2028 Registered Notes and the 2029 Registered Notes to be issued in the Exchange Offer are substantially identical in all material respects to the terms of the 2028 Senior Secured Notes and 2029 Senior Secured Notes, respectively, except that the registered notes will not be subject to restrictions on transfer or to any increase in the annual interest rate for failure to comply with the applicable registration rights agreement.

59

Senior Notes

On September 28, 2016, IMS Health issued $1,750May 23, 2023, we completed the issuance and sale of $500 million in gross proceeds of senior unsecured notes, which consisted of (i) $1,050 million of 5%6.500% senior notes due October 20262030 (the “5% Dollar Notes”) and (ii) €625 million of 3.5% senior notes due October 2024 (the “3.5% Euro Notes” and, together with the 5% Dollar Notes, the “2016“2030 Senior Notes”). The net proceeds offrom the 20162030 Senior Notes which we assumed upon closing of the Merger,offering were used on October 3, 2016 to repay existing borrowings under our revolving credit facility, and to pay fees and expenses related to the 2030 Senior Notes offering and 2028 Senior Secured Notes offering. The 2030 Senior Notes are unsecured obligations, will mature on May 15, 2030, unless earlier repurchased or redeemed in full ($1,389 million)accordance with their terms, and bear interest at the term loans outstanding under the Quintiles Transnational senior secured credit facilities. Interest on the 2016 Notes israte of 6.500% per year, with interest payable semi-annually on May 15 and November 15 of each year, beginning on AprilNovember 15, 2017. The notes are guaranteed on a senior unsecured basis by our wholly-owned domestic restricted subsidiaries (excluding IMS Japan K.K.) and, subject to certain exceptions, each of our future domestic subsidiaries that guarantees our other indebtedness or indebtedness of any of2023. We may redeem the guarantors. The 5% Dollar2030 Senior Notes and the 3.5% Euro Notes may be redeemed, either together or separately, prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to OctoberMay 15, 2021 with respect to the 5% Dollar Notes and October 15, 2019 with respect to the 3.5% Euro Notes (in each case subject2026 (subject to a customary “equity claw” redemption right) and thereafter subject to annuallya redemption premium declining redemption premiums at any time priorfrom 3.250% to October 15, 2024 with respect to the 5% Dollar Notes and October 15, 2021 with respect to the 3.5% Euro Notes.

We also assumed in the Merger €275 million of 4.125% Senior Notes due in April 2023 (the “4.125% Senior Notes”)0.000%. As noted above, during the third quarter of 2017, the 4.125% Senior Notes were redeemed. Interest on the 4.125% Senior Notes was payable semi-annually each year and commenced on October 1, 2015.

Receivables Financing Facility

On December 5, 2014, we entered into a four-year arrangement to securitize certain of our accounts receivable. Under the receivables financing facility, certain of our accounts receivable are sold on a non-recourse basis by certain of our consolidated subsidiaries to another of our consolidated subsidiaries, a bankruptcy-remote special purpose entity (“SPE”). The SPE obtained a term loan and revolving loan commitment from a third-party lender, secured by liens on the assets of the SPE, to finance the purchase of the accounts receivable, which includes a $275 million term loan and a $25 million revolving loan commitment. The revolving loan commitment may be increased by an additional $35 million as amounts are repaid under the term loan. IQVIA has guaranteed the performance of the obligations of existing and future subsidiaries that sell and service the accounts receivable under the receivables financing facility. The assets of the SPE are not available to satisfy any of our obligations or any obligations of our subsidiaries. As of December 31, 2017, the full $25 million of revolving loan commitment was available under the receivables financing facility. On December 15, 2017, the Company amended its receivables financing facility to extend the original term of the facility to December 15, 2020. In addition, the applicable margin (over LIBOR) changed to 90 bps regardless of our credit rating. Prior to the amendment, the margin was based on our credit rating and could range from 85 bps to 135 bps.

Restrictive Covenants

Our debt agreements provide for certain covenants and events of default customary for similar instruments, including a covenant not to exceed a specified ratio of consolidated senior secured net indebtedness to Consolidated EBITDA, as defined in


For information regarding the senior secured credit facilitynotes and a covenant to maintain a specified minimum interest coverage ratio. If an event of default occurs under any of the Company’s or the Company’s subsidiaries’ financing arrangements, the creditors under such financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under the revolving credit facility and New Term Loans, other actions permitted to be taken by a secured creditor. Our long-term debt arrangements contain usual and customary restrictive covenants that, among other things, place limitations on our ability to declare dividends. For additional information regarding these restrictive covenants,senior notes, see Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy” and Note 1110 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. At

Receivables Financing Facility

For information regarding the receivables financing facility, see Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. As of December 31, 2017, the Company was in compliance in all material respects with the financial covenants2023, no additional amounts of revolving loan commitments were available under the Company’sreceivables financing arrangements.facility.

60

59


Years ended December 31, 2017, 20162023, 2022 and 2015

2021


Cash Flow from Operating Activities

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Net cash provided by operating activities

 

$

970

 

 

$

860

 

 

$

476

 

2017


2023 compared to 2016

2022


Cash provided by operating activities increased $110decreased $111 million in 20172023 as compared to 2016. Cash flows2022. The decrease is primarily due to more cash used in accounts payable and accrued expenses ($160 million), less cash from operating activities reflects higherunearned income ($60 million) and more cash used in income tax and other payables ($36 million), offset by an increase in cash-related net income of $614 million, offset by higher payments for interest, income taxes($85 million), more cash from accounts receivable and normal fluctuationsunbilled services ($33 million) and less cash used in cash collections from clientsprepaid expenses and accounts payable. Cash collections from clients can vary significantly each year depending on the timing of cash receipts under contractual payment terms relative to the recognition of revenue over a project lifecycle and the timing of renewals.

2016 compared to 2015

Cash provided by operating activities increased $384 million in 2016 as compared to 2015. Cash flows from operating activities reflects higher cash-related net income, lower payments for income taxes and normal fluctuations in cash collections from clients and accounts payable.   

other assets ($27 million).


Cash Flow from Investing Activities

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Net cash (used in) provided by investing activities

 

$

(1,190

)

 

$

1,731

 

 

$

(67

)

Net cash used in investing activities

2017


2023 compared to 2016

During 2017, we had net cash outflows from2022


Cash used in investing activities while during 2016, we had net cash inflows. The decrease of $2,921decreased $403 million in our net cash flows from investing activities was2023 as compared to 2022, primarily due to cash from the acquisition of businesses, including the Merger in 2016 ($1,887 million),less cash used for the acquisition of businesses, in 2017net of cash acquired ($854439 million) and higher cash used for the acquisition of property, equipment, and software in 2017 ($20525 million).

2016 compared to 2015

Cash provided by investing activities increased $1,798 million in 2016 as compared 2015. This increase was primarily related to cash from the acquisition of businesses, including the Merger ($1,887 million) partially, offset by highermore cash used for the acquisitioninvestments in debt and equity securities ($38 million), investments in unconsolidated affiliates ($19 million), purchases of property, equipmentmarketable securities ($1 million) and softwareless cash from other sources ($863 million).


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Cash Flow from Financing Activities

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Net cash used in financing activities

 

$

(72

)

 

$

(2,284

)

 

$

(249

)

2017


2023 compared to 2016

2022


Cash used in financing activities decreased $2,212increased $53 million in 20172023 as compared to 2016. The decrease in2022, primarily due to more debt payments ($2,239 million), cash used in financing activities was primarily related to higher net borrowings under ourrepayments of revolving credit facilities, net of proceeds ($3,781650 million), partiallyand cash payments on contingent consideration and deferred purchase price accruals ($55 million), offset by highermore cash provided by proceeds from debt issuances, net of payment of debt issuance costs ($2,705 million), less cash used to repurchase common stock ($1,523176 million).

2016 compared to 2015

Cash used in financing activities increased $2,035 million in 2016 as compared to 2015. The increase in and less cash used in financing activities was primarilypayments related to lower net borrowing under our credit facilitiesemployee stock option plans ($1,48810 million) and higher cash used to repurchase common stock ($582 million).


Contingencies


We are exposed to certain known contingencies that are material to our investors. The facts and circumstances surrounding these contingencies and a discussion of their effect on us are included in Note 1312 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. These contingencies may have a material effect on our liquidity, capital resources or results of operations. In addition, even where our reservesaccruals are adequate, the incurrence of any of these liabilities may have a material effect on our liquidity and the amount of cash available to us for other purposes.


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


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Information about our Guarantors and the Issuer of our Guaranteed Securities

The accompanying summarized financial information has been prepared and presented pursuant to Rule 3-10 of Regulation S-X, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered,” and Rule 13-01 of Regulation S-X, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralized a Registrant’s Securities.” Each of our current direct and indirect material U.S. wholly owned restricted subsidiaries (excluding IQVIA Solutions Japan LLC and IQVIA Services Japan LLC) (the "Guarantor subsidiaries" and, together with IQVIA Holdings Inc., the “Guarantors”), have jointly and severally, irrevocably and unconditionally, on a senior secured basis, guaranteed the obligations under the 2028 Senior Secured Notes and the 2029 Senior Secured Notes (together, the “Notes”) issued by IQVIA Inc. (the "Issuer").

The following presents the summarized financial information on a combined basis for IQVIA Holdings Inc. (parent company), IQVIA Inc. (issuer of the guaranteed obligations) and the Guarantor subsidiaries, which are collectively referred to as the “obligated group.”

Each Guarantor subsidiary is consolidated by IQVIA Holdings Inc. as of December 31, 2023 and December 31, 2022. Refer to Exhibit 22.1 to this Annual Report on Form 10-K for the detailed list of entities included within the obligated group as of December 31, 2023 and December 31, 2022.

The guarantee of a Guarantor subsidiary with respect to the Notes will be automatically and unconditionally released and discharged and shall terminate and be of no further force and effect, and no further action by such Guarantor subsidiary, the Issuer, or U.S. Bank Trust Company, National Association, as trustee, be required upon the occurrence of any of the following:

a.any sale, exchange, issuance, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the capital stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary, or (ii) all or substantially all of the assets of such Guarantor, in each case if such sale, exchange, issuance, disposition or transfer is made in compliance with the applicable provisions of this Indenture;

b.the release or discharge of the guarantee by such Guarantor of indebtedness under the senior secured term loan facilities and the senior secured revolving credit facilities under that certain Fifth Amended and Restated Credit Agreement, or the release or discharge of such other guarantee that resulted in the creation of such Guarantee, except, in each case, a discharge or release by or as a result of payment of such Indebtedness or under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.11 of the Indenture);

c.the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of the Indenture;

d.the exercise by the Issuer of its Legal Defeasance option or Covenant Defeasance option in accordance with Article VIII of the Indenture or the discharge of the Issuer’s obligations under the Indenture in accordance with the terms of this Indenture;

e.the merger, amalgamation or consolidation of any Guarantor with and into the Issuer or a Guarantor that is the surviving Person in such merger, amalgamation or consolidation, or upon the liquidation of a Guarantor following the transfer of all or substantially all of its assets, in each case in a transaction that complies with the applicable provisions of this Indenture; or

f.as described in Article IX of the Indenture.
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Summarized Combined Financial Information of the Issuer and Guarantors:
Each entity in the summarized combined financial information follows the same accounting policies as described in the consolidated financial statements, see Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Information for the non-Guarantor subsidiaries has been excluded from the combined summarized financial information of the obligated group. The accompanying summarized combined financial information does not reflect investments of the obligated group in non-Guarantor subsidiaries. The financial information of the obligated group is presented on a combined basis; intercompany balances and transactions within the obligated group have been eliminated. The obligated group’s amounts due from and amounts due to non-Guarantor subsidiaries and related parties have been presented in separate line items.
The following table contains summarized combined financial information from the Statements of Unaudited Condensed Consolidated Financial Position of the obligated group as of:
(in millions)December 31, 2023December 31, 2022
Total current assets (excluding amounts due from subsidiaries that are non-Guarantors)$805 $474 
Total noncurrent assets$9,622 $8,875 
Amounts due from subsidiaries that are non-Guarantors$4,762 $3,305 
Total current liabilities$3,471 $2,598 
Total noncurrent liabilities$12,334 $12,270 
Amounts due to subsidiaries that are non-Guarantors$5,556 $5,409 
The following table contains summarized combined financial information from the Statements of Unaudited Condensed Consolidated Operations of the obligated group:
Twelve months endedTwelve months ended
(in millions)December 31, 2023December 31, 2022
Net revenues$6,299 $5,910 
Costs and expenses applicable to net revenues$4,190 $4,066 
Income from operations$912 $491 
Net income (loss)$86 $(73)

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.

Contractual Obligations and Commitments


Below is a summary of our future payment commitments by year under contractual obligations as of December 31, 2017 (in millions):

 

 

2018

 

 

2019 - 2020

 

 

2021 - 2022

 

 

Thereafter

 

 

Total

 

Long-term debt, including interest(1)

 

$

496

 

 

$

1,251

 

 

$

2,336

 

 

$

8,429

 

 

$

12,512

 

Operating leases

 

 

169

 

 

 

250

 

 

 

169

 

 

 

157

 

 

 

745

 

Data acquisition and telecommunication services

 

 

254

 

 

 

397

 

 

 

194

 

 

 

13

 

 

 

858

 

Purchase obligations(2)

 

 

28

 

 

 

29

 

 

 

17

 

 

 

3

 

 

 

77

 

Commitments to unconsolidated affiliates(3)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Benefit obligations(4)

 

 

22

 

 

 

23

 

 

 

24

 

 

 

74

 

 

 

143

 

Uncertain income tax positions(5)

 

 

9

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9

 

Total

 

$

978

 

 

$

1,950

 

 

$

2,740

 

 

$

8,676

 

 

$

14,344

 

2023:

(1)

Interest payments on our debt are based on the interest rates in effect on December 31, 2017.


(2)

Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing provisions and the approximate timing of the transactions.

(in millions)20242025-20262027-2028ThereafterTotal
Long-term debt, including interest (1)
$1,412 $5,612 $5,096 $4,448 $16,568 
Operating leases117 151 60 31 359 
Finance leases13 26 28 283 350 
Data acquisition456 675 235 28 1,394 
Purchase obligations (2)
107 108 19 3 237 
Commitments to unconsolidated affiliates (3)
— — — — — 
Benefit obligations (4)
31 29 32 90 182 
Uncertain income tax positions (5)
16 22 16 — 54 
Total$2,152 $6,623 $5,486 $4,883 $19,144 

(3)

We are currently committed to invest $70 million in private equity funds. As of December 31, 2017, we have funded approximately $54 million of these commitments and we have approximately $16 million remaining to be funded which has not been included in the above table as we are unable to predict when these commitments will be paid.


(4)

Amounts represent expected future benefit payments for our pension and postretirement benefit plans, as well as expected contributions for 2018 for our funded pension benefit plans. We made cash contributions totaling approximately $25 million to our defined benefit plans in 2017, and we estimate that we will make contributions totaling approximately $22 million to our defined benefit plans in 2018. Due to the potential impact of future plan investment performance, changes in interest rates, changes in other economic and demographic assumptions and changes in legislation in foreign jurisdictions, we are not able to reasonably estimate the timing and amount of contributions that may be required to fund our defined benefit plans for periods beyond 2018.

(1)    Interest payments on our debt are based on the interest rates in effect as of December 31, 2023.

(5)

As of December 31, 2017, our liability related to uncertain income tax positions was approximately $95 million, $86 million of which has not been included in the above table as we are unable to predict when these liabilities will be paid due to the uncertainties in the timing of the settlement of the income tax positions.

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(2)    Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing provisions and the approximate timing of the transactions.
(3)    We are currently committed to invest $463 million in private equity funds. As of December 31, 2023, we have funded approximately $170 million of these commitments and we have approximately $293 million remaining to be funded which has not been included in the above table as we are unable to predict when these commitments will be paid.
(4)    Amounts represent expected future benefit payments for our pension and postretirement benefit plans, as well as expected contributions for 2024 for our funded pension benefit plans. We made cash contributions totaling approximately $29 million to our defined benefit plans in 2023, and we estimate that we will make contributions totaling approximately $31 million to our defined benefit plans in 2024. Due to the potential impact of future plan investment performance, changes in interest rates, changes in other economic and demographic assumptions and changes in legislation in foreign jurisdictions, we are not able to reasonably estimate the timing and amount of contributions that may be required to fund our defined benefit plans for periods beyond 2024.
(5)    As of December 31, 2023, our liability related to uncertain income tax positions was approximately $152 million, $98 million of which has not been included in the above table as we are unable to predict when these liabilities will be paid due to the uncertainties in the timing of the settlement of the income tax positions.

Application of Critical Accounting Policies

and Estimates


Note 1 to the audited consolidated financial statements provided elsewhere in this Annual Report on Form 10-K describes the significant accounting policies used in the preparation of the consolidated financial statements. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Our estimates are based on historical experience and various other assumptions we believe are reasonable under the circumstances. We evaluate our estimates on an ongoing basis and make changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results may differ from those estimates.


We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.


Revenue Recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement, (2) the service offering has been delivered to the client, (3) the collection of fees is probable and (4) the arrangement consideration is fixed or determinable. We do not recognize revenue with respect to start-up activities including contract and scope negotiation, feasibility analysis and conflict of interest review associated with contracts.


The costs for these activities are expensed as incurred. For contracts in which portions of revenue are contingent upon the occurrence of uncertain future events we recognize the revenue only after it has been earned and the contingency has been resolved.

In some cases, contracts provide for consideration that is contingent upon the occurrence of uncertain future events. We recognize contingent revenue when the contingency has been resolved and all other criteria for revenue recognition have been met. Cash payments made to clients as incentives to induce the clients to enter into service agreements with us are amortized as a reduction of revenue over the period the services are performed. We record revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenue generating transactions. We do not recognize revenue with respect to start-up activities including contract and scope negotiation, feasibility analysis and conflict of interest review associated with contracts. The costs for these activities are expensed as incurred.

For arrangements that include multiple elements, arrangement consideration is allocated to units of accounting based on the relative selling price. The best evidence of selling price of a unit of accounting is vendor-specific objective evidence (“VSOE”), which is the price we charge when the deliverable is sold separately. When VSOE is not available to determine selling price, we use relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, we use our best estimate of selling price considering all relevant information that is available without undue cost and effort.

We derive the majority of our revenues incontracts within the Commercial Solutions segment from various information and technology service offerings. Our revenue arrangements may include multiple elements. A typical information offerings arrangement (primarily under fixed-price contracts) may include an ongoing subscription-based deliverable for which revenue is recognized ratably as earned over the contract period and/or a one-time delivery of data offerings for which revenue is recognized upon delivery, assuming all other criteria are met. Our subscription arrangements typically have terms ranging from one to three years and are generally non-cancelable and do not contain refund-type provisions. We also offer technology services offerings that enable our clients to make informed business decisions. Technology services offerings consist of a mix of small and large-scale services and consulting projects, multi-year outsourcing contracts and SaaS licenses. These arrangements typically have terms ranging from several weeks to three years, with a majority having terms of one year or less. Revenues for services engagements where deliverables occur ratably over time are recognized on a straight-line basis over the term of the arrangement. Revenues from time and material contracts are recognized as the services are provided. Revenues from fixed price ad hoc services and consulting contracts are recognized either over the contract term based on the ratio of the number of hours incurred for services provided during the period compared to the total estimated hours to be incurred over the entire arrangement (efforts based), or upon delivery (completed contract).

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The majority of revenue in our Research & Development Solutions segment and Integrated Engagement Services segment is recognized based on objective contractual criteria and does not requireare service contracts for clinical research that represent a single performance obligation. We provide a significant estimates or judgments. However, at any point in time we are working on thousands of active client projects, which are governed by individual contracts. Most projects are customized based on the needs of the client, the type of services being provided, therapeutic indication of the drug, geographic locations and other variables. Project specific terms related to pricing, billing terms and the scope and type of services to be provided are generally negotiated and contracted on a project-by-project basis. Changes in the scope of work are common, especially under long-term contracts, and generally resultintegration service resulting in a change in contract value. In such situations, we enter into negotiations for a contract amendmentcombined output, which is clinical trial data that meets the relevant regulatory standards and can be used by the customer to reflect the change in scope and the related price. Depending on the complexity of the amendment, the negotiation process can take from a few weeks for a simple adjustment to several months for a complex amendment. Management may authorize the project team to commence work on activities outside the contract scope while we negotiate and finalize the contract amendment. In these limited cases, if we are not able to obtain a contract amendment from the client, our profit margin on the arrangement may be impacted. This result occurs because our costs of delivery are expensed as they are incurred, while revenue is not recognized unless the client has agreedprogress to the changes in scope and renegotiated pricing terms, the contract value is amended and all other revenue recognition criteria are met. Most contracts are terminable upon 30 to 90 days notice by the client. Our risknext phase of material loss in these situations is mitigated as these contracts generally require payment to us for expenses to wind down thea clinical trial or project, fees earnedsolicit approval of a treatment by the applicable regulatory body. The performance obligation is satisfied over time as the output is captured in data and documentation that is available for the customer to date and, in some cases, a termination fee or a payment of some portionconsume over the course of the fees or profits that could have been earned under the contract if it had not been terminated early. In addition, our contract terms provide for payment terms that generally correspond with performancearrangement and furthers progress of the services. Termination fees areclinical trial. We recognize revenues over time using a cost-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Progress on the performance obligation is measured by the proportion of actual costs incurred to the total costs expected to complete the contract. Costs included in revenues when realization is assured.

See Note 1the measure of progress include direct labor and third-party costs (such as payments to investigators and other reimbursed expenses for our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for details regarding the newclinical monitors). This cost-based method of revenue recognition standard, which will be effective January 1, 2018.

Accounts Receivable and Unbilled Services

Accounts receivable represents amounts billedrequires us to clients. Revenues recognized in excessmake estimates of billingscosts to complete our projects on an ongoing basis. Significant judgment is required to evaluate assumptions related to these estimates. The effect of revisions to estimates related to the transaction price or costs to complete a project are classified as unbilled services. The realization of these amounts is based on the client’s willingness and ability to pay us. We have an allowance for doubtful accounts based on management’s estimate of probable losses we expect to incur resulting from a client failing to pay us. Our allowance for doubtful accounts, and losses from clients failing to pay us, have not been material to our results of operations. If any of these estimates change or actual results differs from expected results, then an adjustment is recorded in the period in which the amounts become reasonably estimable. These adjustmentsestimate is revised. Most contracts may be terminated upon 30 to 90 days' notice by the customer; however, in the event of termination, most contracts require payment for services rendered through the date of termination, as well as for subsequent services rendered to close out the contract. A hypothetical increase of one percent in the estimated costs to complete these service contracts as of December 31, 2023 could have resulted in approximately a material effect on our resultsone percent reduction in total revenues for the year ended December 31, 2023, whereas, a hypothetical decrease of operations.

Investmentsone percent could have resulted in Unconsolidated Affiliates—Equity Method Investments

We have investmentsa one percent increase in unconsolidated affiliates thattotal revenues.


63

Income Taxes

The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the equity method of accounting. Periodically, we review our investments for a decline in value which we believe may be other than temporary. Should we identify such a decline, we will record a loss through earnings to establish a new cost basisasset and liability method. Deferred tax assets and liabilities are recognized for the investment. These losses could have a material adverse effectestimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. We record U.S. deferred taxes based on our results of operations.

Income Taxes

Certain items of income and expense are not recognized on ourthe Federal corporate income tax returns and financial statements in the same year, which creates timing differences. The incomerate of 21%, We account for tax effect of these timing differences results in (1) deferred income tax assets that createrelated to GILTI as a reduction in future income taxes and (2) deferred income tax liabilities that create an increase in future income taxes.period cost when incurred. Recognition of deferred income tax assets is based on management’s belief that it is more likely than not that the income tax benefit associated with certain temporary differences, income tax operating loss, and capital loss carryforwards, and income tax credits, wouldwill be realized. We recorded a valuation allowance to reduce our deferred income tax assets for those deferred income tax items for which it was more likely than not that realization would not occur. We determined the amount of the valuation allowance based, in part, on our assessment of future taxable income and in light of our ongoing income tax strategies. If our estimate of future taxable income or tax strategies changes at any time in the future, we would record an adjustment to our valuation allowance. Recording such an adjustment could have a material effect on our financial condition or results of operations.


64

Income tax expense is based on the distribution of profit before income tax among the various taxing jurisdictions in which we operate, adjusted as required by the income tax laws of each taxing jurisdiction. Changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on our effective income tax rate. We do not consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States. Accordingly, we have provided a deferred income tax liability related to those undistributed earnings. The associated foreign income taxes on our foreign earnings could be available as a credit in the United States on our income taxes. We recognize foreign tax credits to the extent that the recognition is supported by projected foreign source income.See Note 18 to our audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K for details regarding the Tax Cuts

Business Combinations and Jobs Act and the impact on our consolidated financial statements.

Business Combinations

Goodwill


We use the acquisition method to account for business combinations, and accordingly, the identifiable assets acquired, the liabilities assumed and any non-controlling interestinterests in the acquiree are recorded at their estimated fair values on the date of the acquisition. We use significant judgments, estimates and assumptions in determining the estimated fair value of assets acquired, liabilities assumed and non-controlling interestinterests including expected future cash flows and discount rates that reflect the risk associated with the expected future cash flows and estimated useful lives.

When a business combination involves contingent consideration, we recognize a liability equal to the estimated fair value of the contingent consideration obligation at the date of the acquisition. The estimate of fair value of a contingent consideration liability requires subjective assumptions to be made regarding future business results including revenues and net new business, discount rates that reflect the risk associated with the expected future cash flows and probabilities assigned to various potential business result scenarios. We reassess the estimated fair value of the contingent consideration each financial reporting period over the term of the arrangement. Any resulting changes are recognized in earnings and could have a material effect on our results of operations.

Goodwill, Tangible and Identifiable Intangible Assets


We have recorded and allocated to our reporting units the excess of the costpurchase price over the fair value of the net assets acquired, known as goodwill. The recoverability of the goodwill and indefinite-lived intangible assets areis evaluated annually for impairment, or if and when events or circumstances indicate a possible impairment. We perform our annual goodwill impairment evaluation as of July 31.

For the year ended December 31, 2023, we elected to perform a quantitative impairment evaluation for each of our reporting units. We estimated the fair value of each reporting by weighting results of the income and market approaches, with greater weight given to the income approach. Significant estimates used in the income approach include estimates of future revenues, EBITDA, cash flows, long-term growth rates, tax rates, and discount rates. The selected discount rates consider the risk and nature of the respective reporting unit’s cash flows, and the rates of return a market participant would expect to earn by investing in our reporting units. The market approach uses information about the Company as well as other publicly traded guideline companies, including revenue and EBITDA-related multiples and estimates of control premiums. As part of the quantitative impairment evaluation, we compared the fair value of each reporting unit to its carrying value. If results of the evaluation indicate the carrying amount of a reporting unit exceeds its fair value, an impairment charge would be recorded by calculating the implied fair value of the reporting unit goodwill as compared to its carrying amount.

For the year ended December 31, 2022, we performed a qualitative impairment evaluation. The qualitative evaluation requires significant judgments, estimates and assumptions, including those related to macroeconomic conditions, industry and market considerations, cost factors, financial performance, fair value history and other company specific events.
For the years ended December 31, 2023, 2022 and 2021, we determined that there was no impairment of goodwill.

We review the carrying values of other identifiable intangible assets if the facts and circumstances indicate a possible impairment. Goodwill and indefinite-lived intangible assets are not amortized, and other identifiable intangible assets are amortized over their estimated useful lives. We believe that the risk of an impairment to goodwill or indefinite-lived intangible assets is currently very low.

For goodwill, we perform a qualitative analysis to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its book value. This includes a qualitative analysis of macroeconomic conditions, industry and market considerations, internal cost factors, financial performance, fair value history and other company specific events. If this qualitative analysis indicates that it is more likely than not that estimated fair value is less than the book value for the respective reporting unit, we apply a two-step impairment test in which we determine whether the estimated fair value of the reporting unit is in excess of its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the estimated fair value of the reporting unit, we perform the second step of the impairment test to determine the implied estimated fair value of the reporting unit’s goodwill. We determine the implied estimated fair value of goodwill by determining the present value of the estimated future cash flows for each reporting unit and comparing the reporting unit’s risk profile and growth prospects to selected, reasonably similar publicly traded companies. The inherent subjectivity of applying a discounted cash flow and market comparables approach to valuing our assets and liabilities could have a significant impact on our analysis. Any future impairment could have a material adverse effect on our financial condition or results of operations.

For indefinite-lived intangible assets, we perform a qualitative analysis to determine whether it is more likely than not that the estimated fair value of the indefinite-lived intangible asset is less than its carrying value. If this qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of the indefinite-lived intangible asset, we determine the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name. If the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess. Any future impairment could have a material adverse effect on our financial condition or results of operations.


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64

We review the carrying values of property and equipment if the facts and circumstances suggest that a potential impairment may have occurred. If this review indicates that carrying values will not be recoverable, as determined based on undiscounted cash flows over the remaining depreciation or amortization period, we will reduce carrying values to estimated fair value. The inherent subjectivity of our estimates of future cash flows could have a significant impact on our analysis. Any future write-offs of long-lived assets could have a material adverse effect on our financial condition or results of operations.


Stock-based Compensation


We measure compensation cost for stock-based payment awards (stock options and stock appreciation rights) granted to employees and non-employee directors at fair value using the Black-Scholes-Merton option-pricing model and for performance awards using the Monte Carlo simulation model.model. Stock-based compensation expense includes stock-based awards granted to employees and non-employee directors and has been reported in selling, general and administrative expenses in our consolidated statements of income based upon the classification of the individuals who were granted stock-based awards.


The Black-Scholes-Merton option-pricing model requires the use of subjective assumptions, including share price volatility, the expected life of the award, risk-free interest rate and the fair value of the underlying common shares on the date of grant. In developing our assumptions, we take into account the following:


•We calculate expected volatility based on an analysis of the historical volatility of our stock since the Merger in October 2016 and reported data for selected reasonably similar publicly traded companies for which the historical information is available. We plan to continue to use the guideline peer group volatility information until the historical volatility of our common shares is relevant to measure expected volatility for future award grants;

available;

•We determine the risk-free interest rate by reference to implied yields available from United States Treasury securities with a remaining term equal to the expected life assumed at the date of grant;


•We estimate the dividend yield to be zero as we do not currently anticipate paying any future dividends;


•We estimate the average expected life of the award based on our historical experience; and


•We estimate forfeitures based on our historical analysis of actual forfeitures.


We account for our stock-based compensation for performance awards related to compound annual earnings per share (“EPS”) growth over a three year period based on the closing market price of our common stock on the date of grant, and for performance awards related to relative total shareholder return (“TSR”) based on a Monte Carlo simulation model. We record the expense amount of the EPS awards based on our estimates of the likelihood that the various performance targets will be achieved. The estimates are assessed on a quarterly basis. For the TSR awards we record the expense amount evenly over the service period.

Pensions and Other Postretirement Benefits


We provide retirement benefits to certain employees, including defined benefit pension plans and postretirement medical plans. The determination of benefit obligations and expense is based on actuarial models. In order to measure benefit costs and obligations using these models, critical assumptions are made with regard to the discount rate, expected return on plan assets, cash balance crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost trend rates are a key assumption used exclusively in determining costs for our postretirement health care and life insurance benefit plans. Management reviews these critical assumptions at least annually. Other assumptions involve demographic factors such as turnover, retirement and mortality rates. Management reviews these assumptions periodically and updates them when its experience deems it appropriate to do so.

The discount rate is the rate at which the benefit obligations could be effectively settled and is determined annually by management. For United States plans, the discount rate is based on results of a modeling process in which the plans’ expected cash flow (determined on a projected benefit obligation basis) is matched with spot rates developed from a yield curve comprised of high-grade (Moody’s Aa and above, or Standard and Poor’s AA and above) non-callable corporate bonds to develop the present value of the expected cash flow, and then determining the single rate (discount rate), which when applied to the expected cash flow derives that same present value. In the United Kingdom specifically, the discount rate is set based on the yields on a universe of high quality non-callable corporate bonds denominated in the British Pound, appropriate to the duration of plan liabilities. For the other non-United States plans, the discount rate is based on the current yield of an index of high quality corporate bonds. As a sensitivity measure, a 25 basis point increase in the discount rate for our United States plan and United Kingdom plans, absent any offsetting changes in other assumptions, would result in a $1 million decrease and a less than $1 million increase, respectively, in pension expense at December 31, 2017.  

Under the United States qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly. At retirement, the account is converted to a monthly retirement benefit.


66

In selecting an expected return on plan asset assumption, we consider the returns being earned by each plan investment category in the fund, the rates of return expected to be available for reinvestment and long-term economic forecasts for the type of investments held by the plan. The actual return on plan assets will vary from year to year versus this assumption. We believe it is appropriate to use long-term expected forecasts in selecting the expected return on plan assets. As such, there can be no assurance that our actual return on plan assets will approximate the long-term expected forecasts. As a sensitivity measure, a 25 basis point change in the expected return on assets (“EROA”) assumption for our United States plan, absent any offsetting changes in other assumptions, would result in a less than $1 million increase or decrease in pension expense at December 31, 2017. For our United Kingdom plans, a 25 basis point change in the EROA assumption, absent any offsetting changes in other assumptions, would result in a less than $1 million increase or decrease in pension expense at December 31, 2017. While we believe that the assumptions used are reasonable, differences in actual experience or changes in assumptions may materially affect our pension and postretirement obligations and future expense.

We utilize a corridor approach to amortizing unrecognized gains and losses in the pension and postretirement plans. Amortization occurs when the accumulated unrecognized net gain or loss balance exceeds the criterion of 10% of the larger of the beginning balances of the projected benefit obligation or the market-related value of the plan assets. The excess unrecognized gain or loss balance is then amortized using the straight-line method over the average remaining service life of active employees expected to receive benefits. At December 31, 2017, the weighted-average remaining service life of active employees was approximately 12 years.

Foreign Currency

We have significant investments in non-United States countries. Therefore, changes in the value of foreign currencies affect our consolidated financial statements when translated into United States dollars. For all operations outside the United States where we have designated the local currency as the functional currency, assets and liabilities are translated using end-of-period exchange rates; revenues, expenses and cash flows are translated using average rates of exchange prevailing during the period the transactions occurred. Translation gains and losses are included as an adjustment to the accumulated other comprehensive income (loss) component of stockholders’ equity. In addition, gains and losses from foreign currency transactions, such as those resulting from the settlement and revaluation of third-party and intercompany foreign receivables and payables, are included in the determination of net income (loss).

For operations outside the United States that are considered to be highly inflationary or where the United States dollar is designated as the functional currency, monetary assets and liabilities are remeasured using end-of-period exchange rates, whereas non-monetary accounts are remeasured using historical exchange rates, and all remeasurement and transaction adjustments are recognized in other expense (income), net.  

Recently Issued Accounting Standards


Information relating to recently issued accounting standards is included in Note 1 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

67

Item 7A. Quantitative and Qualitative Disclosures About Market Risk


Market risk is the potential loss arising from adverse changes in market rates and prices. In the ordinary course of business, we are exposed to various market risks and we regularly evaluate our exposure to such changes. Our overall risk management strategy seeks to balance the magnitude of the exposure and the cost and availability of appropriate financial instruments. The following analyses present the sensitivity of our financial instruments to hypothetical changes that are reasonably possible over a one-year period.


65

Foreign Currency Exchange Rates


We transact business in more than 100 countries and approximately 5560 currencies and are subject to risks associated with fluctuating foreign currency exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign currency exchange rate movements. Accordingly, we enter into foreign currency forward contracts to minimize the impact of foreign exchange movements on non–functional currency assets and liabilities. We also enter into foreign currency forward contracts to hedge certain forecasted foreign currency cash flows related to service contracts and to hedge non-United States dollar anticipated intercompany royalties.contracts. It is our policy to enter into foreign currency transactions only to the extent necessary to meet our objectives as stated above. We do not enter into foreign currency transactions for investment or speculative purposes. The principal currenciescurrency hedged are the Euro,in 2023 with foreign currency forward contracts was the British Pound, the Japanese Yen, the Swiss Franc and the Canadian dollar.

Pound.


The contractual value of our foreign exchange derivative instruments, all of which were foreign exchange forward contracts was approximately $282$121 million atas of December 31, 2017.2023. The fair value of these contracts is subject to change as a result of potential changes in foreign exchange rates. We assess our market risk based on changes in foreign exchange rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential gain or loss in fair values based on a hypothetical 10% change in foreign currency exchange rates. The potential lossgain in fair value for foreign exchange forward contracts based on a hypothetical 10% decrease in the value of the United States dollar or, in the case of non-United States dollar related contracts, the currency being purchased, was $12 million atas of December 31, 2017.2023. However, the change in the fair value of the foreign exchange forward contracts would likely be offset by a change in the value of the future service contract revenue, royalty or balance sheet exposurerevenues being hedged caused by the currency exchange rate fluctuation. The estimated fair values of the foreign exchange forward contracts were determined based on quoted market prices.


Exchange rate fluctuations affect the United States dollar value of foreign currency revenuerevenues and expenses and may have a significant effect on our results. Excluding the impacts from any outstanding or future hedging transactions, a hypothetical 10% change in average exchange rates used to translate all foreign currencies to the United States dollar would have impacted income before income taxes for 20172023 by approximately $112$54 million. The actual impact of exchange rate movements in the future could differ materially from this hypothetical analysis, based on the mix of foreign currencies and the timing and magnitude of individual exchange rate movements.

Additionally, commencing in 2016,


During the year ended December 31, 2023, we designated a portionthe cross-currency swaps that we entered into in connection with the issuance of our foreign currency denominated debt2029 Senior Secured Notes and Term B-4 Dollar Loans as a hedge of our net investment in certain foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the United States dollar. AsWe do not enter into cross-currency swaps for investment or speculative purposes. The contractual value of our cross-currency swaps was approximately $2,750 million as of December 31, 2017,2023. The fair value of these borrowings (netcross-currency swaps is subject to change as a result of original issue discount) were €4,036 million ($4,835 million). Apotential changes in foreign exchange rates. We assess our market risk based on changes in foreign exchange rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential gain or loss in fair values based on a hypothetical 10% change in foreign currency exchange rates. The potential loss in fair value for cross-currency swaps based on a hypothetical 10% decrease in the value of the United States dollar would lead to a potential loss in fair valuewas $327 million as of $484 million.December 31, 2023. However, this change in fair value would be offset by the change in value of the hedged portion of our net investment in foreign subsidiaries caused by the currency exchange rate fluctuation.


Commencing in 2016 we designated our foreign currency denominated debt as a hedge of our net investment in certain foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the United States dollar. We have continued to designate a portion of new issuances of foreign currency denominated debt as a hedge of our net investment in certain foreign subsidiaries. As of December 31, 2023, our total foreign currency denominated debt was €4,101 million ($4,526 million), with approximately 60% being designated as a hedge. A hypothetical 10% decrease in the value of the United States dollar would lead to a potential loss in fair value of $453 million. However, approximately 60% of this change in fair value would be offset by the change in value of the hedged portion of our net investment in foreign subsidiaries caused by the currency exchange rate fluctuation.

66

Interest Rates


Because we have variable rate debt, fluctuations in interest rates affect our business. We attempt to minimize interest rate risk and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate caps and swaps. We do not enter into interest rate swaps for investment or speculative purposes. We have entered into interest rate caps and swaps with financial institutions that have reset dates and critical terms that match the underlying debt. Accordingly, any change in market value associated with the interest rate caps and swaps is offset by the opposite market impact on the related debt. As of December 31, 2017,2023, we had approximately $5.5 billion$5,500 million of variable rate indebtedness and interest rate caps and swaps with a notional value of $1.6 billion.$3,300 million. Because we do not attempt to hedge all of our variable rate debt, we may incur higher interest costs for the portion of our variable rate debt that is not hedged. Excluding debt covered by hedges, each quarter-point increase or decrease in the interest rate on our variable rate debt would result in our interest expense changing by approximately $10$5 million per year.

68


Marketable Securities

At


As of December 31, 2017,2023, we held investments in marketable equity securities. These investments are classified as either trading securities or available-for-sale securities and are recorded at fair value. These securities are subject to price risk. As of December 31, 2017,2023, the fair value of these investments was $46$146 million based on the quoted market value of the securities. The potential loss in fair value resulting from a hypothetical decrease of 10% in quoted market values was approximately $5$15 million atas of December 31, 2017.

2023.


69

67



Item 8. Financial Statements and Supplementary Data


MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING


The management of IQVIA Holdings Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.2023. In making this assessment, management used the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)(“COSO”). As a result of this assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31, 2017,2023, the Company’s internal control over financial reporting was effective.


The effectiveness of the Company’s internal control over financial reporting as of December 31, 20172023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

/s/ Ari Bousbib

/s/ Michael R. McDonnell

Ronald E. Bruehlman

Ari Bousbib

Ronald E. Bruehlman
Chairman and Chief Executive Officer and President

(Principal Executive Officer)

Michael R. McDonnell

Executive Vice President and Chief Financial Officer

(Principal Executive Officer)
(Principal Financial Officer)


February 16, 2018

70

15, 2024
68


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of IQVIA Holdings Inc.


Opinions on the Financial Statements and Internal Control over Financial Reporting


We have audited the accompanying consolidated balance sheets of IQVIA Holdings Inc. and its subsidiaries (the “Company”) as of December 31, 20172023 and 2016,2022, and the related consolidated statements of income, comprehensive income, cash flows and stockholders’ equity (deficit)and cash flows for each of the three years in the period ended December 31, 2017,2023, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’sCompany's internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control - Integrated Framework(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20172023 and 2016,2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20172023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.


Basis for Opinions


The Company’sCompany's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting,, included in the accompanyingManagement’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’sCompany's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits inin accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.


Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

71

Definition and Limitations of Internal Control over Financial Reporting


A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


69

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Estimating Costs to Complete for Clinical Research Services

As described in Notes 1 and 20 to the consolidated financial statements, revenue of the Research & Development Solutions segment for the year ended December 31, 2023, is $8,395 million, the majority of which relates to service contracts for clinical research that represent a single performance obligation. The Company recognized revenue for these contracts over time using a cost-based input method. Revenue was recognized based on progress on the performance obligation, which was measured by the proportion of actual costs incurred to the total costs expected to complete the contract. Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other reimbursed expenses for the Company’s clinical monitors). This cost-based method of revenue recognition required management to make estimates of costs to complete its projects on an ongoing basis.

The principal considerations for our determination that performing procedures relating to revenue recognition - estimating costs to complete for clinical research services is a critical audit matter are a high degree of auditor effort in performing audit procedures and evaluating audit evidence related to the cost estimates made by management when determining the total expected costs to complete its contracts, specifically the estimation of direct labor and third-party costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the estimation of the total costs to complete for clinical research service contracts. These procedures also included, among others, testing management’s process for determining the estimate of total costs to complete for a sample of clinical research contracts by evaluating the reasonableness of significant assumptions made by management related to direct labor and third-party costs, evaluating the appropriateness of changes to management’s estimate of total costs to complete the contracts, testing actual direct costs incurred, evaluating management’s ability to reasonably estimate the total expected costs to complete contracts by performing a comparison of management’s prior period cost estimates to actual costs, and testing the completeness and accuracy of underlying data used by management.


/s/ PricewaterhouseCoopers LLP

Raleigh, North Carolina

February 16, 201815, 2024


We have served as the Company’s auditor since 2002.


72


70


IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions, except per share data)

 

2017

 

 

2016

 

 

2015

 

(in millions, except per share data)202320222021

Revenues

 

$

8,060

 

 

$

5,364

 

 

$

4,326

 

Reimbursed expenses

 

 

1,679

 

 

 

1,514

 

 

 

1,411

 

Total revenues

 

 

9,739

 

 

 

6,878

 

 

 

5,737

 

Costs of revenue, exclusive of depreciation and amortization

 

 

4,622

 

 

 

3,236

 

 

 

2,705

 

Costs of revenue, reimbursed expenses

 

 

1,679

 

 

 

1,514

 

 

 

1,411

 

Cost of revenues, exclusive of depreciation and amortization

Selling, general and administrative expenses

 

 

1,605

 

 

 

1,011

 

 

 

815

 

Depreciation and amortization

 

 

1,011

 

 

 

289

 

 

 

128

 

Restructuring costs

 

 

63

 

 

 

71

 

 

 

30

 

Merger related costs

 

 

—

 

 

 

87

 

 

 

—

 

Impairment charges

 

 

40

 

 

 

28

 

 

 

2

 

Income from operations

 

 

719

 

 

 

642

 

 

 

646

 

Interest income

 

 

(7

)

 

 

(4

)

 

 

(4

)

Interest expense

 

 

346

 

 

 

144

 

 

 

101

 

Loss on extinguishment of debt

 

 

19

 

 

 

31

 

 

 

8

 

Other expense (income), net

 

 

30

 

 

 

(8

)

 

 

2

 

Income before income taxes and equity in earnings (losses) of

unconsolidated affiliates

 

 

331

 

 

 

479

 

 

 

539

 

Income tax (benefit) expense

 

 

(987

)

 

 

345

 

 

 

159

 

Income before equity in earnings (losses) of unconsolidated affiliates

 

 

1,318

 

 

 

134

 

 

 

380

 

Equity in earnings (losses) of unconsolidated affiliates

 

 

10

 

 

 

(4

)

 

 

8

 

Other (income) expense, net
Income before income taxes and equity in (losses) earnings of unconsolidated affiliates
Income tax expense
Income before equity in (losses) earnings of unconsolidated affiliates
Equity in (losses) earnings of unconsolidated affiliates

Net income

 

 

1,328

 

 

 

130

 

 

 

388

 

Net income attributable to non-controlling interests

 

 

(19

)

 

 

(15

)

 

 

(1

)

Net income attributable to IQVIA Holdings Inc.

 

$

1,309

 

 

$

115

 

 

$

387

 

Earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

6.01

 

 

$

0.77

 

 

$

3.15

 

Basic
Basic

Diluted

 

$

5.88

 

 

$

0.76

 

 

$

3.08

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

217.8

 

 

 

149.1

 

 

 

123.0

 

Basic
Basic

Diluted

 

 

222.6

 

 

 

152.0

 

 

 

125.6

 


The accompanying notes are an integral part of these consolidated financial statements.


73

71


IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Net income

 

$

1,328

 

 

$

130

 

 

$

388

 

Comprehensive income (loss) adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on derivative instruments, net of income tax

   expense (benefit) of $1, $3 and ($4)

 

 

4

 

 

 

(7

)

 

 

(9

)

Defined benefit plan adjustments, net of income tax expense of

   $3, $11 and $—

 

 

5

 

 

 

23

 

 

 

—

 

Foreign currency translation, net of income tax benefit of

   ($201), ($9) and ($5)

 

 

614

 

 

 

(513

)

 

 

(60

)

Reclassification adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

(Gains) losses on derivative instruments included in net income, net of

   income tax expense of $—, $7 and $6

 

 

(1

)

 

 

21

 

 

 

12

 

Amortization of actuarial losses and prior service costs included in net

   income

 

 

1

 

 

 

1

 

 

 

1

 

Comprehensive income (loss)

 

 

1,951

 

 

 

(345

)

 

 

332

 

Comprehensive (income) loss attributable to non-controlling interests

 

 

(26

)

 

 

1

 

 

 

3

 

Comprehensive income (loss) attributable to IQVIA Holdings Inc.

 

$

1,925

 

 

$

(344

)

 

$

335

 

Year Ended December 31,
(in millions)202320222021
Net income$1,358 $1,091 $971 
Comprehensive income adjustments:
Unrealized (losses) gains on derivative instruments, net of income tax (benefit) expense of $(3), $13 and $2(7)40 9 
Defined benefit plan adjustments, net of income tax expense (benefit) of $4, $(3) and $217 (10)69 
Foreign currency translation, net of income tax (benefit) expense of $(55), $106 and $116(89)(361)(281)
Reclassification adjustments:
Reclassifications on derivative instruments included in net income, net of income tax (expense) benefit of $(17), $2 and $4(51)10 12 
Comprehensive income1,218 770 780 
Comprehensive income attributable to non-controlling interests— — (5)
Comprehensive income attributable to IQVIA Holdings Inc.$1,218 $770 $775 


The accompanying notes are an integral part of these consolidated financial statements.


74




72


IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

December 31,

 

December 31,December 31,

(in millions, except per share data)

 

2017

 

 

2016

 

(in millions, except per share data)20232022

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents

Cash and cash equivalents

 

$

959

 

 

$

1,198

 

Trade accounts receivable and unbilled services, net

 

 

1,993

 

 

 

1,707

 

Prepaid expenses

 

 

146

 

 

 

123

 

Income taxes receivable

 

 

47

 

 

 

34

 

Investments in debt, equity and other securities

 

 

46

 

 

 

40

 

Other current assets and receivables

 

 

259

 

 

 

235

 

Total current assets

 

 

3,450

 

 

 

3,337

 

Property and equipment, net

 

 

440

 

 

 

406

 

Operating lease right-of-use assets

Investments in debt, equity and other securities

 

 

8

 

 

 

13

 

Investments in unconsolidated affiliates

 

 

70

 

 

 

69

 

Goodwill

 

 

11,850

 

 

 

10,727

 

Other identifiable intangibles, net

 

 

6,591

 

 

 

6,390

 

Deferred income taxes

 

 

98

 

 

 

89

 

Deposits and other assets

 

 

235

 

 

 

177

 

Deposits and other assets, net

Total assets

 

$

22,742

 

 

$

21,208

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

322

 

 

$

250

 

Accrued expenses

 

 

1,664

 

 

 

1,493

 

Current liabilities:
Current liabilities:
Accounts payable and accrued expenses
Accounts payable and accrued expenses
Accounts payable and accrued expenses

Unearned income

 

 

733

 

 

 

774

 

Income taxes payable

 

 

72

 

 

 

76

 

Current portion of long-term debt

 

 

103

 

 

 

92

 

Other current liabilities

 

 

10

 

 

 

20

 

Total current liabilities

 

 

2,904

 

 

 

2,705

 

Long-term debt, less current portion

 

 

10,122

 

 

 

7,108

 

Deferred income taxes

 

 

918

 

 

 

2,133

 

Operating lease liabilities

Other liabilities

 

 

440

 

 

 

402

 

Total liabilities

 

 

14,384

 

 

 

12,348

 

Commitments and contingencies (Note 1)

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 1 and 12)Commitments and contingencies (Note 1 and 12)

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock and additional paid-in capital, 400.0 shares authorized at

December 31, 2017 and 2016, $0.01 par value, 249.5 and 248.3 shares

issued at December 31, 2017 and 2016, respectively

 

 

10,782

 

 

 

10,602

 

Retained earnings (accumulated deficit)

 

 

655

 

 

 

(399

)

Treasury stock, at cost, 41.4 and 12.9 shares at December 31, 2017 and 2016,

respectively

 

 

(3,374

)

 

 

(1,000

)

Accumulated other comprehensive income (loss)

 

 

46

 

 

 

(570

)

Equity attributable to IQVIA Holdings Inc.’s stockholders

 

 

8,109

 

 

 

8,633

 

Non-controlling interests

 

 

249

 

 

 

227

 

Common stock and additional paid-in capital, 400.0 shares authorized as of December 31, 2023 and 2022, $0.01 par value, 257.2 shares issued and 181.5 shares outstanding as of December 31, 2023; 256.4 shares issued and 185.7 shares outstanding as of December 31, 2022
Common stock and additional paid-in capital, 400.0 shares authorized as of December 31, 2023 and 2022, $0.01 par value, 257.2 shares issued and 181.5 shares outstanding as of December 31, 2023; 256.4 shares issued and 185.7 shares outstanding as of December 31, 2022
Common stock and additional paid-in capital, 400.0 shares authorized as of December 31, 2023 and 2022, $0.01 par value, 257.2 shares issued and 181.5 shares outstanding as of December 31, 2023; 256.4 shares issued and 185.7 shares outstanding as of December 31, 2022
Retained earnings
Treasury stock, at cost, 75.7 and 70.7 shares as of December 31, 2023 and 2022, respectively
Accumulated other comprehensive loss
Total stockholders’ equity
Total stockholders’ equity

Total stockholders’ equity

 

 

8,358

 

 

 

8,860

 

Total liabilities and stockholders’ equity

 

$

22,742

 

 

$

21,208

 


The accompanying notes are an integral part of these consolidated financial statements.

73

75

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Year Ended December 31,

 

Year Ended December 31,Year Ended December 31,

(in millions)

 

2017

 

 

2016

 

 

2015

 

(in millions)202320222021

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,328

 

 

$

130

 

 

$

388

 

Net income
Net income

Adjustments to reconcile net income to cash provided by operating

activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,011

 

 

 

289

 

 

 

128

 

Depreciation and amortization
Depreciation and amortization

Amortization of debt issuance costs and discount

 

 

9

 

 

 

30

 

 

 

9

 

Amortization of accumulated other comprehensive loss on terminated

interest rate swaps

 

 

3

 

 

 

3

 

 

 

8

 

Stock-based compensation

 

 

106

 

 

 

80

 

 

 

38

 

Impairment of goodwill, identifiable intangible and long-lived assets

 

 

40

 

 

 

28

 

 

 

2

 

Stock-based compensation
Stock-based compensation

Gain on disposals of property and equipment, net

 

 

(1

)

 

 

(1

)

 

 

(1

)

(Earnings) loss from unconsolidated affiliates

 

 

(10

)

 

 

8

 

 

 

(8

)

Gain on disposals of property and equipment, net
Gain on disposals of property and equipment, net
Losses (earnings) from unconsolidated affiliates

(Gain) loss on investments, net

 

 

(8

)

 

 

(13

)

 

 

1

 

(Benefit from) provision for deferred income taxes

 

 

(1,216

)

 

 

135

 

 

 

18

 

Excess income tax benefits from stock-based award activities

 

 

—

 

 

 

(41

)

 

 

(39

)

Benefit from deferred income taxes

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable and unbilled services
Accounts receivable and unbilled services

Accounts receivable and unbilled services

 

 

(142

)

 

 

(62

)

 

 

(246

)

Prepaid expenses and other assets

 

 

(54

)

 

 

(8

)

 

 

15

 

Accounts payable and accrued expenses

 

 

90

 

 

 

160

 

 

 

104

 

Unearned income

 

 

(104

)

 

 

52

 

 

 

54

 

Income taxes payable and other liabilities

 

 

(82

)

 

 

70

 

 

 

5

 

Net cash provided by operating activities

 

 

970

 

 

 

860

 

 

 

476

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of property, equipment and software

 

 

(369

)

 

 

(164

)

 

 

(78

)

Net cash (paid for) assumed from acquisition of businesses

 

 

(854

)

 

 

1,887

 

 

 

32

 

Disposition of business, net of cash disposed

 

 

12

 

 

 

—

 

 

 

—

 

Sales (purchases) of trading securities, net

 

 

2

 

 

 

(40

)

 

 

—

 

Proceeds from corporate owned life insurance policies

 

 

—

 

 

 

21

 

 

 

—

 

Proceeds from sale of equity securities

 

 

—

 

 

 

41

 

 

 

—

 

Acquisition of property, equipment and software
Acquisition of property, equipment and software
Acquisition of businesses, net of cash acquired
Purchases of marketable securities, net
Purchases of marketable securities, net
Purchases of marketable securities, net

Investments in unconsolidated affiliates, net of payments received

 

 

15

 

 

 

(17

)

 

 

(12

)

Termination of interest rate swaps

 

 

—

 

 

 

—

 

 

 

(11

)

(Investments in) proceeds from sale of debt and equity securities
(Investments in) proceeds from sale of debt and equity securities
(Investments in) proceeds from sale of debt and equity securities

Other

 

 

4

 

 

 

3

 

 

 

2

 

Net cash (used in) provided by investing activities

 

 

(1,190

)

 

 

1,731

 

 

 

(67

)

Net cash used in investing activities

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of debt

 

 

5,242

 

 

 

466

 

 

 

2,249

 

Proceeds from issuance of debt
Proceeds from issuance of debt

Payment of debt issuance costs

 

 

(50

)

 

 

(7

)

 

 

(22

)

Repayment of debt

 

 

(2,883

)

 

 

(1,949

)

 

 

(2,057

)

Repayment of debt and principal payments on finance leases

Proceeds from revolving credit facility

 

 

1,921

 

 

 

172

 

 

 

—

 

Repayment of revolving credit facility

 

 

(1,767

)

 

 

—

 

 

 

—

 

Principal payments on capital lease obligations

 

 

(2

)

 

 

(2

)

 

 

(4

)

Payment of contingent consideration

 

 

(4

)

 

 

(5

)

 

 

(3

)

Stock issued under employee stock purchase and option plans

 

 

91

 

 

 

97

 

 

 

64

 

Payments related to employee stock option plans
Payments related to employee stock option plans
Payments related to employee stock option plans

Repurchase of common stock

 

 

(2,620

)

 

 

(1,097

)

 

 

(515

)

Excess income tax benefits from stock-based award activities

 

 

—

 

 

 

41

 

 

 

39

 

Acquisition of Quest's non-controlling interest
Acquisition of Quest's non-controlling interest
Acquisition of Quest's non-controlling interest
Contingent consideration and deferred purchase price payments

Net cash used in financing activities

 

 

(72

)

 

 

(2,284

)

 

 

(249

)

Effect of foreign currency exchange rate changes on cash

 

 

53

 

 

 

(86

)

 

 

(50

)

(Decrease) increase in cash and cash equivalents

 

 

(239

)

 

 

221

 

 

 

110

 

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

 

 

1,198

 

 

 

977

 

 

 

867

 

Cash and cash equivalents at end of period

 

$

959

 

 

$

1,198

 

 

$

977

 


The accompanying notes are an integral part of these consolidated financial statements.

76

74


IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in millions)

 

Common

Stock

Shares

 

 

Treasury

Stock

Shares

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Retained Earnings (Accumulated Deficit)

 

 

Treasury

Stock

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Non-

controlling

Interests

 

 

Total

 

(in millions)Common Stock SharesTreasury Stock SharesCommon StockAdditional Paid-In CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive (Loss) IncomeNon-controlling InterestsTotal

Balance, December 31, 2014

 

 

124.1

 

 

 

—

 

 

 

1

 

 

 

143

 

 

 

(788

)

 

 

—

 

 

 

(59

)

 

 

—

 

 

 

(703

)

Balance, December 31, 2020

Issuance of common stock

 

 

3.1

 

 

 

—

 

 

 

—

 

 

 

65

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65

 

Repurchase of common stock

 

 

(7.8

)

 

 

—

 

 

 

—

 

 

 

(455

)

 

 

(61

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(516

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31

 

Income tax benefits from stock-based award activities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

39

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

39

 

Q2 Solutions business combination

 

 

—

 

 

 

—

 

 

 

—

 

 

 

423

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

423

 

Non-controlling interest related to Q2 Solutions transaction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(231

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

231

 

 

 

—

 

Deferred tax impact of the Q2 Solutions transaction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7

)

Acquisition of Quest's non-controlling interest, net of tax

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

387

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

388

 

Unrealized loss on derivative instruments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9

)

 

 

—

 

 

 

(9

)

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(56

)

 

 

(4

)

 

 

(60

)

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

13

 

Balance, December 31, 2015

 

 

119.4

 

 

 

—

 

 

 

1

 

 

 

8

 

 

 

(462

)

 

 

—

 

 

 

(111

)

 

 

228

 

 

 

(336

)

Issuance of common stock

 

 

130.4

 

 

 

—

 

 

 

1

 

 

 

10,522

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,523

 

Repurchase of common stock before October 3, 2016

 

 

(1.5

)

 

 

—

 

 

 

—

 

 

 

(46

)

 

 

(52

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(98

)

Repurchase of common stock on or after October 3, 2016

 

 

—

 

 

 

(12.9

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,000

)

 

 

—

 

 

 

—

 

 

 

(1,000

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

76

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

76

 

Income tax benefits from stock-based award activities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

41

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

41

 

Investment by non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

115

 

 

 

—

 

 

 

—

 

 

 

15

 

 

 

130

 

Unrealized gain on derivative instruments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7

)

 

 

—

 

 

 

(7

)

Unrealized gains on derivative instruments, net of tax

Defined benefit plan adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

23

 

 

 

—

 

 

 

23

 

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(497

)

 

 

(16

)

 

 

(513

)

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

22

 

 

 

—

 

 

 

22

 

Balance, December 31, 2016

 

 

248.3

 

 

 

(12.9

)

 

 

2

 

 

 

10,600

 

 

 

(399

)

 

 

(1,000

)

 

 

(570

)

 

 

227

 

 

 

8,860

 

Balance, December 31, 2021

Issuance of common stock

 

 

3.7

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Repurchase of common stock

 

 

—

 

 

 

(28.5

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,374

)

 

 

—

 

 

 

—

 

 

 

(2,374

)

Repurchase and retirement of common stock

 

 

(2.5

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(255

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(255

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

180

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

180

 

Distribution to non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

(4

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,309

 

 

 

—

 

 

 

—

 

 

 

19

 

 

 

1,328

 

Unrealized gain on derivative instruments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

—

 

 

 

4

 

Unrealized gains on derivative instruments, net of tax

Defined benefit plan adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5

 

 

 

—

 

 

 

5

 

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

607

 

 

 

7

 

 

 

614

 

Balance, December 31, 2017

 

 

249.5

 

 

 

(41.4

)

 

$

2

 

 

$

10,780

 

 

$

655

 

 

$

(3,374

)

 

$

46

 

 

$

249

 

 

$

8,358

 

Reclassification adjustments, net of tax
Balance, December 31, 2022
Issuance of common stock
Repurchase of common stock, net of tax
Stock-based compensation
Net income
Unrealized losses on derivative instruments, net of tax
Defined benefit plan adjustments, net of tax
Foreign currency translation, net of tax
Reclassification adjustments, net of tax
Balance, December 31, 2023


The accompanying notes are an integral part of these consolidated financial statements.

77

statements.
75


IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


1. Summary of Significant Accounting Policies


The Company

Conducting business in more than 100 countries with over 55,000 employees,


IQVIA Holdings Inc. (together with its subsidiaries, the “Company” or “IQVIA”) is a leading integrated informationglobal provider of advanced analytics, technology solutions and technology-enabled healthcare service provider worldwide, dedicated to helping its clients improve their clinical scientific and commercial results.

On October 3, 2016, Quintiles Transnational Holdings Inc. (“Quintiles”) completed its previously announced merger of equals transaction (the “Merger”) with IMS Health Holdings, Inc. (“IMS Health”). Pursuantresearch services to the termslife sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data resources, extensive domain expertise and network of partners. IQVIA Connected Intelligence delivers actionable insights and powerful solutions with speed and agility — enabling customers to accelerate the merger agreement dated asclinical development and commercialization of May 3, 2016 between Quintiles and IMS Health (the “Merger Agreement”), IMS Health was merged with and into Quintiles, and the separate corporate existence of IMS Health ceased, with Quintiles continuing as the surviving corporation (the “Surviving Corporation”). Immediately prior to the completion of the Merger, Quintiles reincorporated as a Delaware corporation. The Surviving Corporation changed its name to Quintiles IMS Holdings, Inc (“QuintilesIMS”). At the effective time of the Merger, each issued and outstanding share of IMS Health common stock, par value $0.01 per share (“IMS Health common stock”), was automatically converted into 0.3840 of a share of the Company’s common stock, par value $0.01 per share. In addition, immediately following the effective time of the Merger, Quintiles Transnational Corp (“Quintiles Corp.”), a direct subsidiary of Quintiles, was merged with and into IMS Health Incorporated, following which IMS Health Incorporated will continue as a direct, wholly-owned subsidiary of the Surviving Corporation. See Note 15innovative medical treatments that improve healthcare outcomes for additional information regarding the Merger.

On November 6, 2017,patients. With approximately 87,000 employees, the Company filedconducts business in more than 100 countries.


IQVIA is a Certificateglobal leader in protecting individual patient privacy. The Company uses a wide variety of Amendmentprivacy-enhancing technologies and safeguards to its Amendedprotect individual privacy while generating and Restated Certificateanalyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. IQVIA’s insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of Incorporation (the “Certificate of Amendment”)diseases, human behaviors and scientific advances, in an effort to effect a change of the Company’s name from “Quintiles IMS Holdings, Inc.” to “IQVIA Holdings Inc.” (the “Name Change”).

On November 15, 2017, shares of the Company commenced trading under an updated New York Stock Exchange ticker symbol, “IQV” (formerly the shares traded under the ticker symbol “Q”). 

advance their path toward cures.


Principles of Consolidation


The accompanying consolidated financial statements include the accounts and operations of the Company, its subsidiaries and investments in which the Company has control. Amounts pertaining to the non-controlling ownership interests held by third parties in the operating results and financial position of the Company’s majority-owned subsidiaries are reported as non-controlling interests. Intercompany accounts and transactions have been eliminated in consolidation.


Use of Estimates


The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. These estimates are based on historical experience and various other assumptions believed reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results may differ from those estimates.


78

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Foreign Currencies


The Company’s consolidated financial statements are reported in United States dollars and, accordingly, the Company’s results of operations are impacted by fluctuations in exchange rates that affect the translation of its revenues and expenses denominated in foreign currencies into United States dollars for purposes of reporting its consolidated financial results. Assets and liabilities recorded in foreign currencies on the books of foreign subsidiaries are translated at the exchange rate on the balance sheet date. Revenues, costs and expenses are translated at average rates of exchange during the year. Translation adjustments resulting from this process are charged or credited to the accumulated other comprehensive (loss) income (loss) (“AOCI”) component of stockholders’ equity (deficit).equity. The Company is subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of a transaction. The Company earns revenuerevenues from its service contracts over a period of several months and, in some cases, over a period of several years. Accordingly, exchange rate fluctuations during this period may affect the Company’s profitability with respect to such contracts.


For operations outside the United States that are considered to be highly inflationary or where the United States dollar is designated as the functional currency, monetary assets and liabilities are remeasured using end-of-period exchange rates, whereas non-monetarynonmonetary accounts are remeasured using historical exchange rates, and all remeasurement and transaction adjustments are recognized in other (income) expense, (income), net. Other expense (income), net, includes foreign currency net losses (gains) for 2017, 2016 and 2015 of approximately $40 million, $6 million and ($5) million, respectively. The foreign currency losses in 2017 were primarily the result of the combination of changes in intercompany loan balances from corporate legal entity integration and a weaker U.S. dollar.


76

Cash Equivalents


The Company considers all highly liquid investments with an initial maturity of three months or less when purchased to be cash equivalents.

Investments in Marketable Securities

Investments in marketable securities are classified as either trading or available-for-sale and measured at fair market value. Realized and unrealized gains and losses on trading securities are included in other expense (income), net, on the accompanying consolidated statements of income. Realized gains and losses on available-for-sale securities are included in other expense (income), net, on the accompanying consolidated statements of income. Unrealized gains and losses, net of deferred income taxes, on available-for-sale securities are included in the AOCI component of stockholders’ equity (deficit) until realized. Any gains or losses from the sales of investments or other-than-temporary declines in fair value are computed by specific identification.

Equity Method Investments

The Company’s investments in and advances to unconsolidated affiliates are accounted for under the equity method if the Company exercises significant influence or has an investment in a limited partnership that is considered to be greater than minor. These investments and advances are classified as investments in and advances to unconsolidated affiliates on the accompanying consolidated balance sheets. The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments in equity in earnings of unconsolidated affiliates on the accompanying consolidated statements of income. The Company reviews its investments in and advances to unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.


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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued   

Derivatives


The Company uses derivative instruments to manage exposures to interest rates and foreign currencies. Derivatives are recorded on the balance sheet at fair value at each balance sheet date utilizing pricing models for non-exchange-traded contracts.

At inception, the Company designates whether or not the derivative instrument is an effective hedge of an asset, liability or firm commitment which is then classified as either a cash flow hedge or a fair value hedge. If determined to be an effective cash flow hedge, changes in the fair value of the derivative instrument are recorded as a component of AOCI until realized. The Company includes the impact from these hedges in the same line item as the hedged item on the consolidated statements of cash flows. Changes in fair value of effective fair value hedges are recorded in earnings as an offset to the changes in the fair value of the related hedged item. Hedge ineffectiveness, if any, is immediately recognized in earnings. Changes in the fair values of derivative instruments that are not an effective hedge are recognized in earnings. When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies gains or losses that were accumulated in AOCI to earnings in other expense (income), net for foreign exchange derivatives and interest expense for interest rate derivatives on the consolidated statements of income. Cash flows are classified consistent with the underlying hedged item. The Company has entered, and may in the future enter, into derivative contracts (caps, swaps, forwards, calls or puts, warrants, for example) related to its debt investments in marketable equity securities and forecasted foreign currency transactions.

Accrued Loyalty

The Company owns businesses that manage co-pay reimbursements on behalfdoes not enter into derivative instruments for investment or speculative purposes.


The Company designates its cross-currency swaps and a portion of its pharmaceutical customers. These customers prefundforeign currency denominated debt as a hedge of its net investment in certain foreign subsidiaries to reduce the reimbursementsvolatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the United States dollar. Foreign exchange gains or losses on the remeasurement of the debt designated as part of a hedge of net investments is recognized in the cumulative translation adjustment component of AOCI with the related offset in long-term debt. Those amounts would be reclassified from AOCI to earnings upon the sale or substantial liquidation of the net investments. The change in fair value of the cross-currency swaps are also recognized in the cumulative translation adjustment component of AOCI and would be reclassified from AOCI to earnings upon the Company includes this cash on its balance sheet. sale or substantial liquidation of the net investments. The interest rate component of the cross-currency swaps is excluded from the assessment of hedge effectiveness and, thus, is recognized as a reduction to interest expense over the life of the cross-currency swaps.    

Business Combinations and Goodwill

The Company draws on this cash to pay pharmacies as consumers use these programs. Accrued loyalty was $143 million and $131 million, as of December 31, 2017 and 2016, respectively, and included within accrued expenses on the consolidated balance sheet.

Billed and Unbilled Services and Unearned Income

In general, prerequisites for billings and payments are established by contractual provisions including predetermined payment schedules, which may or may not correspond to the timing of the performance of services under the contract. Unbilled services arise when services have been rendered for which revenue has been recognized but the clients have not been billed.

In some cases, payments received are in excess of revenue recognized. Payments received in advance of services being provided are deferred as unearned income on the consolidated balance sheet. As the contracted services are subsequently performed and the associated revenue is recognized, the unearned income balance is reduced by the amount of the revenue recognized during the period.

Allowance for Doubtful Accounts

The Company’s allowance for doubtful accounts is determined based on a variety of factors that affect the potential collectability of the related receivables, including length of time the receivables are past due, client credit ratings, financial stability of the client, specific one-time events and client payment history. In addition, in circumstances where the Company is made aware of a specific client’s inability to meet its financial obligations, a specific allowance is established. The accounts are individually evaluated on a regular basis and reserves are established as deemed appropriate based on the above criteria.

Receivables Financing Facility

Advances received under the Company’s receivables financing facility are accounted for as borrowings secured by the receivables and included in net cash provided by financing activities. The Company services the collateralized accounts receivables and the cash flows for the underlying receivables are included in cash provided by operating activities. The collateralized accounts receivables are included in trade accounts receivable and unbilled services, net.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Business Combinations

Business combinations are accounted for usinguses the acquisition method of accounting. Theto account for business combinations, and accordingly, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date of the acquisition. Goodwill representsThe Company uses significant judgments, estimates and assumptions in determining the estimated fair value of assets acquired, liabilities assumed and non-controlling interests including expected future cash flows, and discount rates that reflect the risk associated with the expected future cash flows and estimated useful lives.


The Company records and allocates to its reporting units the excess of the purchase pricecost over the estimated fair value of the net assets acquired, including the amount assigned to identifiable intangible assets. Whenknown as goodwill. On an annual basis, and if a business combination involves contingent consideration,triggering event occurs, the Company recognizesperforms a liability equalqualitative analysis to determine whether it is more likely than not that the estimated fair value of the contingent consideration obligation at the datea reporting unit is less than its carrying amount. This includes a qualitative analysis of the acquisition. Subsequent changes inmacroeconomic conditions, industry and market considerations, cost factors, financial performance, fair value history and other company specific events. If this qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value for the respective reporting unit, the Company would then need to calculate the fair value of the contingent consideration are recognized in earnings inreporting unit. The Company may also choose to bypass the periodqualitative assessment for any or all reporting units and proceed directly to a quantitative assessment, which involves estimating the fair value of the change. Acquisition-related costs are expensed as incurred. Company's reporting units and comparing to the carrying value of the reporting units. If the reporting unit calculated fair value is less than the carrying amount, the Company would record an impairment charge for the difference, with the impairment charge not to exceed the carrying amount of goodwill.

The consolidated financial statements includeCompany reviews the resultscarrying values of operations of business combinations sinceother identifiable definite-lived intangible assets if the acquisition date.

facts and circumstances indicate a possible impairment.

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Long-Lived Assets


Property and equipment are stated at cost and are depreciated using the straight-line method over the shorter of the asset’s estimated useful life or the lease term, if related to leased property, as follows:


Buildings and leasehold improvements

3

3 -

40 years

Equipment

3

3 -

10 years

Furniture and fixtures

5

5 -

10 years

Transportation equipment

3

3 -

20 years


Definite-lived other identifiable intangible assets are amortized primarily using an accelerated method that reflects the pattern in which the Company expects to benefit from the use of the asset over its estimated remaining useful life as follows:


Trademarks

Client relationships and trade names

backlog

1

1 - 17

25 years

Contract backlog and client relationships

1 - 25 years

Software and related assets

1

1 - 9

10 years

Databases

Trademarks, trade names and other

1

1 - 9

17 years

Databases

1-9 years
Non-compete agreements and other

2

1 -

5 years

Goodwill and indefinite-lived identifiable intangible assets, which consist of a trade name, are not amortized but evaluated for impairment annually, or more frequently if events or changes in circumstances indicate an impairment.


Included in software and related itemsassets is the capitalized cost of internal-use software used in supporting the Company’s business. Qualifying costs incurred during the application development stage are capitalized and amortized over their estimated useful lives. Costs are capitalized from completion of the preliminary project stage and when it is considered probable that the software will be used to perform its intended function, up until the time the software is placed into service. The Company recognized $134$475 million, $44$419 million and $38$211 million of amortization expense in 2017, 2016for the years ended December 31, 2023, 2022 and 2015,2021, respectively, related to software and related assets.


The carrying values of property, equipment and intangible and other long-lived assets are reviewed for recoverability at the asset grouping level to determine if the facts and circumstances suggest that a potential impairment may have occurred. If this review indicates that carrying values will not be recoverable, as determined based on undiscounted cash flow projections, the Company will record an impairment charge to reduce carrying values to estimated fair value. See Note 17 for information regarding the impairment chargesThere were no impairments recognized in 2017the years ended December 31, 2023, 2022 and 2016. During 2015, the Company recognized a $2 million impairment charge for long-lived assets related to a facility closure in Japan.2021.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued  

Revenue Recognition

The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service offering has been delivered to the client; (3) the collection of the fees is probable; and (4) the arrangement consideration is fixed or determinable.


The Company’s arrangements are primarily service contracts that range in duration from a few months to several years.

In some cases, contracts provide for consideration that is contingent upon the occurrence of uncertain future events. The Company recognizes contingent revenuerevenues when control of these services is transferred to the contingency has been resolved and all other criteriacustomer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services. The Company determines revenue recognition have been met.utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenues when, or as, the Company transfers control of the product or service for each performance obligation. Cash payments made to clientscustomers as incentives to induce the clientscustomers to enter into service agreements with the Company are amortized as a reduction of revenuerevenues over the period the services are performed. The Company records revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenuerevenues generating transactions. The Company does not recognize revenue with respect to start-up activities including contract and scope negotiation, feasibility analysis and conflict of interest review associated with contracts. The costs for these activities are expensed as incurred.

For the arrangements that include multiple elements, arrangement consideration is allocated to units of accounting based on the relative selling price. The best evidence of selling price of a unit of accounting is vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available to determine selling price, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price considering all relevant information that is available without undue cost and effort.


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The Company derives the majority of its revenues in the CommercialTechnology & Analytics Solutions segment from various information and technology service offerings. A typical informationInformation offerings arrangement (primarily under fixed-price contracts) maytypically include multiple performance obligations including an ongoing subscription-based deliverable for which revenue isrevenues are recognized ratably as earned over the contract period, and/or a one-time deliverydeliverable of data offerings for which revenue isrevenues are recognized upon delivery, assuming all other criteria are met.delivery. The customer is able to benefit from the provision of data as it is received. The Company’s subscription arrangements typically have terms ranging from one to three years and are generally non-cancelable and do not contain refund-type provisions. Technology services offerings consistmay contain multiple performance obligations consisting of a mix of small and large-scale services and consulting projects, multi-year outsourcing contracts and Software-as-a-Service (“SaaS”) licenses.arrangements. These arrangements typically have terms ranging from several weeks to three years, with a majority having terms of one year or less. For arrangements that include multiple performance obligations, the transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. For these contracts, the standalone selling prices are based on the Company’s normal pricing practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. Revenues for services engagements where deliverables occurthe transfer of control occurs ratably over time are recognized on a straight-line basis over the term of the arrangement. Revenues from time and material contracts are recognized based on hours as the services are provided. Revenues from fixed price ad hoc services and consulting contracts are recognized either over the contract term based on the ratio of the number of hours incurred for services provided during the period compared to the total estimated hours to be incurred over the entire arrangement (efforts based), or upon delivery (completed contract)(hours-based).

Technology services offerings meet the over time criterion, as another party would not need to substantially re-perform the work already completed to satisfy the remaining obligations if the services were migrated.


The majority of the Company’s contracts within the Research & Development Solutions segment are service contracts for clinical research that represent a single unitperformance obligation. The Company provides a significant integration service resulting in a combined output, which is clinical trial data that meets the relevant regulatory standards and can be used by the customer to progress to the next phase of accounting.a clinical trial or solicit approval of a treatment by the applicable regulatory body. The performance obligation is satisfied over time as the output is captured in data and documentation that is available for the customer to consume over the course of the arrangement and furthers progress of the clinical trial. The Company recognizes revenuerevenues over time using a cost-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation. Progress on its clinical research services contracts as services are performed primarily on a proportionalthe performance basis, generally using output measures that are specificobligation is measured by the proportion of actual costs incurred to the service provided. Examples of output measures include among others, number of investigators enrolled, number of site initiation visits and number of monitoring visits completed. Revenue is determined by dividingtotal costs expected to complete the actual units of work completed by the total units of work required under the contract and multiplying that ratio by the total contract value. The total contract value, or total contractual payments, represents the aggregate contracted price for each of the agreed upon services to be provided. Changescontract. Costs included in the scopemeasure of work are common, especially under long-term contracts,progress include direct labor and generally result in a change in contract value. Oncethird-party costs (such as payments to investigators and other reimbursed expenses for the client has agreedCompany’s clinical monitors). This cost-based method of revenue recognition requires the Company to make estimates of costs to complete its projects on an ongoing basis. Significant judgment is required to evaluate assumptions related to these estimates. The effect of revisions to estimates related to the changestransaction price or costs to complete a project are recorded in scope and renegotiated pricing terms, the contract valueperiod in which the estimate is amended and revenue is recognized, as described above. To the extent that contracts involve multiple elements, the Company follows the allocation methodology described above and recognizes revenue for each unit of accounting on a proportional performance basis.revised. Most contracts may be terminated upon 30 to 90 daysdays' notice by the client,customer; however, in the event of termination, contract provisions typicallymost contracts require payment for services rendered through the date of termination, as well as for subsequent services rendered to close out the contract.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued  

The Company derives the majority of its revenues in its Integrated Engagement Servicesthe Company's Contract Sales & Medical Solutions segment on a fee-for-service basisis from contract salesforce to clients within the biopharmaceutical industry. Feesindustry and broader healthcare market and recognized over time using a single measure of progress dependent on these arrangements are billed based on a contractual per-diem or hourly rate basis and revenue is recognized primarily on a time and materials basis.the performance obligation. Some of the Company’s Integrated Engagement ServicesCompany's Contract Sales & Medical Solutions contracts arecontain multiple element arrangements,performance obligations with elementsdistinct promises including recruiting, trainingsales force automation and deployment of sales representatives. The natureCompany utilizes a single measure of progress for each performance obligation to recognize revenues, which includes deployment of sales representatives based on employee days worked; recruiting based on candidates recruited; sales force automation set-up based on hours worked; and sales force automation hosting and maintenance based on usage. These services meet the over time criterion as the customer consumes the benefit as activities are performed and another party would not need to substantially re-perform the work already completed to satisfy the remaining obligations if the services were migrated to another party.

Variable Consideration

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as performance incentives (including royalty payments, bonuses, or penalty clauses that can either increase or decrease the transaction price). Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the terms of these multiple element arrangements will vary based on the customized needs of the Company’s clients. For contractsCompany's anticipated performance and all information (historical, current and forecasted) that have multiple elements,is reasonably available to the Company follows the allocation methodology described above and recognizes revenue forreevaluated each unit of accounting on a time and materials basis. The Company’s Integrated Engagement Services contracts sometimes include variable fees that are based on a percentage of service sales (royalty payments). The Company recognizes revenue on royalty payments when the variable components become fixed or determinable and all other revenue recognition criteria have been met, which generally only occurs upon the sale of the underlying service(s) and upon the Company’s receipt of information necessary to make a reasonable estimate.

reporting period.

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Reimbursed Expenses


The Company includes reimbursed expenses in total revenues and costscost of revenuerevenues as the Company is deemedprimarily responsible for fulfilling the promise to beprovide the primary obligor inspecified service, including the applicable arrangements.integration of the related services into a combined output to the customer, which are inseparable from the integrated service. These costs include such items as payments to investigators and travel expenses for the Company’s clinical monitors and sales representatives.

representatives, over which the Company has discretion in establishing prices. The Company controls the good or service and has collectioninventory risk on contractually reimbursable expenses, and, from time to time,as sometimes the Company is unable to obtain reimbursement from the clientcustomer for costs incurred. When such an expense is


Change Orders

Changes in the scope of work are common, especially under long-term contracts, and generally result in a change in transaction price. Change orders are evaluated on a contract-by-contract basis to determine if they should be accounted for as a new contract or as part of the existing contract. Generally, services from change orders are not reimbursed, it is classified as costs of revenuedistinct from the original performance obligation. As a result, the effect that the contract modification has on the consolidated statementscontract revenues, and measure of income.

Expenses

The Company’s costs and expenses are comprised primarilyprogress, is recognized as an adjustment to revenues when it occurs.


Cost of costsRevenues

Cost of revenue, reimbursed expenses and selling, general and administrative expenses. Costs of revenuerevenues include (i) compensation and benefits for billable employees and personnel involved in production, data management and delivery, and the costs of acquiring and processing data for the Company’s information offerings; (ii) costs of staff directly involved with delivering technology-related services offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements; and other(iii) reimbursed expenses directly related to service contracts such as courier fees, laboratory supplies, professional services and travel expenses. As noted above, reimbursed expensesthat are comprised principally of payments to investigators who oversee clinical trials and travel expenses for the Company’s clinical monitors and sales representatives. Selling, generalrepresentatives; and administrative(iv) other expenses include costsdirectly related to sales, marketing, and administrative functions (including human resources, legal, finance and general management) for compensation and benefits, travel,service contracts such as courier fees, laboratory supplies, professional services training and expenses for information technology (“IT”), facilitiestravel expenses.

Trade Receivables, Unbilled Services and depreciationUnearned Income

In general, billings and amortization.

Concentrationpayments are established by contractual provisions including predetermined payment schedules, which may or may not correspond to the timing of Credit Risk

Financial instruments that subjectthe transfer of control of the Company’s services under the contract. In general, the Company’s intention in its invoicing (payment terms) is to maintain cash neutrality over the life of the contract. Generally, the payment terms are 30 to 90 days based on contracts. Upfront payments, when they occur, are intended to cover certain expenses the Company to credit risk primarily consistincurs at the beginning of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently,the contract. Neither the Company believes thatnor its customers view such funds are subject to minimal credit risk. Investment policies have been implemented that limit purchasesupfront payments and contracted payment schedules as a means of marketable securities to investment grade securities. Substantially allfinancing. Unbilled services primarily arise from long-term contracts when a cost-based or hours-based input method of revenue recognition is utilized and revenues for Commercial Solutions, Research & Development Solutions and Integrated Engagement Services are earned by performing services under contracts with various pharmaceutical, biotechnology, medical device and healthcare companies. The concentration of credit risk is equalrecognized exceeds the amount billed to the outstanding accounts receivablecustomer.


Unearned income consists of advance payments and unbilledbillings in excess of revenues recognized. As the contracted services balances, lessare subsequently performed and the associated revenues are recognized, the unearned income related thereto, and such riskbalance is subject toreduced by the financial and industry conditionsamount of the Company’s clients. Therevenue recognized during the period. Unearned income is classified as a current liability on our consolidated balance sheets as the Company does not require collateral or other securitiesexpects to support client receivables. Credit losses have been immaterial and reasonably within management’s expectations. No client accounted for 10% or more of consolidatedrecognize the associated revenues in 2017, 2016 or 2015.

less than one year.


Restructuring Costs


Restructuring costs, which primarily include termination benefits, and facility closure costs, are recorded at estimated fair value. Key assumptions in determining the restructuring costs include the terms and payments that may be negotiated to terminate certain contractual obligations and the timing of employees leaving the Company.

83

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Merger Related Costs

Merger related costs include the direct and incremental costs associated with business combinations including (i) acquisition related costs such as investment banking, legal, accounting and consulting fees (see Footnote 15), (ii) incremental compensation costs triggered under change in control provisions in executive employment agreements, (iii) compensation and related costs of employees 100% dedicated to merger-related integration activities and (iv) severance and other termination costs associated with redundant employees. During 2016, the Company recognized $87 million of merger related costs, which includes $36 million of acquisition related costs. All of these costs are related to the Merger. Merger related costs for all other business combinations have been immaterial and are included within selling, general and administrative expenses on the consolidated statements of income.

Legal Costs

Legal costs are expensed as incurred.

Debt Fees


Fees incurred to issue debt are generally deferred and amortized as a component of interest expense over the estimated term of the related debt using the effective interest rate method.


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Contingencies


The Company records accruals for claims, suits, investigations and proceedings when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews claims, suits, investigations and proceedings at least quarterly and records or adjusts accruals related to such matters to reflect the impact and status of any settlements, rulings, advice of counsel or other information pertinent to a particular matter. Legal costs associated with contingencies are charged to expense as incurred.


The Company is party to legal proceedings incidental to its business. While the outcome of these matters could differ from management’s expectations, the Company does not believe the resolution of these matters will have a material adverse effect to the Company’s financial statements.

See Note 12 for additional information.


Income Taxes

Income tax expense


The provision for income taxes includes United States federal, state, local and internationalforeign taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income taxes. Certain items of income and expense are not reported in income tax returns and GAAP financial statements in the same year. The income tax effects of theseyear in which the temporary differences are reported as deferred income taxes. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. In light of the newly enacted Tax Cuts and Jobs Act (the “Tax Act”), the Company no longer considers the undistributed earnings of its foreign subsidiariesexpected to be indefinitely reinvested and records deferred income taxes on these earnings.recovered or settled. The Company has provisionally recorded theirrecords U.S. deferred taxes based on the Federal corporate income tax rate of 21%. We are continuingThe Company accounts for tax related to analyze aspects of the Tax Act and, therefore, have not finalized our accounting policy with respect to whether to (1) recognize deferred taxes for basis differences expected to reverse as Global Low Taxed Intangible Low-Taxed Income (“GILTI”) or (2) account for GILTI as a period costs if andcost when incurred. We have not recognized anyRecognition of deferred tax impacts related to GILTI or the Base Erosion Anti Abuse Tax (“BEAT”) on a provisional basis. Interest and penalties related to unrecognized income tax benefits are recognized as a component ofassets is based on management’s belief that it is more likely than not that the income tax benefit associated with certain temporary differences, income tax operating loss, capital loss carryforwards, and income tax credits, will be realized. The Company records a valuation allowance to reduce its deferred income tax assets for those deferred income tax items for which it was more likely than not that realization would not occur. The Company determines the amount of the valuation allowance based, in part, on the Company’s assessment of future taxable income and in light of the Company’s ongoing income tax strategies. If the estimate of future taxable income or tax strategies changes at any time in the future, the Company would record an adjustment to its valuation allowance. Recording such an adjustment could have a material effect on the Company’s financial condition or results of operations.

Income tax expense is based on the distribution of profit before income tax among the various taxing jurisdictions in which the Company operates, adjusted as discussed furtherrequired by the income tax laws of each taxing jurisdiction. Changes in Note 18.

the distribution of profits and losses among taxing jurisdictions may have a significant impact on the Company's effective income tax rate. The Company does not consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States.


Pensions and Other Postretirement Benefits


The Company provides retirement benefits to certain employees, including defined benefit pension plans and postretirement medical plans. The determination of benefit obligations and expense is based on actuarial models. In order to measure benefit costs and obligations using these models, critical assumptions are made with regard to the discount rate, expected return on plan assets, cash balance crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost trend rates are a key assumption used exclusively in determining costs for the Company’s postretirement health care and life insurance benefit plans. Management reviews these critical assumptions at least annually. Other assumptions involve demographic factors such as turnover, retirement and mortality rates. Management reviews these assumptions periodically and updates them when their experience deems it appropriate to do so.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The discount rate is the rate at which the benefit obligations could be effectively settled and is determined annually by management. For United States plans, the discount rate is based on results of a modeling process in which the plans’ expected cash flow (determined on a projected benefit obligation basis) is matched with spot rates developed from a yield curve comprised of high-grade (Moody’s Aa and above, or Standard and Poor’s AA and above) non-callable corporate bonds to develop the present value of the expected cash flow, and then determining the single rate (discount rate), which when applied to the expected cash flow derives that same present value. In the United Kingdom specifically, the discount rate is set based on the yields on a universe of high quality non-callable corporate bonds denominated in the British Pound, appropriate to the duration of plan liabilities. For the non-United States plans, the discount rate is based on the current yield of an index of high quality corporate bonds.

The Company estimates the service and interest cost components of net periodic benefit cost for the Company’s United States and United Kingdom pension benefit plans by utilizing a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to each of the underlying projected cash flows based on time until payment.

Under the United States qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly. At retirement, the account is converted to a monthly retirement benefit.

In selecting an expected return on plan asset assumption, the Company considers the returns being earned by each plan investment category in the fund, the rates of return expected to be available for reinvestment and long-term economic forecasts for the type of investments held by the plan. The actual return on plan assets will vary from year to year versus this assumption. The Company believes it is appropriate to use long-term expected forecasts in selecting the expected return on plan assets. As such, there can be no assurance that the Company’s actual return on plan assets will approximate the long-term expected forecasts. While the Company believes that the assumptions used are reasonable, differences in actual experience or changes in assumptions may materially affect its pension and postretirement benefit obligations and future expense.

The Company’s estimated long-term rate of return on plan assets is based on the principles of capital market theory that maintain that over the long run, prudent investment risk taking is rewarded with incremental returns and that combining non-correlated assets can maximize risk adjusted portfolio returns. Long-term return estimates are developed by asset category based on actual class return data, historical relationships between asset classes and risk factors and peer plan data. Long-term return estimates for the Company’s United Kingdom pension plans are developed by asset category based on actual class return data, historical relationships between asset classes and risk factors.

The Company utilizes a corridor approach to amortizing unrecognized gains and losses in the pension and postretirement benefit plans. Amortization occurs when the accumulated unrecognized net gain or loss balance exceeds the criterion of 10% of the larger of the beginning balances of the projected benefit obligation or the market-related value of the plan assets. The excess unrecognized gain or loss balance is then amortized using the straight-line method over the average remaining service life of active employees expected to receive benefits.

Stock-based Compensation


The Company accounts for stock-based compensation for stock options and stock appreciation rights under the fair value method and uses the Black-Scholes-Merton model to estimate the value of such stock-based awards granted to its employees and non-executive directors. Expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility and believes the expected volatility will approximateon an analysis that incorporates the historical volatility of the peer group.Company's stock since the Merger in October 2016 and reported data for selected reasonably similar publicly traded companies for which the historical information is available. The Company does not currently anticipate paying dividends. The expected term represents the period of time the grants are expected to be outstanding. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant.


The Company accounts forvalues its stock-based compensation for restricted stock awards and restricted stock units based on the closing market price of the Company’s common stock on the date of grant. The Company accounts for its stock-based compensation for performance awards related to compound annual earnings per share (“EPS”) growth based on the closing market price of the Company’s common stock on the date of grant, and upon thefor performance awards related to relative total shareholder return (“TSR”) based on a Monte Carlo simulation model.model.

85

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes


Leases

The Company determines if an arrangement is a lease at inception and reassesses if there are changes in terms and conditions of the contract. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in deposits and other assets, net, other current liabilities, and other liabilities on the Company's consolidated balance sheets. Lease assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Lease assets also include any lease payments made before lease commencement and initial direct costs and excludes lease incentives. In determining the lease term at lease commencement, the Company includes the noncancellable term and the periods, which the Company deems it is reasonably certain to Consolidated Financial Statements - Continued  

exercise or not to exercise a renewal or cancellation option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Finance lease expense is recognized as a combination of depreciation expense for the leased asset and interest expense for the outstanding lease liabilities using the discount rate discussed above.


The Company has lease agreements with lease and non-lease components that the Company has elected to account for as single lease components.

Earnings Per Share


The calculation of earnings per share is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share. Potentially dilutive securities include outstanding stock options and unvested restricted stock units, restricted stock, and performance awards. Employee equity share options, restricted stock units, restricted stock, performance awards and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share.other stock-based awards. Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, and the amount of compensation cost for future service that the Company has not yet recognized and the amount of benefits that would be recorded in additional paid-in capital when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.


Investments in Unconsolidated Affiliates

The Company’s investments in unconsolidated affiliates are accounted for under the equity method if the Company exercises significant influence or has an investment in a limited partnership that is considered to be greater than minor. These investments are classified as investments in unconsolidated affiliates on the accompanying consolidated balance sheets. The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments in equity in (losses) earnings of unconsolidated affiliates on the accompanying consolidated statements of income. The Company reviews its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Treasury Stock


The Company records treasury stock purchases under the cost method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid inpaid-in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid inpaid-in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this differenceshortfall is recorded in retained earnings.


Recently Issued Accounting Standards


Accounting pronouncements recently adopted

In August 2016,September 2022, the United States Financial Accounting Standards Board (“FASB”("FASB") issued new accounting guidance, that eliminatesAccounting Standards Update ("ASU") 2022-04, Liabilities - Supplier Finance Programs, to enhance the diversitytransparency of supplier finance programs. The amendments in practice relatedthis ASU address investor and other financial statement user requests for additional information about the use of supplier finance programs by the buyer party to understand the cash flow classificationeffect of certain cash receiptsthose programs on a Company's working capital, liquidity, and payments including debt prepayment or extinguishment payments, payments upon maturity of a zero coupon bond, payment of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions received from certain equity method investees, and cash flows related to beneficial interests obtained in a financial asset securitization. The new guidance designates the appropriate cash flow statement classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities.  In the absence of specific guidance, each separately identifiable cash source and use will be classified on the basis of the nature of the underlying cash flows. The Company adopted this new accounting guidance retrospectively oneffective January 1, 2017.2023. The adoption of this new accounting guidance did not have a material effect on the Company’sCompany's disclosures within the consolidated financial statements.


82

Accounting pronouncements issued but not adopted as of December 31, 2023
In March 2016,November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements. The new accounting guidance requires disclosure of significant segment expenses that simplifies several aspects of the accounting for employee stock-based compensation transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and the classification of excess income tax benefits on the statement of cash flows. Under the new accounting guidance, excess income tax benefits related to stock-based awards are reflected as a reduction of income tax expense on the statements of income and as cashregularly provided from operating activities on the statements of cash flows. In the prior periods, these tax benefits were reflected directly in additional paid in capital and as cash provided from financing activities. The Company adopted this new accounting guidance prospectively on January 1, 2017. The adoption of this new accounting guidance did not impact the Company’s recognition of its stock-based compensation expense or its presentation of cash flows related to employee taxes paid for withheld shares.

Accounting pronouncements being evaluated

In August 2017, the FASB issued new accounting guidance that will allow more financial and nonfinancial hedging strategies to be eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scopechief operating decision maker and resultsincluded in the reported measure of hedging programs.segment profit or loss. It does not change the definition of a segment or the guidance for determining reportable segments. The new accounting guidance will be effective for the Company onin the annual period beginning January 1, 2019.2024 and in 2025 for interim periods. The Company is currently evaluatingassessing the impactimpacts of this new accounting guidanceASU on its disclosures within the consolidated financial statements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

In March 2017,December 2023, the FASB issued new accounting guidance that requiresASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the service cost componenttransparency and decision usefulness of net periodic benefit cost be presentedincome tax disclosures. The amendments in this ASU require additional disclosures about income taxes, primarily focused on the samedisclosure of income statement line item as other employee compensation costs,taxes paid and requires that the other components of net periodic benefit expense be recognized in the non-operating section of the income statement. In addition, only the service cost component of net periodic benefit expense is eligible for capitalization when applicable.  rate reconciliation table. The new standard requires retrospective application of the change in the income statement and prospective application for the capitalization of service cost in assets. The new standard permits previously disclosed components of net benefit costs as an estimation basis for applying the retrospective presentation as a practical expedient. The new accounting guidance will be effective for the Company onin the annual period beginning January 1, 2018. Utilizing the practical expedient based on amounts disclosed in Note 19, the Company will reclassify non-service components of net periodic benefit cost of $17 million and $3 million for 2017 and 2016, respectively, from selling, general and administrative expenses into other income, net.

In January 2017, the FASB issued new accounting guidance that changes the definition of a business to clarify when a set of assets does not constitute a business. Under the new definition, when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is generally not a business. The new accounting guidance will be effective for the Company on January 1, 2018. The adoption of this new accounting guidance may result in more acquisitions being accounted for as asset acquisitions.

In February 2016, the FASB issued new accounting guidance that requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. The income statement will reflect lease expense for operating leases, and amortization and interest expense for financing leases. The new accounting guidance will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted.2025. The Company is currently evaluatingassessing the impactimpacts of this new accounting guidanceASU on its disclosures within the consolidated financial statements.

In January 2016,


2. Revenues by Geography, Concentration of Credit Risk and Remaining Performance Obligations

The Company attributes revenues to geographical region based upon where the FASB issued new accounting guidance that modifies how entities measure equity investmentsservices are performed. The following tables represent revenues by geographical region and present changesreportable segment for the years ended December 31, 2023, 2022 and 2021:

December 31, 2023
(in millions)Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsTotal
Revenues:
Americas$3,091 $4,157 $304 $7,552 
Europe and Africa2,156 2,103 200 4,459 
Asia-Pacific615 2,135 223 2,973 
Total revenues$5,862 $8,395 $727 $14,984 

December 31, 2022
(in millions)Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsTotal
Revenues:
Americas$2,947 $3,747 $354 $7,048 
Europe and Africa2,175 2,016 175 4,366 
Asia-Pacific624 2,158 214 2,996 
Total revenues$5,746 $7,921 $743 $14,410 

December 31, 2021
(in millions)Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsTotal
Revenues:
Americas$2,610 $3,887 $351 $6,848 
Europe and Africa2,282 1,899 176 4,357 
Asia-Pacific642 1,770 257 2,669 
Total revenues$5,534 $7,556 $784 $13,874 

83

When attributing revenues to individual countries based upon where the services are performed, no individual country, except for the United States, accounted for 10% or more of total revenues for the years ended December 31, 2023 and 2022. For the year ended December 31, 2023, revenues in the fair valueUnited States accounted for approximately 45% of financial liabilities. The new accounting guidance will be effectivetotal revenues using this revenue attribution approach. For the year ended December 31, 2022, revenues in the United States accounted for annual reporting periods beginning afterapproximately 42% of total revenues using this revenue attribution approach. For the year ended December 15, 2017. Early adoption of31, 2021, revenues in the presentation guidance is permitted; however, early adoption of the recognition and measurement guidance is not permitted. The adoption of this new accounting guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In May 2014, the FASBUnited States and the International Accounting Standards Board issued a converged standard onUnited Kingdom accounted for approximately 42% and 11% of total revenues, respectively, using this revenue attribution approach.


No individual customer represented 10% or more of total revenues for the recognitionyears ended December 31, 2023, 2022 and 2021.

Transaction Price Allocated to the Remaining Performance Obligations

As of revenue from contracts with clients. The objectiveDecember 31, 2023, approximately $31.7 billion of the new standard is to establish a single comprehensive revenue recognition model that is designed to create greater comparability of financial statements across industries and jurisdictions. Under the new standard, companies will be required to recognize revenue to depict the transfer of goods or services to clients in amounts that reflect the consideration to which the company will be entitled in exchange for those goods or services. The Company has concluded that the majority of the clinical trial arrangements will represent a single performance obligation.  The Company will account for revenue for this single performance obligation over time using project cost as an input method to measure progress. The Company will be required to use significant judgment in calculating its estimated costs at completion for each contract, and will be required to update these estimates on an ongoing basis, which may result in fluctuations in revenue recognized in any given period. The Company’s arrangements in the Commercial Solutions and Integrated Engagement Services segmentsrevenues are generally multiple element arrangements under which current rules require the deferral of revenue when payment on a delivered unit of accounting is contingent on performing on a future unit of accounting.  Under the new standard these arrangements will consist of multiple performance obligations and such deferral of revenue will in some cases be lower (or zero) when management determines that it is probable that performance on the future performance obligation will occur. Service revenues and reimbursed expenses revenues will be treated consistently and presented as one line on the consolidated statements of income for all segments. The new standard will require expanded disclosures on revenue recognition, including information about changes in assets and liabilities that result from contracts with clients. The new standard will be effective for annual reporting periods beginning after December 15, 2017. The Company will adopt the new standard on January 1, 2018. The Company will use the full retrospective approach to transition upon adoption, which will require the Company to recast each prior reporting period presented.

The adoption of the new standard is expected to result in a revenue reduction of less than 1% in 2017 and the cumulative impact through 2017 is not expected to be materialrecognized in the future from remaining performance obligations. The Company expects to total stockholders’ equity. The revenue impactrecognize revenues on approximately 30% of these remaining performance obligations over the next twelve months, on approximately 85% over the next five years, with the balance recognized thereafter. Most of the new standard willCompany's remaining performance obligations where revenues are expected to be finalized upon adoptionrecognized beyond the next twelve months are for service contracts for clinical research in the first quarter of 2018 and is therefore subjectCompany's Research & Development Solutions segment. The customer contract transaction price allocated to change.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notesthe remaining performance obligations differs from backlog in that it does not include wholly unperformed contracts under which the customer has a unilateral right to Consolidated Financial Statements - Continued

2.cancel the arrangement.


3. Trade Accounts Receivable, and Unbilled Services

Accounts receivable and Unearned Income


Trade accounts receivables and unbilled services consist of the following (in millions):

following:

 

December 31,

 

 

2017

 

 

2016

 

Trade:

 

 

 

 

 

 

 

 

Billed

 

$

1,229

 

 

$

998

 

December 31,December 31,
(in millions)(in millions)20232022
Trade accounts receivable

Unbilled services

 

 

779

 

 

 

723

 

Trade accounts receivable and unbilled services

 

 

2,008

 

 

 

1,721

 

Allowance for doubtful accounts

 

 

(15

)

 

 

(14

)

Trade accounts receivable and unbilled services, net

 

$

1,993

 

 

$

1,707

 

3.


Unbilled services and unearned income were as follows:
December 31,
(in millions)20232022Change
Unbilled services$1,942 $1,624 $318 
Unearned income(1,799)(1,797)(2)
Net balance$143 $(173)$316 

Unbilled services, which is comprised of approximately 68% and 61% of unbilled receivables and 32% and 39% of contract assets as of December 31, 2023 and December 31, 2022, respectively, increased by $318 million as compared to December 31, 2022. Contract assets are unbilled services for which invoicing is based on the timing of certain milestones related to service contracts for clinical research whereas unbilled receivables are billable upon the passage of time. Unearned income increased by $2 million over the same period resulting in an increase of $316 million in the net balance of unbilled services and unearned income between December 31, 2023 and 2022. The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, primarily related to the Company’s Research & Development Solutions contracts (which is based on the percentage of costs incurred) versus the timing of invoicing, which is based on certain milestones.

The majority of the unearned income balance as of the beginning of the year was recognized in revenues during the year ended December 31, 2023.

Bad debt expense recognized on the Company’s receivables and unbilled services was immaterial for the years ended December 31, 2023, 2022 and 2021.

84

Accounts Receivable Factoring Arrangements

The Company has accounts receivable factoring agreements to sell certain eligible unsecured trade accounts receivable, either based on automatic arrangements or at its option, without recourse, to unrelated third-party financial institutions for cash. For the year ended December 31, 2023, through its accounts receivable factoring arrangements that the Company utilizes most frequently, the Company factored approximately $699 million of customer invoices on a non-recourse basis and received approximately $686 million in cash proceeds from the sales. For the year ended December 31, 2022, through these same accounts receivable factoring arrangements, the Company factored approximately $608 million of customer invoices on a non-recourse basis and received approximately $600 million in cash proceeds from the sales. The fees associated with these transactions were immaterial. The Company has other accounts receivable arrangements for which the activity associated with them is immaterial.

4. Investments –

Debt, Equity and Other Securities


Current


The Company’s short-term investments in debt, equity and other securities consist primarily of trading investments in mutual funds thatand are measured at fair value with realized and unrealized gains and losses recorded in other (income) expense, (income), net on the accompanying consolidated statements of income.


Long-term


The Company’s long-term debt and equity investments (except those accounted for under the equity method, those that result in debt, equityconsolidation of the investee and certain other securities consist primarily of cost method investments.

The Company reviews the carryinginvestments) are measured at fair value of each individual investment at each balance sheet date to determine whether or not an other-than-temporary declineand any changes in fair value has occurred. The Company employs alternative valuation techniques includingare recognized in net income at the following: (i)end of each reporting period. For debt and equity investments that do not have readily determinable fair values and do not qualify for the review of financial statements, including assessments of liquidity, (ii) the review of valuations availableexisting practical expedient in ASC 820, Fair Value Measurement, to the Company prepared by independent third parties used in raising capital, (iii) the review of publicly available information including press releases and (iv) direct communications with the investee’s management, as appropriate. If the review indicates that such a decline inestimate fair value has occurred,using the Company adjusts the carryingnet asset value to the estimated fair valueper share of the investment, the Company applies the measurement alternative and recognizes a lossmeasures those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the amountidentical or a similar investment of the adjustment.

4. Investments in and Advances to same issuer at each reporting period.


Unconsolidated Affiliates


The Company accounts for its investments in and advances to unconsolidated affiliates under the equity method of accounting and records its pro rata share of its losses or earnings from these investments in equity in (losses) earnings (losses) of unconsolidated affiliates. The following is a summary of the Company’s investments in and advances to unconsolidated affiliates (in millions):

affiliates:

 

 

December 31,

 

 

 

2017

 

 

2016

 

NovaQuest Pharma Opportunities Fund III, L.P.

 

$

33

 

 

$

43

 

NovaQuest Pharma Opportunities Fund IV, L.P.

 

 

7

 

 

 

6

 

CenduitTM

 

 

14

 

 

 

11

 

NostraData Pty Ltd.

 

 

8

 

 

 

8

 

Other

 

 

8

 

 

 

1

 

 

 

$

70

 

 

$

69

 

December 31,
(in millions)20232022
NovaQuest Pharma Opportunities Fund V, L.P. (“NQ Fund V”)$35 $29 
NostraData Pty Ltd. (“NostraData”)1818
NovaQuest Pharma Opportunities Fund IV, L.P. (“NQ Fund IV”)68
NovaQuest Private Equity Fund I, L.P. (“NQ PE Fund I”)108
Longwood Fund V, L.P. ("Longwood")7 6 
RxWare (formerly "Helparound")22
NovaQuest Pharma Opportunities Fund III, L.P. (“NQ Fund III”)11
Other55 22 
$134 $94 

NovaQuest Pharma Opportunities Funds

The Company has committed to invest up to $50 million as a limited partner in NovaQuest Pharma Opportunities Fund III, L.P. (“Fund III”).

85

Variable Interest Entities

As of December 31, 2017, the Company has funded approximately $43 million and has approximately $7 million of remaining funding commitments. As of December 31, 2017 and 2016, the Company had a 10.9% ownership interest in Fund III.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The Company has committed to invest up to $20 million as a limited partner in NovaQuest Pharma Opportunities Fund IV, L.P. (“Fund IV”). As of December 31, 2017, the Company has funded approximately $11 million and has approximately $9 million of remaining funding commitments. As of December 31, 2017 and 2016, the Company had a 2.3% ownership interest in Fund IV.

Cenduit™

In May 2007, the Company and Thermo Fisher Scientific Inc. (“Thermo Fisher”) completed the formation of a joint venture, Cenduit™. The Company contributed its Interactive Response Technology operations in India and the United States. Thermo Fisher contributed its Fisher Clinical Services Interactive Response Technology operations in three locations — the United Kingdom, the United States and Switzerland. Additionally, each company contributed $4 million in initial capital. The Company and Thermo Fisher each own 50% of Cenduit™. Cenduit provides project related services to the Company on an as needed basis.

NostraData Pty Ltd.

In November 2015, IMS Health made a 10.25 million AUD (approximately 9 million USD) investment in NostraData Pty Ltd. (“NostraData”) for a 24% equity interest. NostraData provides data to the Company on an as needed basis.

See Note 20 for information regarding related party transactions.

5. Variable Interest Entities

As of December 31, 2017,2023, the Company’s investments in unconsolidated variable interest entities (“VIEs”) and its estimated maximum exposure to loss were as follows (in millions):

follows:

 

 

Investments in

Unconsolidated

VIEs

 

 

Maximum

Exposure to

Loss

 

NovaQuest Pharma Opportunities Fund III, L.P.

 

$

33

 

 

$

40

 

NovaQuest Pharma Opportunities Fund IV, L.P.

 

 

7

 

 

 

16

 

Pappas Life Science Ventures V, L.P. (“Pappas Fund V”)

 

 

1

 

 

 

5

 

 

 

$

41

 

 

$

61

 

(in millions)Investments in Unconsolidated VIEsMaximum Exposure to Loss
NQ Fund V$35 $44 
Longwood7 10 
NQ PE Fund I10 11 
NQ Fund IV6 7 
NQ Fund III1 6 
Other48293
$107 $371 


5. Derivatives

Interest Rate Risk Management

The Company has determined that these funds are VIEs but thatentered into interest rate swaps for purposes of managing its exposure to interest rate fluctuations. The Company does not enter into interest rate swaps for investment or speculative purposes.

On July 19, 2018, the Company is notentered into forward starting interest rate swaps with a total notional value of $500 million in an effort to limit its exposure to changes in the primary beneficiary as it does not havevariable interest rate on its Senior Secured Credit Facilities (see Note 10 for additional information). Interest on the swaps began accruing on June 28, 2019 and the swaps expire on June 28, 2024. The Company pays an average fixed rate of 2.75% and receives a controlling financialvariable rate of interest inequal to the three-month Term SOFR on these funds. However, becauseswaps.

On March 27, 2020, the Company hasentered into an interest rate swap with a notional value of $1,000 million in an effort to limit its exposure to changes in the ability to exercise significant influence, it accountsvariable interest rate on its Senior Secured Credit Facilities (see Note 10 for its investments in these funds under the equity method of accounting and records its pro rata share of earnings and losses in equity in earnings (losses) of unconsolidated affiliatesadditional information). Interest on the accompanyingswap began accruing on March 31, 2020 and the swap expired on March 31, 2023. The Company paid a fixed rate of 0.56% and received a variable rate of interest equal to the one-month LIBOR on the swap.

On June 4, 2020, the Company entered into an interest rate swap with a notional value of $300 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (see Note 10 for additional information). Interest on the swap began accruing on June 30, 2020 and the swap expires on June 28, 2024. The Company pays a fixed rate of 0.32% and receives a variable rate of interest equal to the three-month Term SOFR on the swap.

On January 3, 2023, the Company entered into interest rate swaps with a combined notional value of $1,000 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (see Note 10 for additional information). Interest on the swaps began accruing on December 30, 2022 and the swaps expire on December 31, 2025. The Company pays a fixed rate of 4.10% and receives a variable rate of interest equal to one-month Term SOFR on the swaps.

On November 17, 2023, the Company entered into interest rate swaps with a combined notional value of $1,500 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (see Note 10 for additional information). Interest on the swaps began accruing on November 28, 2023 and the swaps expire on January 2, 2031. The Company pays a fixed rate of 6.11% and receives a variable rate of interest equal to three-month Term SOFR plus 2.00% on the swaps.

The critical terms of the interest rate swaps noted above are substantially the same as the underlying borrowings. These interest rate swaps are accounted for as cash flow hedges as these transactions were executed to hedge the Company's interest payments and for accounting purposes are considered highly effective. As such, changes in the fair value of the interest rate swaps are recorded as unrealized gains (losses) on derivatives included in AOCI.

86

The fair value of these interest rate swaps represents the present value of the anticipated net payments the Company will make to the counterparty, which, when they occur, are reflected as interest expense on the consolidated statements of income. The investment assetsThese interest rate swaps result in a total debt mix of unconsolidated VIEs are included in investments inapproximately 84% fixed rate debt and advances to unconsolidated affiliates on the accompanying consolidated balance sheets.

6. Derivatives

16% variable rate debt.


Foreign Exchange Risk Management


The Company transacts business in more than 100 countries and is subject to risks associated with fluctuating foreign exchange rates. The Company’s objective is to reduce earnings and cash flow volatility associated with foreign exchange rate movements. Accordingly, the Company enters into foreign currency forward contracts to (i) hedge certain forecasted foreign exchange cash flows arising from service contracts (“Service Contract Hedging”) and (ii) hedge non-United States dollar anticipated intercompany royalties (“Royalty Hedging”). It is the Company’s policy to enter into foreign currency transactionsforward contracts only to the extent necessary to meet its objectives as stated above.reduce earnings and cash flow volatility associated with foreign exchange rate movements. The Company does not enter into foreign currency transactionsforward contracts for investment or speculative purposes. The principal currenciescurrency hedged are the Euro,in 2023 was the British Pound, the Japanese Yen, the Swiss Franc and the Canadian dollar. Pound.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Service Contract Hedging and Royalty Hedging contracts are designated as cash flow hedges and are carried at fair value, with changes in the fair value recorded to AOCI. The change in fair value is reclassified from AOCI to earnings in the period in which the hedged transaction occurs. These contracts have various expiration dates through November 2018.

September 2024.


As of December 31, 2017,2023 and 2022, the Company had 57 open Service Contract Hedging and Royalty Hedging contracts to hedge certain forecasted foreign currency cash flow transactions occurring in 20182024 and 2023 with notional amounts totaling $282 million. As of December 31, 2016, the Company had 62 open Service Contract Hedging$121 million and Royalty Hedging contracts to hedge certain forecasted foreign currency cash flow transactions occurring in 2017.$122 million, respectively. For accounting purposes these hedges are deemed to beconsidered highly effective. As of December 31, 20172023 and 2016,2022, the Company had recorded gross unrealized gains (losses) of $5$2 million and ($4)$— million, and $11$2 million and ($9)$(2) million,, respectively, related to these contracts. Upon expiration of the hedge instruments in 2018,2023, the Company will reclassifyreclassified the unrealized holding gains and losses on the derivative instruments included in AOCI into earnings. The unrealized gains (losses) are included in other current assets and other current liabilities on the accompanying consolidated balance sheets as of December 31, 20172023 and 2016.

Interest Rate2022.


Net Investment Risk Management,

The Company purchases interest rate caps and has entered into interest rate swap agreements for purposes Euro Denominated Notes


As of managing its risk in interest rate fluctuations.

On June 9, 2011, the Company entered into six interest rate swaps that expired between September 30, 2013 and March 31, 2016, in an effort to limit its exposure to changes in the variable interest rate on its senior secured credit facilities. During May 2015, in conjunction with the debt refinancing described in Note 11, the Company terminated the remaining open interest rate swaps for a cash payment to the counterparty of $12 million, which includes $1 million of accrued interest. Since the hedged forecasted cash transactions continued to be probable of occurring, the accumulated loss ($3 million at December 31, 2015) related to2023, the terminated interest rate swaps in AOCI was reclassified to earnings as a component of interest expense in the same periods as the hedged forecasted transactions occurred over the first three months of 2016.

In April 2014, IMS Health purchased United States dollar denominated interest rate caps (“2014 Caps”) with a total notional value of $1 billion at strike rates ranging between 2% and 3%. These caps were effective at various times between April 2014 and April 2016, and expire at various times between April 2017 and April 2019. The total premiums were $21 million, which were paid in 2014. The 2014 Caps are designated as cash flow hedges.

IMS Health also entered into United States dollar and Euro denominated interest rate swap agreements in April 2014 (“2014 Swaps”) to hedge interest rate exposure on notional amounts of approximately $600 million of its borrowings. The 2014 Swaps were effective between April and June 2014, and expire at various times from March 2017 through March 2021. On these agreements, the Company pays a fixed rate ranging from 1.4% to 2.1% and receives a variable rate of interest equal to the greater of three-month United States dollar London Interbank Offered Rate (“LIBOR”) or three-month Euro Interbank Offered Rate (“EURIBOR”), and 1%. The 2014 Swaps are designated as cash flow hedges.

On June 3, 2015, the Company entered into seven forward starting interest rate swaps (“2015 Swaps”) in an effort to limit its exposure to changes in the variable interest rate on its senior secured credit facilities. Interest on the swaps began accruing on June 30, 2016 and the interest rate swaps currently outstanding expire between March 31, 2018 and March 31, 2020. The Company pays a fixed rate ranging from 1.6% to 2.1% and receives a variable rate of interest equal to the three-month LIBOR on these agreements.

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IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The critical terms of the 2015 Swaps are substantially the same as the underlying borrowings. These interest rate swaps are being accounted for as cash flow hedges as these transactions were executed to hedge the Company’s interest payments and for accounting purposes these hedges are highly effective. As such, the effective portion of the hedges is recorded as unrealized gains (losses) on derivatives included in AOCI and the ineffective portion of the hedges is recognized in earnings. The 2014 EUR Swap (notional value $347 million) ceased to be considered a highly effective hedge for accounting purposes when the underlying debt was refinanced on March 7, 2017. As such, the Company discontinued hedge accounting on that date and prospective changes in the fair value of the 2014 EUR Swap are recognized in earnings. The 2014 USD Swap (notional value $100 million) ceased to be considered a highly effective hedge for accounting purposes during the third quarter of 2017 and as such, the Company has discontinued hedge accounting and prospective changes in the fair value of the 2014 USD Swap are recognized in earnings.  The fair value of these interest rate swaps represents the present value of the anticipated net payments the Company will make to the counterparty, which, when they occur, are reflected as interest expense on the consolidated statements of income. These interest rate swaps will result in a total debt mix of approximately 55% fixed rate debt and 45% variable rate debt, before the additional protection arising from the interest rate caps.

Net Investment Risk Management

Beginning in 2016, the Company designated itsCompany's foreign currency denominated debt balance that was designated as a hedge of its net investment in certain foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the United States dollar. As of December 31, 2017, these borrowings (net of original issue discount) were €4,036totaled approximately €2,449 million ($4,8352,703 million). The effective portionamount of foreign exchange (losses) gains or losses on the remeasurement of the debt is recognizedrelated to this net investment hedge included in the cumulative translation adjustment component of AOCI was $(102) million, $332 million, and $475 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Net Investment Risk Management, Cross-Currency Swaps
On November 15, 2023, in connection with the related offsetissuance of the 2029 Senior Secured Notes (see Note 10 for additional information), the Company entered into cross-currency swaps with a combined notional value of $1,250 million to effectively convert $1,250 million of the 2029 Senior Secured Notes into euro-denominated borrowings at prevailing euro interest rates through February 2029. The Company designated these agreements as a hedge of its net investment in long-term debt. Those amounts would be reclassifiedcertain foreign subsidiaries. These cross-currency swaps expire in February 2029. The Company will receive semiannual interest payments on February 1 and August 1 from AOCI to earnings upon the sale or substantial liquidationcounterparties based on a fixed interest rate until maturity of these agreements. The effective net investments.borrowing rate to the Company is approximately 4.8555%, inclusive of the yield on the notes and the beneficial impact of the cross-currency swaps.
On November 17, 2023, in connection with the allocation of the Term B-4 Dollar Loans (see Note 10 for additional information), the Company entered into cross-currency swaps with a combined notional value of $1,500 million to effectively convert $1,500 million of the Term B-4 Dollar Loans into euro-denominated borrowings at prevailing euro interest rates through January 2031. These cross-currency swaps expire in January 2031. The amountCompany will receive quarterly interest payments from the counterparties based on a fixed interest rate until maturity of foreign exchange lossesthese agreements. The effective net borrowing rate to the Company is approximately 4.9015%, inclusive of the yield on the loans, the beneficial impact of the cross-currency swaps and of the interest rate swaps entered on November 17, 2023 as noted above.
The Company does not enter into cross-currency swaps for investment or speculative purposes. For the year ended December 31, 2023, the Company recorded a loss of $108 million within AOCI as a result of these cross-currency swaps. The Company recognized approximately $3 million related to the net investment hedge included in cumulative translation adjustmentexcluded component as a reduction of interest expense for the year ended December 31, 2017 was $557 million.

2023.


87

The fair values of the Company’s derivative instruments, on a gross basis, and the line items on the accompanying consolidated balance sheets to which they were recorded are summarized in the following table (in millions):

table:

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

Balance Sheet

Classification

 

Assets

 

 

Liabilities

 

 

Notional

 

 

Assets

 

 

Liabilities

 

 

Notional

 

December 31, 2023December 31, 2023December 31, 2022
(in millions)(in millions)Balance Sheet ClassificationAssetsLiabilitiesNotionalAssetsLiabilitiesNotional

Derivatives designated as hedging

instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange forward contracts

 

Other current assets

and liabilities

 

$

5

 

 

$

4

 

 

$

282

 

 

$

11

 

 

$

9

 

 

$

300

 

Interest rate swaps

 

Other current

liabilities

 

 

—

 

 

 

1

 

 

 

405

 

 

 

—

 

 

 

15

 

 

 

945

 

Interest rate caps

 

Deposits and other

assets

 

 

1

 

 

 

—

 

 

 

700

 

 

 

1

 

 

 

—

 

 

 

1,000

 

Derivatives not designated as hedging

instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

Other current

liabilities

 

 

—

 

 

8

 

 

447

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest rate swaps
Cross-currency swaps

Foreign exchange forward contracts

 

Other current

liabilities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total derivatives

 

 

 

$

6

 

 

$

13

 

 

 

 

 

 

$

12

 

 

$

25

 

 

 

 

 

Total derivatives
Total derivatives


The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive income (loss) is summarized in the following table (in millions):

table:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021
Interest rate swaps

Foreign exchange forward contracts

 

$

(5

)

 

$

16

 

 

$

(1

)

Interest rate derivatives

 

 

9

 

 

 

8

 

 

 

6

 

Total

 

$

4

 

 

$

24

 

 

$

5

 

91

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The Company expects $1$48 million of pre-tax unrealized lossesgains related to its foreign exchange contracts and interest rate derivatives included in AOCI atas of December 31, 20172023 to be reclassified into earnings within the next twelve months.

7. The total amount, net of income taxes, of the cash flow hedge effect on the accompanying consolidated statements of income was $51 million, $(10) million, and $(12) million for the years ended December 31, 2023, 2022 and 2021, respectively.



6. Fair Value Measurements


The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:


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


•    Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.


•    Level 3—Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.


The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values atas of December 31, 20172023 and 20162022 due to their short-term nature. AtAs of December 31, 20172023 and 2016,2022, the fair value of total debt approximated $10,432was $13,597 million and $7,298$12,281 million, respectively, as determined under Level 2 measurements based on quoted prices for these financial instruments.


88

Recurring Fair Value Measurements


The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2017 (in millions):

2023:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities

 

$

46

 

 

$

—

 

 

$

—

 

 

$

46

 

Derivatives

 

 

—

 

 

 

6

 

 

 

—

 

 

 

6

 

Total

 

$

46

 

 

$

6

 

 

$

—

 

 

$

52

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$

—

 

 

$

13

 

 

$

—

 

 

$

13

 

Contingent consideration

 

 

—

 

 

 

—

 

 

 

69

 

 

 

69

 

Total

 

$

—

 

 

$

13

 

 

$

69

 

 

$

82

 


(in millions)Level 1Level 2Level 3Total
Assets:
Marketable securities$146 $— $— $146 
Derivatives— 15 — 15 
Total$146 $15 $— $161 
Liabilities:
Derivatives$— $159 $— $159 
Contingent consideration— — 106 106 
Total$— $159 $106 $265 

The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2016 (in millions):

2022:

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities

 

$

40

 

 

$

—

 

 

$

—

 

 

$

40

 

Derivatives

 

 

—

 

 

 

12

 

 

 

—

 

 

 

12

 

Total

 

$

40

 

 

$

12

 

 

$

—

 

 

$

52

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$

—

 

 

$

25

 

 

$

—

 

 

$

25

 

Contingent consideration

 

 

—

 

 

 

—

 

 

 

18

 

 

 

18

 

Total

 

$

—

 

 

$

25

 

 

$

18

 

 

$

43

 


(in millions)Level 1Level 2Level 3Total
Assets:
Marketable securities$122 $— $— $122 
Derivatives— 44 — 44 
Total$122 $44 $— $166 
Liabilities:
Derivatives$— $2 $— $2 
Contingent consideration— — 173 173 
Total$— $2 $173 $175 

92

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Below is a summary of the valuation techniques used in determining fair value:


Marketable securities—The Company values trading and available-for-sale securities using the quoted market value of the securities held.


Derivatives—Derivatives consist of foreign exchange contracts, and interest rate capsswaps, and cross-currency swaps. The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates or using other observable inputs. The fair value of the interest rate caps and swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask spread.

The fair value of the cross-currency swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account the effective interest rates, foreign exchange rates and the remaining time to maturities.


Contingent consideration—The Company values contingent consideration related to business combinations using a weighted probability calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows. Key assumptionsAssumptions used to estimate the fair value of contingent consideration include revenue, net new businessvarious financial metrics (revenues performance targets and operating forecastsforecasts) and the probability of achieving the specific targets.

Based on the assessments of the probability of achieving specific targets, as of December 31, 2023 the Company has accrued approximately 40% of the maximum contingent consideration payments that could potentially become payable.


89

The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the year ended December 31 (in millions):

31:

 

Contingent Consideration – Accrued Expenses

 

 

2017

 

 

2016

 

 

2015

 

Contingent ConsiderationContingent Consideration
(in millions)(in millions)202320222021

Balance as of January 1

 

$

18

 

 

$

4

 

 

$

1

 

Business combinations

 

 

57

 

 

 

19

 

 

 

—

 

Contingent consideration paid

 

 

(4

)

 

 

(4

)

 

 

(3

)

Revaluations included in earnings and foreign currency translation

adjustments

 

 

(2

)

 

 

(1

)

 

 

6

 

Balance as of December 31

 

$

69

 

 

$

18

 

 

$

4

 


The revaluation for thecurrent portion of contingent consideration is included within accrued expenses and the long-term portion is included within other liabilities on the accompanying consolidated balance sheets. Revaluations of contingent consideration are recognized in other (income) expense, (income), net on the accompanying consolidated statements of income.

A change in significant unobservable inputs could result in a higher or lower fair value measurement of contingent consideration.


Non-recurring Fair Value Measurements


Certain assets are carried on the accompanying consolidated balance sheets at cost and are not remeasured to fair value on a recurring basis. These assets include cost and equity method investments and loans that are written down to fair value for declines that are deemed to be other-than-temporary, and goodwill and identifiable intangible assets that are tested for impairment annually and when a triggering event occurs. See Note 17 for additional information.

As of December 31, 2017,2023, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaled approximately $18,519$19,619 million and were identified as Level 3. These assets are comprised of debt investments and cost and equity method investments of $78$213 million, goodwill of $11,850$14,567 million and other identifiable intangibles, net of $6,591$4,839 million.


Cost and Equity Method Investments and Debt Investments—The inputs available for valuing investments in non-public portfolio companies are generally not easily observable. The valuation of non-public investments requires significant judgment by the Company due to the absence of quoted market values, inherent lack of liquidity and the long-term nature of such assets. When a triggering event occurs, the Company considers a wide range of available market data when assessing the estimated fair value. Such market data includes observations of the trading multiples of public companies considered comparable to the private companies being valued as well as publicly disclosed merger transactions involving comparable private companies. In addition, valuations are adjusted to account for company-specific issues, the lack of liquidity inherent in a non-public investment, and the fact that comparable public companies are not identical to the companies being valued. Such valuation adjustments are necessary because in the absence of a committed buyer and completion of due diligence similar to that performed in an actual negotiated sale process, there may be company-specific issues that are not fully known that may affect value. Further, a variety of additional factors are reviewed by the Company, including, but not limited to, financing and sales transactions with third parties, current operating performance and future expectations of the particular investment, changes in market outlook, and the third-party financing environment. Because of the inherent uncertainty of valuations, estimated valuations may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.

93

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


Goodwill—Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets resulting from business combinations. The recoverability of goodwill is evaluated annually for impairment, or if and when events or circumstances indicate a possible impairment. For the year ended December 31, 2023, the Company performselected to perform a qualitative analysis to determine whether it is more likely than not thatquantitative impairment assessment for each of the estimatedCompany's reporting units. As part of the quantitative impairment assessment, the Company compared the fair value of aeach reporting unit is less thanto its bookcarrying value. This includes a qualitative analysisThe quantitative test requires significant judgments, estimates, and assumptions. The Company estimated the fair value of macroeconomic conditions, industryeach reporting by weighting results of the income and market considerations, internal cost factors, financial performance, fair value historyapproaches, with greater weight given to the income approach. Significant estimates used in the income approach include estimates of future revenues, EBITDA, cash flows, long-term growth rates, tax rates, and other company specific events. If this qualitative analysis indicates that it is more likely than not thatdiscount rates. The selected discount rates consider the estimated fair value is less than the book value forrisk and nature of the respective reporting unit,unit’s cash flows, and the rates of return a market participant would expect to earn by investing in the Company's reporting units. The market approach uses information about the Company applies a two-step impairment test in which the Company determines whether the estimated fair value of the reporting unit is in excess of its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the estimated fair value of the reporting unit, the Company performs the second step of the impairment test to determine the implied estimated fair value of the reporting unit’s goodwill. The Company determines the implied estimated fair value of goodwill by determining the present value of the estimated future cash flows for each reporting unit and comparing the reporting unit’s risk profile and growth prospects to selected, reasonably similaras well as other publicly traded companies.guideline companies, including revenue and EBITDA-related multiples and estimates of control premiums. See Note 178 for additional information.

Definite-lived Intangible Assets


Other Identifiable Intangibles, Net—If a triggering event occurs, the Company determines the estimated fair value of definite-lived intangible assets by determining the present value of the expected cash flows. See Note 178 for additional information.

Indefinite-lived Intangible Asset—If a qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name. If the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess.

8.


90

7. Property and Equipment


The major classes of property and equipment were as follows (in millions):

follows:

 

December 31,

 

 

2017

 

 

2016

 

December 31,December 31,
(in millions)(in millions)20232022

Land, buildings and leasehold improvements

 

$

324

 

 

$

333

 

Equipment

 

 

446

 

 

 

338

 

Transportation equipment

Furniture and fixtures

 

 

81

 

 

 

72

 

Transportation equipment

 

 

72

 

 

 

26

 

Property and equipment, gross

 

 

923

 

 

 

769

 

Less accumulated depreciation

 

 

(483

)

 

 

(363

)

Property and equipment, net

 

$

440

 

 

$

406

 


Property and equipment depreciation expense was as follows (in millions):

follows:

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Depreciation expense

 

$

125

 

 

$

79

 

 

$

61

 

Year Ended December 31,
(in millions)202320222021
Depreciation expense$151 $160 $147 


94

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

9.

8. Goodwill and Other Identifiable Intangible Assets


As of December 31, 2017,2023, the Company has approximately $6,591$4,839 million of other identifiable intangible assets, of which approximately $18 million, relating to a trade name, is deemed to be indefinite-lived and, accordingly, is not being amortized.assets. Amortization expense associated with other identifiable definite-lived intangible assets was as follows (in millions):

follows:

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Amortization expense

 

$

886

 

 

$

210

 

 

$

67

 

Year Ended December 31,
(in millions)202320222021
Amortization expense$974 $970 $1,117 


Estimated amortization expense for existing other identifiable intangible assets is expected to be approximately $983$911 million, $988$803 million, $917$665 million, $765$519 million and $407$201 million for the years ending December 31, 2018, 2019, 2020, 20212024, 2025, 2026, 2027 and 2022,2028, respectively. Estimated amortization expense can be affected by various factors includingsuch as future acquisitions, or divestitures, of service and/or licensing and distribution rightsabandonments or impairments.


The following is a summary of other identifiable intangible assets (in millions):

assets:
December 31, 2023December 31, 2023December 31, 2022
(in millions)
(in millions)
(in millions)Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Definite-lived identifiable intangible assets:
Client relationships and backlog
Client relationships and backlog
Client relationships and backlog
Software and related assets
Trademarks, trade names and other
Databases
Non-compete agreements
$

 

As of December 31, 2017

 

 

As of December 31, 2016

 

 

Gross

Amount

 

 

Accumulated

Amortization

 

 

Net

Amount

 

 

Gross

Amount

 

 

Accumulated

Amortization

 

 

Net

Amount

 

Definite-lived identifiable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Client relationships and backlog

 

$

4,604

 

 

$

(474

)

 

$

4,130

 

 

$

3,983

 

 

$

(125

)

 

$

3,858

 

Trademarks, trade names and other

 

 

528

 

 

 

(59

)

 

 

469

 

 

 

384

 

 

 

(15

)

 

 

369

 

Databases

 

 

1,876

 

 

 

(468

)

 

 

1,408

 

 

 

1,742

 

 

 

(87

)

 

 

1,655

 

Software and related assets

 

 

927

 

 

 

(382

)

 

 

545

 

 

 

619

 

 

 

(247

)

 

 

372

 

Non-compete agreements

 

 

24

 

 

 

(3

)

 

 

21

 

 

 

9

 

 

 

—

 

 

 

9

 

 

$

7,959

 

 

$

(1,386

)

 

$

6,573

 

 

$

6,737

 

 

$

(474

)

 

$

6,263

 

Indefinite-lived identifiable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names(1)

 

$

18

 

 

$

—

 

 

$

18

 

 

$

127

 

 

$

—

 

 

$

127

 

(1)   In 2017, in conjunction with the Company’s name change from QuintilesIMS to IQVIA, the classification of the Quintiles trade name changed from an indefinite-lived intangible asset to a definite-lived intangible asset.


91

The following is a summary of goodwill by reportable segment for the years ended December 31, 20172023 and 2016 (in millions):

2022:

 

 

Commercial

Solutions

 

 

Research &

Development

Solutions

 

 

Integrated

Engagement

Services

 

 

Consolidated

 

Balance as of December 31, 2015

 

$

70

 

 

$

602

 

 

$

48

 

 

$

720

 

Business combinations

 

 

9,698

 

 

 

611

 

 

 

67

 

 

 

10,376

 

Impairment

 

 

(23

)

 

 

—

 

 

 

—

 

 

 

(23

)

Impact of foreign currency fluctuations and other

 

 

(330

)

 

 

(17

)

 

 

1

 

 

 

(346

)

Balance as of December 31, 2016

 

 

9,415

 

 

 

1,196

 

 

 

116

 

 

 

10,727

 

Business combinations

 

 

403

 

 

 

178

 

 

 

—

 

 

 

581

 

Impairment

 

 

(40

)

 

 

—

 

 

 

—

 

 

 

(40

)

Impact of foreign currency fluctuations and other

 

 

570

 

 

 

11

 

 

 

1

 

 

 

582

 

Balance as of December 31, 2017

 

$

10,348

 

 

$

1,385

 

 

$

117

 

 

$

11,850

 


(in millions)		Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsConsolidated
Balance as of December 31, 2021$11,337 $1,802 $162 $13,301 
Business combinations554 472 — 1,026 
Impact of foreign currency fluctuations and other(371)(27)(8)(406)
Balance as of December 31, 202211,520 2,247 154 13,921 
Business combinations352 181 — 533 
Impact of foreign currency fluctuations and other104 11 (2)113 
Balance as of December 31, 2023$11,976 $2,439 $152 $14,567 


95

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

During the second quarter of 2017, the Company determined there was sufficient indication that the carrying value of Encore Health Resources LLC (“Encore”) should be reviewed for further impairment due to its continued decline in performance.  The Company performed an impairment assessment that resulted in the recognition of a goodwill impairment of $39.6 million, which represented the remaining amount of goodwill associated with Encore, and an intangible asset impairment of $0.4 million for declines in fair value.  On July 12, 2017, the Company completed the sale of Encore to an unrelated third party. As of December 31, 2017, accumulated

There were no goodwill impairment losses were $63 million, solely related to Encore.

Duringfor the yearyears ended December 31, 2016,2023, 2022 and 2021.


9. Accrued Expenses

Accrued expenses consist of the Company recorded impairment losses of $28 million. See Note 17 for additional information.

following:

December 31,
(in millions)20232022
Client contract related$1,315 $1,065 
Compensation, including bonuses, fringe benefits and payroll taxes968 980 
Professional fees112 99 
Contingent consideration and deferred purchase price27 90 
Interest66 43 
Restructuring36 26 
Other331 368 
$2,855 $2,671 

10. Accrued Expenses

 

 

December 31,

 

(in millions)

 

2017

 

 

2016

 

Compensation, including bonuses, fringe benefits and payroll taxes

 

$

656

 

 

$

610

 

Restructuring

 

 

84

 

 

 

102

 

Interest

 

 

45

 

 

 

42

 

Client contract related

 

 

565

 

 

 

502

 

Professional fees

 

 

76

 

 

 

69

 

Contingent consideration and deferred purchase price

 

 

59

 

 

 

22

 

Other

 

 

179

 

 

 

146

 

 

 

$

1,664

 

 

$

1,493

 

11. Credit Arrangements


The following is a summary of the Company’s revolving credit facilities atas of December 31, 2017:

2023:

Facility

Interest Rates

$1,0002,000 million (revolving credit facility)

LIBOR in the relevant currency borrowedU.S. Dollar Term SOFR plus a margin (margin of

   2.00% at 1.25% plus a 10 basis credit spread adjustment as of December 31, 2017)

2023

$25110 million (receivables financing facility)

LIBOR Market Index Rate (1.56% atU.S. Dollar Term SOFR plus a margin of 0.90% plus a 11 basis credit spread adjustment as of December 31, 2017) plus 0.90%

2023

£10 million (approximately $13 million) general

   banking facility with a European headquartered

   bank

Bank’s base rate (0.50% at December 31, 2017) plus 1%

96


92

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The following table summarizes the Company’s debt at the dates indicated (dollars in millions):

indicated:

 

 

December 31,

 

 

 

2017

 

 

2016

 

Senior Secured Credit Facilities:

 

 

 

 

 

 

 

 

Term A Loan due 2021—U.S. Dollar LIBOR at average floating rates of 3.69%

 

$

844

 

 

$

888

 

Term A Loan due 2021—Euro LIBOR at average floating rates of 2.00%

 

 

453

 

 

 

419

 

Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 3.69%

 

 

748

 

 

 

—

 

Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 3.69%

 

 

1,188

 

 

 

—

 

Term B Loan due 2024—Euro LIBOR at average floating rates of 2.75%

 

 

1,423

 

 

 

—

 

Term B Loan due 2021—U.S. Dollar LIBOR at average floating rates of 3.50%

 

 

—

 

 

 

1,700

 

Term B Loan due 2021—Euro LIBOR at average floating rates of 3.75%

 

 

—

 

 

 

765

 

Revolving Credit Facility due 2021:

 

 

 

 

 

 

 

 

U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average floating

   rates of 3.47%

 

 

529

 

 

 

375

 

5.0% Senior Notes due 2026—U.S. Dollar denominated

 

 

1,050

 

 

 

1,050

 

2.875% Senior Notes due 2025—Euro denominated

 

 

503

 

 

 

—

 

3.25% Senior Notes due 2025—Euro denominated

 

 

1,707

 

 

 

—

 

3.5% Senior Notes due 2024—Euro denominated

 

 

749

 

 

 

658

 

4.125% Senior Notes due 2023—Euro denominated

 

 

—

 

 

 

289

 

4.875% Senior Notes due 2023—U.S. Dollar denominated

 

 

800

 

 

 

800

 

Receivables financing facility due 2020—U.S. Dollar LIBOR at average floating rate of

   2.46%

 

 

275

 

 

 

275

 

Principal amount of debt

 

 

10,269

 

 

 

7,219

 

Less: unamortized discount and debt issuance costs

 

 

(44

)

 

 

(19

)

Less: current portion

 

 

(103

)

 

 

(92

)

Long-term debt

 

$

10,122

 

 

$

7,108

 

December 31,
(dollars in millions)20232022
Revolving Credit Facility due 2026:
U.S. Dollar denominated borrowings—U.S. Dollar Term SOFR at average floating rates of 6.71%$100 $425 
Senior Secured Credit Facilities:
Term A Loan due 2026—U.S. Dollar Term SOFR at average floating rates of 6.71%1,270 1,343 
Term A Loan due 2026—Euribor at average floating rates of 5.18%306 314 
Term A Loan due 2027—U.S. Dollar Term SOFR at average floating rates of 6.74%1,156 1,219 
Term B Loan due 2024—Euribor at average floating rates of —%— 1,172 
Term B Loan due 2025—U.S. Dollar Term SOFR at average floating rates of —%— 670 
Term B Loan due 2025—U.S. Dollar Term SOFR at average floating rates of —%— 860 
Term B Loan due 2025—Euribor at average floating rates of 5.93%576 559 
Term B Loan due 2031—U.S Dollar Term SOFR at average floating rates of 7.35%1,500 — 
5.700% Senior Secured Notes due 2028—U.S. Dollar denominated750 — 
6.250% Senior Secured Notes due 2029—U.S. Dollar denominated1,250 — 
5.0% Senior Notes due 2027—U.S. Dollar denominated1,100 1,100 
5.0% Senior Notes due 2026—U.S. Dollar denominated1,050 1,050 
6.500% Senior Notes due 2030—U.S. Dollar denominated500 — 
2.875% Senior Notes due 2025—Euro denominated464 450 
2.25% Senior Notes due 2028—Euro denominated795 771 
2.875% Senior Notes due 2028—Euro denominated785 761 
1.750% Senior Notes due 2026—Euro denominated607 589 
2.250% Senior Notes due 2029—Euro denominated993 964 
Receivables financing facility due 2024—U.S. Dollar Term SOFR at average floating rates of 6.36%
Revolving Loan Commitment110 110 
Term Loan440 440 
Principal amount of debt13,752 12,797 
Less: unamortized discount and debt issuance costs(79)(50)
Less: current portion(718)(152)
Long-term debt$12,955 $12,595 


Contractual maturities of long-term debt atas of December 31, 20172023 are as follows (in millions):

follows:

2018

 

$

103

 

2019

 

 

103

 

2020

 

 

378

 

2021

 

 

1,652

 

2022

 

 

34

 

Thereafter

 

 

7,999

 

 

 

$

10,269

 

(in millions)
2024$718 
20251,207 
20263,231 
20272,084 
20282,345 
Thereafter4,167 
$13,752 

At December 31, 2017, there were bank guarantees totaling approximately £3 million (approximately $4 million) issued against the availability of the general banking facility with a European headquartered bank through their operations in the United Kingdom.


93

Senior Secured Credit Agreement and Senior Notes

2017Facilities


2023 Financing Transactions


On November 28, 2023, the Company entered into an amendment (the “Amendment”) to its Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), among IQVIA Inc., a wholly owned subsidiary of the Company, the Company, IQVIA RDS Inc., a wholly owned subsidiary of the Company, the other guarantors party thereto, Bank of America, N.A. as administrative agent and as collateral agent, and the Lenders (as defined therein) party thereto. Pursuant to the Amendment, the Company borrowed $1,500 million in incremental Term B-4 Dollar Loans (as defined in the Credit Agreement) due January 2, 2031. The net proceeds from the Term B-4 Dollar Loans were used to repay certain of the outstanding term loans due in 2024 and in 2025 under the Company’s senior secured credit facilities, and to pay fees and expenses related to the Amendment and the offering of 2029 Senior Secured Notes (as defined below). In connection with this Amendment, the Company recognized a $6 million loss on extinguishment of debt, which includes fees and expenses.

On April 17, 2023, the Company increased the capacity of the senior secured revolving credit facility by $500 million U.S. dollars, bringing the total capacity of the revolving credit facility to $2,000 million. At the same time, the Company also amended the benchmark rate of the U.S dollar revolving credit facility and the U.S dollar Term A Loans from U.S dollar LIBOR to U.S. dollar Secured Overnight Financing Rate term rates ("Term SOFR"), plus a 10 basis point Credit Spread Adjustment.

As of December 31, 2017,2023, the Company��sCredit Agreement provided financing through several senior secured credit facility provided financingfacilities of up to approximately $5,656$6,808 million, which consisted of $5,185$4,908 million principal amountamounts of debt outstanding (as detailed in the table above), and $471$1,900 million of available borrowing capacity on the $1.0 billion$2,000 million revolving credit facility that expiresand standby letters of credit. The revolving credit facility is comprised of a $1,175 million senior secured revolving facility available in 2021.

97

U.S. dollars, a $600 million senior secured revolving facility available in U.S. dollars, Euros, Swiss Francs and other foreign currencies, and a $225 million senior secured revolving facility available in U.S. dollars and Yen.


2022 Financing Transactions
On June 16, 2022, the Company entered into Amendment No. 1 to the Credit Agreement to borrow $1,250 million in additional U.S. Dollar denominated term A loans due 2027 (the “Additional Term A Loans”). The Additional Term A Loans bear interest based at Term SOFR, plus a credit spread adjustment of 0.10% plus a margin ranging from 1.125% to 2.00%, with a Term SOFR floor of 0.00% per annum. The proceeds from the Additional Term A Loans were used to repay approximately $950 million of outstanding revolving credit loans under the Credit Agreement and for general corporate purposes.

On October 13, 2022, the Company elected to prepay $510 million, the entire outstanding balance, of its U.S. Dollar Term B Loan due 2024.

Senior Secured Notes

2023 Financing Transactions

On November 28, 2023, IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

On September 14, 2017, the Company’s wholly owned subsidiary, Quintiles IMS IncorporatedInc. (the “Issuer”), issued €420completed the issuance and sale of $1,250 million (approximately $501 million) aggregate principal amountin gross proceeds of 2.875%6.250% senior secured notes due 20252029 (the “2025“2029 Senior Secured Notes”). The 2029 Senior Secured Notes were issued pursuant to an Indenture, dated November 28, 2023, among the Issuer, U.S. Bank Trust Company, National Association, as trustee of the 2029 Senior Secured Notes and as collateral agent, and the Company and certain subsidiaries of the Issuer as guarantors. The net proceeds from the 2029 Senior Secured Notes offering were used to repay certain of the outstanding term loans under the Company’s senior secured credit facilities due in 2024 and in 2025, and to pay fees and expenses related to the 2029 Senior Secured Notes whichoffering and the Amendment.


The 2029 Senior Secured Notes are unsecuredsecured obligations of the Issuer,Company, will mature on September 15, 2025February 1, 2029, unless earlier repurchased or redeemed in accordance with their terms, and bear an interest at the rate of 2.875%, which is paid6.250% per year, with interest payable semi-annually on MarchFebruary 1 and August 1 of each year, beginning on February 1, 2024. The Company may redeem the 2029 Senior Secured Notes prior to January 1, 2029 subject to a customary make-whole premium, and thereafter subject to a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest.
94

On May 23, 2023, IQVIA Inc. (the “Issuer”) completed the issuance and sale of $750 million in gross proceeds of 5.700% senior secured notes due 2028 (the “2028 Senior Secured Notes”). The 2028 Senior Secured Notes were issued pursuant to an Indenture, dated May 23, 2023, among the Issuer, U.S. Bank Trust Company, National Association, as trustee of the 2028 Senior Secured Notes and as collateral agent, and the Company and certain subsidiaries of the Issuer as guarantors. The net proceeds from the 2028 Senior Secured Notes offering were used to repay existing borrowings under the Company’s revolving credit facility and to pay fees and expenses related to the 2028 Senior Secured Notes offering and offering of 2030 Senior Notes (as defined below).

The 2028 Senior Secured Notes are secured obligations of the Company, will mature on May 15, 2028, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 5.700% per year, with interest payable semi-annually on May 15 and SeptemberNovember 15 of each year, beginning on MarchNovember 15, 2018.2023. The 2025Company may redeem the 2028 Senior Secured Notes prior to April 15, 2028 subject to a customary make-whole premium, and thereafter subject to a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest.

Each of the Company's current direct and indirect material U.S. wholly owned restricted subsidiaries (excluding IQVIA Solutions Japan LLC and IQVIA Services Japan LLC) and IQVIA Holdings Inc., have jointly and severally, irrevocably and unconditionally, on a senior secured basis, guaranteed the obligations under the 2028 Senior Secured Notes and the 2029 Senior Secured Notes.

The 2028 Senior Secured Notes and 2029 Senior Secured Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. In January 2024, the Company filed a registration statement with respect to an offer (the “Exchange Offer”) to exchange the 2028 Senior Secured Notes for an equal amount of $750 million aggregate principal amount of 5.700% Senior Secured Notes due 2028 registered under the Securities Act (the “2028 Registered Notes”) and the 2029 Senior Secured Notes for an equal amount of $1,250 million aggregate principal amount of 6.250% Senior Secured Notes due 2029 registered under the Securities Act (the “2029 Registered Notes”). The Exchange Offer commenced on January 26, 2024 and will expire on February 23, 2024, unless the Company extends the offer. The terms of the 2028 Registered Notes and the 2029 Registered Notes to be issued in the Exchange Offer are substantially identical in all material respects to the terms of the 2028 Senior Secured Notes and 2029 Senior Secured Notes, respectively, except that the registered notes will not be subject to restrictions on transfer or to any increase in the annual interest rate for failure to comply with the applicable registration rights agreement.

2022 Financing Transactions

None

Senior Notes

2023 Financing Transactions

On May 23, 2023, IQVIA Inc. (the “Issuer”) completed the issuance and sale of $500 million in gross proceeds of 6.500% senior notes due 2030 (the “2030 Senior Notes”). The 2030 Senior Notes were issued pursuant to an Indenture, dated May 23, 2023, among the Issuer, U.S. Bank Trust Company, National Association, as trustee of the 2030 Senior Notes, and certain subsidiaries of the Issuer as guarantors. The net proceeds from the 2030 Senior Notes offering were used to repay existing borrowings under the Company’s revolving credit facility, and to pay fees and expenses related to the 2030 Senior Notes offering and 2028 Senior Secured Notes offering.
The 2030 Senior Notes are unsecured obligations of the Company, will mature on May 15, 2030, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 6.500% per year, with interest payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2023. The Company may be redeemedredeem the 2030 Senior Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to SeptemberMay 15, 20202026 (subject to a certain customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 1.438%3.250% to 0%0.000%. On September 18, 2017, the Company amended its senior credit facility agreement (the “Amendment”) to provide for an incremental term B loan of $750 million and to increase the facility’s restricted payment capacity, specifically an increase to the total net leverage ratio conditions for unlimited restricted investments from 4.25-to-1.00 to 4.50-to-1.00 and for dividends and distributions from 4.00-to-1.00 to 4.50-to-1.00. The new term B loan will mature in 2025 and bear a floating interest rate of LIBOR plus 2.00% per year.

On March 7, 2017, the Company refinanced all of its term B loans due 2021—U.S. dollar denominated (approximately $1,700 million) and its term B loans due 2021—Euro denominated (approximately $765 million) with an extended and repriced term B loan facility due in 2024 for an aggregate principal amount of approximately $2,479 million comprised of $1,200 million U.S. dollar denominated term B loans and €1,200 million ($1,279 million) Euro denominated term B loans. The U.S. dollar denominated term B loans bear interest based on the U.S. Dollar LIBOR with a floor of 0.75%, plus a margin of 2.00% for an all-in interest rate of 3.69% as of December 31, 2017. The Euro denominated term B loans bear interest based on the Euro LIBOR with a floor of 0.75%, plus a margin of 2.00% for an all-in interest rate of 2.75% as of December 31, 2017. In connection with this refinancing, the Company recognized a $3 million loss on extinguishment of debt, which includes fees and related expenses.

On February 28, 2017, the Issuer issued €1,425 million (approximately $1,522 million) aggregate principal amount of 3.25% senior notes due 2025 (the “2017 Notes”). The 2017 Notes, which are unsecured obligations of the Issuer, mature on March 15, 2025 and bear an interest rate of 3.25%, which is paid semi-annually on March 15 and September 15 of each year, beginning on September 15, 2017. The 2017 Notes may be redeemed prior to their final stated maturity, subject to a customary make-whole premium at any time prior to March 15, 2020 (subject to a certain customary “equity claw” redemption right) and thereafter subject to annually declining redemption premiums at any time prior to March 15, 2022. During March 2017, the proceeds of the 2017 Notes were used to pay fees and expenses related to the notes offering and the refinancing referenced above and other general corporate purposes, including the repurchase of the Company’s common stock.

The net proceeds from the offering of the 2025 Notes and the Amendment referenced above were used to refinance certain indebtedness, including the redemption of the outstanding 4.125% Euro denominated senior notes due 2023 (the “4.125% Notes”), to pay down the revolving credit facility, to pay fees and expenses related to the offering of the 2025 Notes and the Amendment and for other general corporate purposes, including the repurchase of the Company’s common stock and acquisitions. In connection with this refinancing, the Company recognized a $16 million loss on extinguishment of debt, which includes the 4.125% Notes make-whole premium. 

2016

2022 Financing Transactions

On October 3, 2016, the Company refinanced the term A loans due 2019 (approximately $884 million) assumed in the Merger with a term A loan facility due in 2021 for an aggregate principal amount of approximately $1,350 million comprised of both U.S. dollar denominated term A loans and Euro denominated term A loans. Additionally, the revolving credit facility was refinanced to an aggregate principal amount equal to $1.0 billion. The additional proceeds were used, in part, to fund the redemption on November 1, 2016 of $500 million of 6% Senior Notes due 2020 assumed in the Merger, at a redemption price equal to 101.5% of the aggregate outstanding principal amount plus accrued interest to the redemption date. The Company incurred a loss on extinguishment of debt of approximately $8 million related to the aggregate payments for make-whole premiums.

None
95

98

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

On September 28, 2016, IMS Health issued senior unsecured notes totaling principal amount of $1,750 million, which consisted of (i) $1,050 million of 5% senior notes due October 2026 (the “5% Dollar Notes”) and (ii) €625 million of 3.5% senior notes due October 2024 (the “3.5% Euro Notes” and, together with the 5% Dollar Notes, the “2016 Notes”). The proceeds of the 2016 Notes, which the Company assumed upon closing of the Merger, were used on October 3, 2016 to repay in full ($1,389 million) the term loans outstanding under the Quintiles Transnational senior secured credit facilities. Interest on the 2016 Notes is payable semi-annually, beginning on April 15, 2017. The notes are guaranteed on a senior unsecured basis by the Company’s wholly-owned domestic restricted subsidiaries (excluding IMS Japan K.K.) and, subject to certain exceptions, each of the Company’s future domestic subsidiaries that guarantees the Company’s other indebtedness or indebtedness of any of the guarantors. The 5% Dollar Notes and the 3.5% Euro Notes may be redeemed, either together or separately, prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to October 15, 2021 with respect to the 5% Dollar Notes and October 15, 2019 with respect to the 3.5% Euro Notes (in each case subject to a customary “equity claw” redemption right) and thereafter subject to annually declining redemption premiums at any time prior to October 15, 2024 with respect to the 5% Dollar Notes and October 15, 2021 with respect to the 3.5% Euro Notes.

The Company also assumed in the Merger €275 million of 4.125% Senior Notes due in April 2023 (the “4.125% Senior Notes”). As noted above, during the third quarter of 2017 the 4.125% Senior Notes were redeemed. Interest on the 4.125% Senior Notes was payable semi-annually each year and commenced on October 1, 2015.

Receivables Financing Facility

On December 15, 2017, the Company amended its Receivables Financing Agreement to extend the original term of its receivables financing facility to December 15, 2020. In addition, the applicable margin (over LIBOR) changed to 90 bps regardless of the Company’s credit rating. Prior to the amendment, the margin was based on the Company’s credit rating and could range from 85 bps to 135 bps.

On December 5, 2014, the Company entered into a four-year arrangement to securitize certain of its accounts receivable.

Under the receivables financing facility, certain of the Company’sCompany's accounts receivable are sold on a non-recourse basis by certain of itsthe Company's consolidated subsidiaries (each, an “Originator”) to another of itsthe Company's consolidated subsidiaries, a bankruptcy-remote special purpose entity (“SPE”(the “SPE”). The SPE obtained a term loan and revolving loan commitment from a third-party lender, secured by liens on the assets of the SPE, to finance the purchase of the accounts receivable, which includes a $275$440 million term loan and a $25$110 million revolving loan commitment. TheAs of December 31, 2023, no additional amounts of revolving loan commitment may be increased by an additional $35 million as amounts are repaidloans were available under the term loan.receivables financing facility. The Company has guaranteed the performance of the obligations of existing and future subsidiaries that sell and service the accounts receivable under the receivables financing facility. The assets of the SPE are not available to satisfy any of the Company’s obligations or any obligations of its subsidiaries. As of December 31, 2017, $252023, approximately $1,566 million of revolving loansthe Company's trade accounts receivable and unbilled services were available underpledged as collateral to secure the receivables financing facility.


Restrictive Covenants


The Company’s debt agreements provide for certain covenants and events of default customary for similar instruments, including a covenant not to exceed a specified ratio of consolidated senior secured net indebtedness to Consolidated EBITDA, as defined in the Company’s senior secured credit facility agreement and a covenant to maintain a specified minimum interest coverage ratio. If an event of default occurs under any of the Company’s or the Company’s subsidiaries’ financing arrangements, the creditors under such financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under the revolving credit facility and New Term Loans,term loans, other actions permitted to be taken by a secured creditor. The Company’s long-term debt arrangements contain usual and customary restrictive covenants that, among other things, place limitations on the Company’s ability to declare dividends. For additional information regarding these restrictive covenants, see Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer PurchasesAs of Equity Securities—Dividend Policy” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included elsewhere in this Annual Report on Form 10-K. At December 31, 2017,2023, the Company was in compliance in all material respects with the financial covenants under the Company’s financing arrangements.


99

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

12.

11. Leases


The Company leases facilities underhas operating leases for corporate offices, data centers, motor vehicles and certain equipment, many of which contain renewal and escalation clauses. The Company also leases certain equipment and motor vehicles underThese operating leases. The leases expire at various dates through 20292037 with options to cancel certain leases at various intervals. Rental expenses under these agreementsThe Company also has finance leases for offices and lab spaces that expire at various dates through 2048.

The components of lease expense were $197 million, $127 million and $109 million in 2017, 2016 and 2015, respectively.

The following is a summary of futureas follows:

Year Ended December 31,
(in millions)Classification202320222021
Operating lease cost (1)
Selling, general and administrative expenses$160 $171 $184 
Finance lease cost (1)
Depreciation and amortization, and Interest expense18 12 10 
Total lease cost$178 $183 $194 
(1) Includes variable lease costs, which are immaterial.

96

Other information related to leases was as follows:
Year Ended December 31,
(in millions)202320222021
Supplemental Cash Flow:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$175 $173 $175 
Operating cash flows for finance leases$8 $5 $— 
Financing cash flows for finance leases$3 $4 $— 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$59 $79 $81 
Finance leases$— $54 $44 
Weighted Average Remaining Lease Term:
Operating leases4.61 years4.72 years4.53 years
Finance leases20.67 years21.64 years21.28 years
Weighted Average Discount Rate:
Operating leases3.81 %3.12 %3.36 %
Finance leases3.88 %3.87 %2.70 %

Future minimum lease payments under operatingnon-cancellable leases that have initial or remaining non-cancelable lease terms in excessas of one year at December 31, 2017 (in millions):

2023 were as follows:

 

 

Operating

Leases

 

2018

 

$

169

 

2019

 

 

135

 

2020

 

 

115

 

2021

 

 

94

 

2022

 

 

75

 

Thereafter

 

 

157

 

Total minimum lease payments

 

$

745

 

(in millions)Operating LeasesFinance Leases
2024$117 $13 
202596 13 
202655 13 
202736 14 
202824 14 
Thereafter31 283 
Total future minimum lease payments359 350 
Less imputed interest(29)(122)
Total$330 $228 
Reported as of December 31, 2023:
Other current liabilities$107 $— 
Operating lease liabilities223 — 
Other liabilities— 228 
Total$330 $228 

13.


12. Contingencies


The Company and its subsidiaries are involved in legal and tax proceedings, claims and litigation arising in the ordinary course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded reservesan accrual in the consolidated financial statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any.

However, even in many instances where the Company has recorded an estimated liability, the Company is unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect the Company’s results of operations, financial position or cash flows. As additional information becomes available, the Company adjusts its assessments and estimates of such liabilities accordingly.


97

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


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

100

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The Company’s wholly-owned subsidiary, IMS Government Solutions Inc. (“IMS Government Solutions”), is primarily engaged in providing services under contracts with the United States government. United States government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the United States government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract (the “GSA Contract”), which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). The potential noncompliance arose from two primary areas: first, at the direction of the government, work performed under one task order was invoiced under another task order without the appropriate modifications to the orders being made; and second, personnel who did not meet strict compliance with the labor categories component of the qualification requirements of the GSA Contract were assigned to contracts. The Company is currently unable to determine the outcome of all of these matters pending the resolution of the Voluntary Disclosure Program process and the ultimate liability arising from these matters could exceed the Company’s current reserves.

On February 13, 2014, a group of approximately 1,200 medical doctors and 900 private individuals filed a civil lawsuit with the Seoul Central District Court against IMS Korea and two other defendants, KPAthe Korean Pharmaceutical Association (“KPA”) and the Korean Pharmaceutical Information Center (“KPIC”). The civil lawsuit alleges KPA and KPIC collected their personal information in violation of applicable privacy laws without the necessary consent through a software system installed on pharmacy computer systems in Korea, and that personal information was transferred to IMS Korea and sold to pharmaceutical companies. On September 11, 2017, the District Court issued a final decision that the encryption in use by the defendants since June 2014 was adequate to meet the requirements of the Korean Personal Information Privacy Act (“PIPA”) and the sharing of non-identified information for market research purposes was allowed under PIPA. The District Court also found an earlier version of encryption was insufficient to meet PIPA requirements, but no personal data had been leaked or re-identified. The District Court did not award any damages to plaintiffs. Approximately 280 medical doctors and 200 private individuals appealed the District Court decision. On May 3, 2019, the Appellate Court issued a final decision in which it concluded all of the non-identified information transferred by KPIC to IMS Korea for market research purposes violated PIPA, but did not award any damages to plaintiffs (affirming the District Court’s decision on this latter point). On May 24, 2019, approximately 247 plaintiffs appealed the Appellate Court’s decision to the Supreme Court. The Company believes the appeal is without merit and intends tois vigorously defenddefending its position.


On July 23, 2015, indictments were issued by the Seoul Central District Prosecutors’ Office in South Korea against 24 individuals and companies alleging improper handling of sensitive health information in violation of, among others, South Korea’s Personal Information Protection Act. IMS Korea and two of its employees were among the individuals and organizations indicted. Although there is no assertion that IMS Korea used patient identified health information in any of its offerings, prosecutors allege that certain of IMS Korea’s data suppliers should have obtained patient consent when they converted sensitive patient information into non-identified data and that IMS Korea had not taken adequate precautions to reduce the risk of re-identification. On February 14, 2020, the Seoul Central District Court acquitted IMS Korea and its two employees of the charges of improper handling of sensitive health information, and the Prosecutor's Office appealed. On December 23, 2021, the appellate court affirmed the judgment of the Seoul Central District Court. The Prosecutor's Office has appealed to the Supreme Court. The Company believes the indictment is without merit as it acted in compliance with all applicable laws at all times and intends to vigorously defend its position.

position on appeal.


On January 10, 2017, IQVIA Inc.,Quintiles IMS Health Incorporated and IMS Software Services Inc.Ltd. (collectively “IQVIA Parties”), filed a lawsuit in the U.S. District Court for the District of New Jersey against Veeva Systems, Inc. (“Veeva”) alleging Veeva unlawfully used IQVIA Parties intellectual property to improve Veeva data offerings, to promote and market Veeva data offerings and to improve Veeva technology offerings. IQVIA Parties seek injunctive relief, appointment of a monitor, the award of compensatory and punitive damages and reimbursement of all litigation expenses, including reasonable attorneys’ fees and costs. On March 13, 2017, Veeva filed counterclaims alleging anticompetitive business practices in violation of the Sherman Act and state laws. Veeva claims damages in excess of $200 million, and is seeking punitive damages and litigation costs, including attorneys’ fees. The Company believes the counterclaims are without merit, rejectrejects all counterclaims raised by Veeva and intendintends to vigorously defend IQVIA Parties’ position and pursue the Company’sits claims against Veeva.

101

Since the initial filings, the parties have filed additional litigations against each other, primarily concerning the use of IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notesdata with various other Veeva products. Trial has been scheduled for early 2025.


On May 7, 2021, the Court issued an order and opinion (the “Order”) in which it found significant evidence that Veeva had (1) misappropriated IQVIA data and unlawfully used it to Consolidated Financial Statements - Continued

14.improve Veeva data offerings, (2) engaged in a cover-up by deleting significant evidence of its theft of IQVIA’s trade secrets, and (3) improperly withheld certain evidence in furtherance of a crime and/or fraud against IQVIA. The Court imposed five sanctions against Veeva, including ordering three separate adverse inference instructions be issued to the jury and that IQVIA be permitted to present evidence to the jury of Veeva’s destruction efforts. Veeva is currently appealing the Order.


98

13. Stockholders’ Equity


Preferred Stock


The Company is authorized to issue 1.0 million shares of preferred stock, $0.01 per share par value. No shares of preferred stock were issued and outstanding as of December 31, 20172023 or 2016.

2022.


Equity Repurchase Program and Secondary Public Offerings


On October 30, 2013, the Company’s Board of Directors (the “Board”) first approved anthe Company's equity repurchase program (the “Repurchase Program”), authorizing the repurchase of up to $125 million of either the Company’s common stock or vested in-the-money employee stock options, or a combination thereof.stock. The Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of itsthe Company's common stock by $600 million, $1.5 billion, $1$2.0 billion, $1.5 billion, $2.0 billion, and $1$2.0 billion in 2015, November 2016, February 2017, 2018, 2019, and May 2017, respectively,2022, respectively. On July 31, 2023, the Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of the Company's common stock by an additional $2,000 million, which increased the total amount that has been authorized under the Repurchase Program to $4.225 billion.$11,725 million. The Repurchase Program does not obligate the Company to repurchase any particular amount of common stock, or vested in-the-money employee stock options, and it couldmay be modified, extended, suspended or discontinued at any time.

During the year ended December 31, 2017, the Company repurchased 30,896,313 shares of its common stock, including repurchases both under and outside of the Repurchase Program at an average market price per share of $84.80 for an aggregate purchase price of approximately $2.6 billion. These amounts include shares of the Company’s common stock that it repurchased from certain of its principal stockholders in a private transaction and directly from underwriters in connection with three separate underwritten secondary public offerings described below.

In February 2017, the Company entered into a share repurchase agreement with certain of the Company’s principal stockholders under the Repurchase Program. Pursuant to that agreement, the Company purchased an aggregate of 9,677,420 shares of the Company’s common stock in a private transaction for an aggregate purchase price of approximately $750 million. This transaction was consummated on February 28, 2017.

On May 24, 2017, an automatic shelf registration statement (including a prospectus) relating to the offering of an unspecified amount of common stock was filed by the Company with the Securities and Exchange Commission and became effective upon filing. The registration statement will expire three years after the date of filing. Additionally, in May, the Company completed an underwritten secondary public offering of 10,571,003 shares of its common stock held by certain of the Company’s principal stockholders (the “May Selling Stockholders”), of which the Company repurchased 3,571,003 shares for an aggregate purchase price of approximately $300 million. The Company did not offer any stock in this transaction and did not receive any proceeds from the sale of the shares by the May Selling Stockholders. Pursuant to an agreement with the underwriter, the Company’s per-share purchase price for repurchased shares was the same as the per-share purchase price payable by the underwriter to the May Selling Stockholders.

In September 2017, the Company completed an underwritten secondary public offering of 9,000,000 shares of its common stock held by certain of the Company’s principal stockholders (the “September Selling Stockholders”), of which the Company repurchased 4,000,000 shares for an aggregate purchase price of approximately $380 million. The Company did not offer any stock in this transaction and did not receive any proceeds from the sale of the shares by the September Selling Stockholders. Pursuant to an agreement with the underwriter, the Company’s per-share purchase price for repurchased shares was the same as the per-share purchase price payable by the underwriter to the September Selling Stockholders. 

In November 2017, the Company completed an underwritten secondary public offering of 10,000,000 shares of its common stock held by certain of the Company’s principal stockholders (the “November Selling Stockholders”), of which the Company repurchased 2,500,000 shares for an aggregate purchase price of approximately $255 million. These shares were repurchased outside of the Company’s existing Repurchase Program. The Company did not offer any stock in this transaction and did not receive any proceeds from the sale of the shares by the November Selling Stockholders. Pursuant to an agreement with the underwriter, the Company’s per-share purchase price for repurchased shares was the same as the per-share purchase price payable by the underwriter to the November Selling Stockholders. 


102

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

As of December 31, 2017,2023, the Company hashad remaining authorization to repurchase up to $182$2,363 million of its common stock under the Repurchase Program. In addition, from time to time, the Company has repurchased and may continue to repurchase common stock through private or other transactions outside of the Repurchase Program. In February 2018,

There were no equity offerings during the Board authorized an increase of the share repurchase authorization by $1.5 billion. See Note 27 for additional information regarding this authorization increase.

years ended December 31, 2023, 2022 and 2021.


Summary

Below is a summary of the share repurchases made both under and outside of the Repurchase Program (in millions, except per share data):

Program:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
(in millions, except per share data)(in millions, except per share data)202320222021

Number of shares of common stock repurchased

 

 

30.9

 

 

 

14.3

 

 

 

7.8

 

Aggregate purchase price

 

$

2,620

 

 

$

1,098

 

 

$

516

 

Average price per share

 

$

84.80

 

 

$

76.57

 

 

$

65.56

 


Non-controlling Interests

As discussed further in Note 15,


On April 1, 2021, the Company contributed businesses toacquired the 40% non-controlling interest in Q2 Solutions, a joint venture withfully consolidated subsidiary, from Quest Diagnostics Incorporated (“Quest”("Quest") that was recorded at book value (carryover basis) because the Company owns 60% of the joint venture and maintains control of these businesses. As a result, Quest’s non-controlling interest in the joint venture, referred to as Q2 Solutions, is equal to 40%. Quest’s non-controlling interest was $249for approximately $758 million, at December 31, 2017.

15. Business Combinations

IMS Health

On October 3, 2016, pursuant to the terms of the Merger Agreement, IMS Health mergedfinanced with and into Quintiles, with Quintiles continuing as the Surviving Corporation.cash on hand. The combination of Quintiles and IMS Health capabilities and resources creates an information and technology enabled healthcare service provider with a full suite of end-to-end clinical and commercial offerings. The Merger was accounted for as a business combination with Quintiles considered the accounting and the legal acquirer. Immediately prior to the completion of the Merger, Quintiles reincorporated as a Delaware corporation. The Surviving Corporation changed its name to Quintiles IMS Holdings, Inc. At the effective time of the Merger, IMS Health common stock was automatically converted into 0.3840 of a share of the Company’s common stock. In addition, IMS Health equity awards held by current employees and certain members of the former IMS Health board of directors were converted into the Company’s equity awards after giving effect to the exchange ratio. The terms of these awards, including vesting provisions, are substantially consistent to those of the historical IMS Health equity awards. All of the Company’s and IMS Health’s performance units outstanding at the date of the Merger were converted into restricted stock units with service based vesting requirements. The merger consideration was approximately $10.4 billion (based on the closing price of the Company’s common stock on October 3, 2016), and consisted of the fair value of the Company’s common stock issued (approximately 126.6 million shares) in exchange for the IMS Health common stock as well as the fair value of the vested portion of the converted IMS Health equity awards. The Merger-date value of former IMS Health stock-based awards was valued using the Black-Scholes-Merton model and apportioned between Merger consideration (purchase price) and unearned compensation to be recognized in expense as earned in future periods based on remaining service periods. In connection with the IMS Health acquisition, the Company recorded goodwill, primarily attributable to the assembled workforce of IMS Health and the expected synergies, which was assigned to the Commercial Solutions segment ($9,688 million), the Research & Development Solutions segment ($533 million) and the Integrated Engagement Services segment ($67 million). The goodwill is not deductible for income tax purposes.

103

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Quest

On July 1, 2015, the Company and Quest closed on a joint venture transaction that resulted in the combinationCompany having 100% ownership in Q2 Solutions. As of their respective global clinical trials laboratory operations. The joint venture transaction was effected through the creation of two primary new legal entities thatDecember 31, 2023 and 2022, the Company controls. Both the Company’s and Quest’s clinical trials laboratory operations were contributed to these new legal entities. had no other material non-controlling interests.


14. Business Combinations

The Company accounted for the contribution of the Quest businesses as a business combination. Quest was issued a 40% equity interest in the legal entities, the fair value of which was $423 million on July 1, 2015 (40% of the fair value of all operations contributed by both parties) and represents the purchase price paid by the Company for the clinical trials laboratory operations that Quest contributed to the joint venture transaction. The resulting combined capabilities are designed to provide its clients with globally scaled end-to-end clinical trials laboratory services and the combined business is referred to and marketed as Q2 Solutions. The Company accounted for the contribution of the Quest businesses as a business combination and consolidated the related new legal entities in its financial statements with a non-controlling interest for the portion owned by Quest. The Company recorded goodwill, primarily attributable to assembled workforce and expected synergies. This business combination is part of the Research & Development Solutions segment and the resulting goodwill is not deductible for income tax purposes.

The following table summarizes the estimated fair value of the net assets acquired at the date of the acquisitions (in millions):

 

 

IMS Health

 

 

Quest

 

Assets acquired:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,031

 

 

$

32

 

Accounts receivable and unbilled services

 

 

528

 

 

 

6

 

Prepaid expenses

 

 

85

 

 

 

1

 

Other current assets

 

 

145

 

 

 

4

 

Property and equipment

 

 

247

 

 

 

16

 

Goodwill

 

 

10,288

 

 

 

262

 

Other identifiable intangibles

 

 

6,435

 

 

 

126

 

Deferred income tax asset – long-term

 

 

25

 

 

 

—

 

Other long-term assets

 

 

71

 

 

 

—

 

Liabilities assumed:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(700

)

 

 

(13

)

Unearned income

 

 

(175

)

 

 

—

 

Current portion of long-term debt

 

 

(88

)

 

 

—

 

Other current liabilities

 

 

(45

)

 

 

—

 

Long-term debt, less current portion

 

 

(6,070

)

 

 

—

 

Deferred income tax liability – long-term

 

 

(2,104

)

 

 

(10

)

Other long-term liabilities

 

 

(248

)

 

 

(1

)

Net assets acquired

 

$

10,425

 

 

$

423

 

The other identifiable intangible assets consisted of the following (in millions):

 

 

IMS Health

 

 

Quest

 

Client relationships

 

$

3,960

 

 

$

74

 

Backlog

 

 

—

 

 

 

33

 

Trade names

 

 

385

 

 

 

19

 

Databases

 

 

1,820

 

 

 

—

 

Software

 

 

270

 

 

 

—

 

Total other identifiable intangibles

 

$

6,435

 

 

$

126

 

Amortized over a weighted average useful life (in years)

 

 

18

 

 

 

9

 

The acquired Quest trade name is an indefinite-lived intangible asset that is not amortized.

104

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Acquisition Related Costs

Acquisition related costs include the direct and incremental costs associated with mergers and acquisitions such as investment banking, legal, accounting and consulting fees. The Company recognized approximately $36 million of acquisition related costs associated with the IMS Health merger during the year ended December 31, 2016, which are included with merger related costs on the consolidated statement of income. Acquisition related costs for all other acquisitions were immaterial and are not presented.

Unaudited Pro Forma Information

The following unaudited pro forma information presents the financial results as if the acquisition of IMS Health had occurred on January 1, 2015 with pro forma adjustments to give effect to (i) an increase in depreciation and amortization expense for fair value adjustments of property, plant and equipment and intangible assets, (ii) an increase in stock-based compensation expense resulting from the exchange of the vested IMS Health equity awards for the Company’s equity awards and (iii) the related income tax effects. The pro forma results do not include any cost synergies, costs or other effects pertaining to the integration of IMS Health. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred for the periods presented below had the IMS Health acquisition been completed on January 1, 2015, nor are they indicative of the future operating results of the Company.

The following table summarizes the pro forma results (in millions, except earnings per share):

 

 

Year Ended December 31,

 

 

 

2016

 

 

2015

 

Revenues

 

$

7,784

 

 

$

7,180

 

Reimbursed expenses

 

 

1,514

 

 

 

1,411

 

Total revenues

 

$

9,298

 

 

$

8,591

 

Net income attributable to IQVIA Holdings Inc.

 

$

42

 

 

$

450

 

Earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic

 

$

0.17

 

 

$

1.80

 

Diluted

 

$

0.17

 

 

$

1.76

 

Pro forma information is not presented for any other acquisitions as the aggregate operations of the acquired businesses were not significant to the overall operations of the Company.

The Company’s consolidated statements of income for the year ended December 31, 2016 includes $806 million of revenues related to the IMS Health acquisition. Following the closing of the IMS Health acquisition, the Company began integrating IMS Health’s operations. As a result, computing a separate measure of IMS Health’s stand-alone profitability for periods after the acquisition date is impracticable.

Other Acquisitions

The Company also completed a number ofseveral individually immaterial acquisitions during the yearyears ended December 31, 2017.2023 and 2022. The Company’s assessment of fair value, including the valuation of certain acquired intangibles and the purchase price allocation related to thesethe acquisitions that occurred during the year ended December 31, 2023 is preliminary and subject to change upon completion. Further adjustments, largely related to acquired intangible assets and related deferred taxes, may be necessary as additional information related to the fair values of assets acquired and liabilities assumed is assessed during the measurement period (up to one year from the acquisition date). In addition The Company recorded goodwill from these acquisitions, primarily attributable to the merger with IMS Health in October 2016, the Company completed a few unrelated individually immaterial acquisitions during the fourth quarter of 2016.assembled workforce, expected synergies and new client relationships. The accompanying consolidated financial statements include the results of the acquisitions subsequent to eachtheir respective closing date.

105

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notesdates. Pro forma information is not presented as pro forma results of operations would not be materially different to Consolidated Financial Statements - Continued

the actual results of operations of the Company.


99

The following table provides certain preliminary financial information for these individually immaterial acquisitions, includingacquisitions:
Year Ended December 31,
(in millions)20232022
Assets acquired:
Cash and cash equivalents$28 $33 
Accounts receivable44 — 
Other assets9 115 
Goodwill533 1,026 
Other identifiable intangibles425 509 
Liabilities assumed:
Other liabilities(44)(103)
Deferred income taxes, long-term(18)(93)
Net assets acquired (1)
$977 $1,487 
(1) Net assets acquired include contingent consideration and deferred purchase price of $73 million and $139 million, respectively.

The portion of goodwill deductible for income tax purposes was preliminarily assessed as $379 million and $275 million for the years ended December 31, 2023 and 2022, respectively.

The following table provides a summary of the preliminary allocationsestimated fair value of the purchase prices to certain tangible and intangible assets acquiredacquired:
Year Ended December 31,
(in millions)Amortization Period20232022
Other identifiable intangibles:
Client relationships1-17 years$324 $382 
Software and related assets3-8 years44 79 
Backlog1-4 years51 24 
Databases3-7 years4 11 
Trade names2-5 years2 7 
Non-compete agreements3-5 years— 6 
Total Other identifiable intangibles$425 $509 

15. Restructuring

The Company has continued to take restructuring actions in the year ended December 31, 2023 to align its resources and goodwill (in millions):

 

 

Amortization

Period

 

2017

 

 

2016

 

Total cost of acquisitions, net of cash acquired(1)

 

 

 

$

923

 

 

$

136

 

Amounts recorded in the Consolidated Balance Sheets:

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

 

$

581

 

 

$

88

 

Portion of goodwill deductible for income tax purposes

 

 

 

 

235

 

 

 

—

 

Intangible assets:

 

 

 

 

 

 

 

 

 

 

Client relationships

 

6-16 years

 

$

285

 

 

$

31

 

Backlog

 

1-4 years

 

 

15

 

 

 

7

 

Non-compete agreements

 

2-5 years

 

 

14

 

 

 

9

 

Software

 

2-9 years

 

 

61

 

 

 

1

 

Trade names

 

1-17 years

 

 

17

 

 

 

—

 

Total intangible assets

 

 

 

$

392

 

 

$

48

 

(1)

Total cost of acquisitions, net of cash acquired, includes contingent consideration and deferred purchase payments of $69 million.

16. Restructuring

From time to time, the Company takes restructuring actionsreduce overcapacity to adapt to changing market conditions.conditions and integrate acquisitions. These actions include closing facilities, consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements and takingrequirements. These restructuring actions are expected to improve process efficiencies. There were restructuring plans approved in each of 2017, 2016 and 2015 for these activities. Additionally, in 2016, the Company also acquired certain restructuring.

continue into 2024.


The 2017 management approved plans resulted in approximately $61$84 million, $28 million and $20 million of restructuring expense, net of reversals, which consisted primarily of severance facility closure costs and other exit-related costs. The 2016 management approved plans resultedcosts in approximately $33 million of restructuring expense, net of reversals, which consisted of severance, facility closure coststhe years ended December 31, 2023, 2022 and other exit-related costs. The 2015 management approved plans resulted in approximately $23 million of restructuring expense, net of reversals, which consisted of severance, facility closure costs and other exit-related costs. Also during 2015, in connection with consummating the joint venture transaction with Quest, a restructuring plan was approved to reduce facility overcapacity and eliminate redundant roles. Since the start of this plan in 2015, the Company has recognized approximately $12 million of restructuring costs related to this plan.

2021, respectively.


100

The following amounts were recorded for the restructuring plans (in millions):

plans:

 

 

Severance and

Related Costs

 

 

Exit Costs

 

 

Total

 

Balance at December 31, 2015

 

$

12

 

 

$

2

 

 

$

14

 

Expense, net of reversals

 

 

60

 

 

 

3

 

 

 

63

 

Acquisitions

 

 

80

 

 

 

—

 

 

 

80

 

Payments

 

 

(48

)

 

 

(2

)

 

 

(50

)

Foreign currency translation and other

 

 

(5

)

 

 

—

 

 

 

(5

)

Balance at December 31, 2016

 

 

99

 

 

 

3

 

 

 

102

 

Expense, net of reversals

 

 

59

 

 

 

4

 

 

 

63

 

Payments

 

 

(77

)

 

 

(4

)

 

 

(81

)

Foreign currency translation and other

 

 

(1

)

 

 

1

 

 

 

—

 

Balance at December 31, 2017

 

$

80

 

 

$

4

 

 

$

84

 

(in millions)Severance and Related Costs
Balance as of December 31, 2021$30 
Expense, net of reversals28 
Payments(31)
Foreign currency translation and other(1)
Balance as of December 31, 2022$26 
Expense, net of reversals84
Payments(74)
Balance as of December 31, 2023$36


The reversals were due to changes in estimates primarily resulting from the redeployment of staff and higher than expected voluntary terminations. Restructuring costs are not allocated to the Company’s reportable segments as they are not part of the segment performance measures regularly reviewed by management. The Company expects the majority of the restructuring accruals atas of December 31, 20172023 will be paid in 2018.

106

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

17. Impairment Charges

During 2017 and 2016, the Company performed impairment assessments of Encore that resulted in the impairment of goodwill of $39.6 million and $23 million, respectively. These impairments represented the entire amount of goodwill associated with Encore.  Encore had certain strategic initiatives not performing as expected, resulting in a decline in revenues. Additionally, as part of the respective impairment assessment, intangible asset impairments of $0.4 million and $5 million were recorded in 2017 and 2016, respectively. On July 12, 2017, the Company completed the sale of Encore to an unrelated third party.

18.2024.


16. Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act is comprehensive legislation that includes provisions that lower the federal corporate income tax rate from 35% to 21% beginning in 2018 and impose a one-time transition tax on undistributed foreign earnings. ASC 740 “Income Taxes” generally requires the effects of the tax law change to be recorded in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin No. 118 to address situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company has recognized the tax impacts related to the transition tax on undistributed foreign earnings and the impact to deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017, on a provisional basis. The ultimate impact may differ from these provisional amounts, possibly materially, due to among other things, additional analysis, changes in interpretations and assumptions the Company has made, and additional interpretive regulatory guidance that may be issued. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018.


The components of income before income taxes and equity in (losses) earnings (losses) of unconsolidated affiliates are as follows (in millions):

follows:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021

Domestic

 

$

(495

)

 

$

(85

)

 

$

68

 

Foreign

 

 

826

 

 

 

564

 

 

 

471

 

Foreign1,3511,4081,201

 

$

331

 

 

$

479

 

 

$

539

 

$$1,459$1,363$1,128


The components of income tax expense attributable to continuing operations are as follows (in millions):

follows:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021

Current expense:

 

 

 

 

 

 

 

 

 

 

 

 

Federal and state

 

$

(3

)

 

$

64

 

 

$

51

 

Federal and state
Federal and state

Foreign

 

 

222

 

 

 

129

 

 

 

109

 

 

 

219

 

 

 

193

 

 

 

160

 

370

Deferred (benefit) expense:

 

 

 

 

 

 

 

 

 

 

 

 

Federal and state

 

 

(1,165

)

 

 

166

 

 

 

5

 

Federal and state
Federal and state

Foreign

 

 

(41

)

 

 

(14

)

 

 

(6

)

 

 

(1,206

)

 

 

152

 

 

 

(1

)

 

$

(987

)

 

$

345

 

 

$

159

 

(269)
$

As a result of the Tax Act, the Company recorded a provisional deferred tax benefit of $977 million related to the revaluation of deferred taxes at the newly enacted 21% rate and reversal of the deferred tax liability on undistributed earnings net of the newly enacted transition tax.


107

101

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The differences between the Company’s consolidated income tax expense attributable to continuing operations and the expense computed at the 35% United States statutory income tax rate of 21% were as follows (in millions):

follows:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021

Federal income tax expense at statutory rate

 

$

116

 

 

$

167

 

 

$

189

 

State and local income taxes, net of federal effect

 

 

(13

)

 

 

—

 

 

 

2

 

Research and development

 

 

(9

)

 

 

(11

)

 

 

(13

)

Foreign nontaxable interest income

 

 

(7

)

 

 

(8

)

 

 

(9

)

United States taxes recorded on foreign earnings

 

 

6

 

 

 

252

 

 

 

38

 

United States taxes recorded on foreign earnings(*)

Tax contingencies

 

 

17

 

 

 

2

 

 

 

(8

)

Foreign Derived Intangible Income (“FDII”)

Foreign rate differential

 

 

(95

)

 

 

(60

)

 

 

(49

)

Equity compensation

 

 

(19

)

 

 

—

 

 

 

—

 

Provisional Tax Act impact

 

 

(977

)

 

 

—

 

 

 

—

 

Valuation Allowance Release
Basis Difference Reversal

Other

 

 

(6

)

 

 

3

 

 

 

9

 

 

$

(987

)

 

$

345

 

 

$

159

 

$

(*) Includes impact of GILTI, and other U.S. taxes on foreign earnings.

In 2016,the year ended December 31, 2023, the Company completed an internal legal entity restructuring that resulted in a benefit of $125 million. Historically, the Company recorded deferred tax assets related to certain foreign tax credits, and a full valuation allowance in relation to these foreign tax credits was established as it was not expected the credits would be utilized prior to expiration. The Company now believes it is reasonably possible that these foreign tax credits will be utilized and therefore recorded a tax benefit of $64 million related to the valuation allowance release and establishing related uncertain tax positions. Additionally, due to the Merger,restructuring the Company reevaluated its indefinite reinvestment assertion based on the need for cashalso reversed a deferred tax liability of $61 million due to a basis difference that was recovered in a tax-free manner. The effective tax rate was also favorably impacted by a reversal of uncertain tax positions relating to tax credit carryforwards in the United States, including fundingamount of $21 million due to an audit settlement. Lastly, the Repurchase Programeffective tax rate was also impacted by changes in the geographical mix of earnings amongst foreign tax jurisdictions as well as state and potential acquisitions. Accordingly,local tax rates.

In the year ended December 31, 2022, the Company changed its assertion with respect to $2,801recorded a benefit of $6 million of foreign earnings, including $1,865 million of IMS Health’s previously undistributed historical foreign earnings. Deferred income taxes of $625 million were recorded in 2016 related to non-indefinitely reinvesteda 2021 U.S. Federal tax return position associated with FDII and GILTI tax credits. In addition, the effective tax rate was impacted by changes in the geographical mix of earnings amongst foreign earnings. Of that amount, $373tax jurisdictions as well as state and local tax rates.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Many of the provisions took effect beginning in 2023. The Company assessed the impacts and determined it was not subject to the minimum tax and there were no other material income tax impacts during 2023. The Company will continue to monitor future impacts to its consolidated financial statements.

On December 12, 2022 the European Union member states agreed to implement the Organization for Economic Co-operation and Development’s (“OECD”) Pillar 2 global corporate minimum tax rate of 15% on companies with revenues of at least $790 million, waswhich would go into effect in 2024. The Company is assessing the impact of this proposal as countries are actively considering changes to their tax laws to adopt certain parts of the OECD’s proposal.

In the year ended December 31, 2021, the Company recorded through purchase accountinga benefit of $29 million related to IMS Health’s historicala 2020 U.S. Federal tax return position associated with FDII and GILTI tax credits. Also in 2021, the Company recorded a $9 million tax expense as a result of the U.S. Treasury Department issuing final regulations on foreign earnings and the remainder of $252 million was recorded through deferred income tax expense.

credits.


Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $3,134$3,575 million atas of December 31, 2017. With the enactment of the Tax Act, the2023. The Company does not consider any of its foreign earnings as indefinitely reinvested. The Company has recorded a provisional estimate of the deferred income tax liability for the transition tax, net of foreign tax credits, of $186 million as of December 31, 2017.


102

The income tax effects of temporary differences from continuing operations that give rise to significant portions of deferred income tax assets (liabilities) are presented below (in millions):

below:

 

December 31,

 

 

2017

 

 

2016

 

December 31,December 31,
(in millions)(in millions)20232022

Deferred income tax assets:

 

 

 

 

 

 

 

 

Net operating loss and capital loss carryforwards
Net operating loss and capital loss carryforwards

Net operating loss and capital loss carryforwards

 

$

278

 

 

$

242

 

Tax credit carryforwards

 

 

170

 

 

 

267

 

Accrued expenses and unearned income

 

 

46

 

 

 

75

 

Employee benefits

 

 

189

 

 

 

273

 

Lease liability
U.S. interest expense limitation

Other

 

 

82

 

 

 

32

 

 

 

765

 

 

 

889

 

Total deferred income tax assets

Valuation allowance for deferred income tax assets

 

 

(200

)

 

 

(153

)

Total deferred income tax assets

 

 

565

 

 

 

736

 

Total deferred income tax assets (net of valuation allowance)

Deferred income tax liabilities:

 

 

 

 

 

 

 

 

Undistributed foreign earnings

 

 

(21

)

 

 

(590

)

Amortization and depreciation

 

 

(1,334

)

 

 

(2,026

)

Amortization and depreciation
Amortization and depreciation
Lease right-of-use assets
Foreign exchange on debt instruments

Other

 

 

(30

)

 

 

(164

)

Total deferred income tax liabilities

 

 

(1,385

)

 

 

(2,780

)

Net deferred income tax liabilities

 

$

(820

)

 

$

(2,044

)

Net deferred income tax assets (liabilities)


108

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Due to

During the U.S. income tax rate decreasing from 35% to 21% peryear ended December 31, 2023, the Tax Act, the Company recorded a provisional reduction to its net deferred tax liabilities decreased due to foreign exchange revaluations of $606 million, which includesdebt instruments, reversal of a $753 million reduction to deferred tax liabilities thatpreviously established valuation allowance for Foreign Tax Credits, and amortization of intangibles related to intangible amortization that was recorded through purchase accounting upon the Merger. In response to the Tax Act, the Company also reversed most of its deferred tax liability related to undistributed foreign earnings

merger between Quintiles and IMS Health.


The Company had federal, state and local, and foreign tax loss carryforwards and tax credits, the tax effect of which was $469$462 million as of December 31, 2017.2023. Of this amount, $34$8 million has an indefinite carryforward period, and the remaining $435$454 million expires at various times beginning in 2018.2024. Some of thesethe federal losses are subject to limitations under the Internal Revenue Code, however, management expects allthese losses to be utilized during the carryforward periods.


In 2017,the year ended December 31, 2023, the Company increaseddecreased its valuation allowance by $47$91 million to $200$166 million atas of December 31, 20172023 from $153$257 million atas of December 31, 2016.2022. The valuation allowance increase isdecreased primarily relateddue to an increase inthe valuerelease of the U.S. state net operating lossesvaluation allowance on branch basket foreign tax credits as a result of the U.S. federal tax rate decreasing with the Tax Act.

Company has determined they are more likely than not to be used prior to expiration.


A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below (in millions):

below:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Balance at January 1

 

$

64

 

 

$

30

 

 

$

41

 

IMS Health balance as of Merger

 

 

—

 

 

 

37

 

 

 

—

 

Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021
Balance as of January 1

Additions based on tax positions related to the current year

 

 

11

 

 

 

3

 

 

 

2

 

Additions for income tax positions of prior years

 

 

13

 

 

 

7

 

 

 

9

 

Impact of changes in exchange rates

 

 

4

 

 

 

(3

)

 

 

(1

)

Settlements with tax authorities

 

 

(2

)

 

 

—

 

 

 

—

 

Reductions for income tax positions of prior years

 

 

(2

)

 

 

(1

)

 

 

(2

)

Reductions due to the lapse of the applicable statute of limitations

 

 

(6

)

 

 

(9

)

 

 

(19

)

Balance at December 31

 

$

82

 

 

$

64

 

 

$

30

 

Balance as of December 31


103

As of December 31, 2017,2023, the Company had total gross unrecognized income tax benefits of $82$131 million associated with over 100 jurisdictions in which the Company conducts business that, if recognized, would reduce the Company’s effective income tax rate.


The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of income. In 2017, 2016the years ended December 31, 2023, 2022 and 2015,2021, the amount of interest and penalties recorded as an addition/(reduction)addition to income tax expense in the accompanying consolidated statements of income was $3$— million, $2 million and ($2)$— million, respectively. As of December 31, 20172023, and 2016,2022, the Company had accrued approximately $18$20 million and $11$21 million, respectively, of interest and penalties.


The Company believes that it is reasonably possible that a decrease of up to $10$16 million in gross unrecognized income tax benefits for federal, state and foreign exposure items may be necessary within the next 12 months due to lapse of statutes of limitations or uncertain tax positions being effectively settled. The Company believes that it is reasonably possible that a decrease of up to $1$16 million in gross unrecognized income tax benefits for foreign items may be necessary within the next 12 months due to payments. For the remaining uncertain income tax positions, it is difficult at this time to estimate the timing of the resolution.


109

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the tax years that remain open for examination by tax authorities in the most significant jurisdictions in which the Company operates:


United States

2014-2016

2020-2022

India

2006-2017

2006-2023

Japan

2012-2016

2017-2022

United Kingdom

2016

2021-2022

Switzerland

2013-2016

2019-2022


In certain of the jurisdictions noted above, the Company operates through more than one legal entity, each of which has different open years subject to examination. The table above presents the open years subject to examination for the most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can extend beyond the open years subject to examination.


Due to the geographic breadth of the Company’s operations, numerous tax audits may be ongoing throughout the world at any point in time. Income tax liabilities are recorded based on estimates of additional income taxes that may be due upon the conclusion of these audits. Estimates of these income tax liabilities are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of income tax regulations, it is possible that the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event, the Company will record additional income tax expense or income tax benefit in the period in which such resolution occurs.

The Company had a tax holiday for Quintiles East Asia Pte. Ltd. in Singapore through June 2015. The income tax benefit of this holiday was approximately $2 million in 2015. The tax holiday increased earnings per share by approximately $0.02 in 2015.


110

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

19.

17. Employee Benefit Plans


Pension and Postretirement Benefit Plans


The Company sponsors both funded and unfunded defined benefit pension plans. These plans provide benefits based on various criteria, including, but not limited to, years of service and salary. The Company also sponsors an unfunded postretirement benefit plan in the United States that provides health and prescription drug benefits to retirees who meet the eligibility requirements. The Company uses a December 31 measurement date for all pension and postretirement benefit plans.


104

The following table summarizes changes in the benefit obligation, the plan assets and the funded status of the pension benefit plans (in millions):

plans:

 

Pension Benefits

 

 

United States Plans

 

 

Non-United States Plans

 

 

December 31

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Pension BenefitsPension Benefits
United States PlansUnited States PlansNon-United States Plans
December 31,December 31,
(in millions)(in millions)2023202220232022

Obligation and funded status:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in benefit obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in benefit obligation:
Change in benefit obligation:
Change in benefit obligation:
Projected benefit obligation at beginning of year
Projected benefit obligation at beginning of year

Projected benefit obligation at beginning of year

 

$

308

 

 

$

—

 

 

$

508

 

 

$

154

 

Service costs

 

 

13

 

 

 

4

 

 

 

26

 

 

 

18

 

Interest cost

 

 

11

 

 

 

3

 

 

 

9

 

 

 

5

 

Expected return on plan assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Actuarial gains

 

 

25

 

 

 

(30

)

 

 

(2

)

 

 

(8

)

Actuarial losses

Business combinations

 

 

—

 

 

 

333

 

 

 

—

 

 

 

377

 

Benefits paid

 

 

(8

)

 

 

(2

)

 

 

(21

)

 

 

(9

)

Contributions

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

Settlements
Settlements

Settlements

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

—

 

Foreign currency fluctuations and other

 

 

—

 

 

 

—

 

 

 

42

 

 

 

(29

)

Projected benefit obligation at end of year

 

 

349

 

 

 

308

 

 

 

559

 

 

 

508

 

Change in plan assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in plan assets:
Fair value of plan assets at beginning of year
Fair value of plan assets at beginning of year

Fair value of plan assets at beginning of year

 

 

312

 

 

 

—

 

 

 

348

 

 

 

87

 

Actual return on plan assets

 

 

53

 

 

 

5

 

 

 

17

 

 

 

4

 

Contributions

 

 

3

 

 

 

1

 

 

 

21

 

 

 

9

 

Business combinations

 

 

—

 

 

 

308

 

 

 

—

 

 

 

284

 

Benefits paid

 

 

(8

)

 

 

(2

)

 

 

(21

)

 

 

(9

)

Settlements

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

—

 

Business combinations

Foreign currency fluctuations and other

 

 

—

 

 

 

—

 

 

 

30

 

 

 

(27

)

Fair value of plan assets at end of year

 

 

360

 

 

 

312

 

 

 

391

 

 

 

348

 

Funded status

 

$

11

 

 

$

4

 

 

$

(168

)

 

$

(160

)


The following table summarizes the amounts recognized in the consolidated balance sheets related to the pension benefit plans (in millions):

plans:

 

 

Pension Benefits

 

 

 

United States Plans

 

 

Non-United States Plans

 

 

 

December 31

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Deposits and other assets

 

$

55

 

 

$

45

 

 

$

15

 

 

$

13

 

Accrued expenses

 

 

2

 

 

 

1

 

 

 

8

 

 

 

9

 

Other long-term liabilities

 

 

42

 

 

 

40

 

 

 

175

 

 

 

164

 

AOCI

 

 

33

 

 

 

29

 

 

 

(3

)

 

 

(8

)

Pension Benefits
United States PlansNon-United States Plans
December 31,
(in millions)2023202220232022
Deposits and other assets, net$87$56$49 $50 
Accounts payable and accrued expenses$4$4$12 $10 
Other liabilities$31$33$183$146 
Accumulated other comprehensive loss$28$(2)$(25)$(6)


111

As of December 31, 2023, the benefit obligation and amount recognized in AOCI for other postretirement benefits were immaterial.

105

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The following table summarizes the accumulated benefit obligation for all pension benefit plans (in millions):

plans:

 

 

Pension Benefits

 

 

 

United States Plans

 

 

Non-United States Plans

 

 

 

December 31

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Accumulated benefit obligation

 

$

343

 

 

$

303

 

 

$

507

 

 

$

469

 

Pension Benefits
United States PlansNon-United States Plans
December 31,
(in millions)2023202220232022
Accumulated benefit obligation$430 $397 $480$426 

At December 31, 2017, the benefit obligation for other postretirement benefits was $3 million, with $1 million recorded in accrued expenses and $2 million included within other long-term liabilities.


The following table provides the information for pension plans with an accumulated benefit obligation in excess of plan assets and projected benefit obligations in excess of plan assets (in millions):

assets:

 

Pension Benefits

 

 

United States Plans

 

 

Non-United States Plans

 

 

December 31

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Pension BenefitsPension Benefits
United States PlansUnited States PlansNon-United States Plans
December 31,December 31,
(in millions)(in millions)2023202220232022

Plans with accumulated benefit obligation in excess of plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated benefit obligation
Accumulated benefit obligation

Accumulated benefit obligation

 

$

45

 

 

$

43

 

 

$

442

 

 

$

409

 

Fair value of plan assets

 

 

3

 

 

 

2

 

 

 

301

 

 

 

271

 

Plans with projected benefit obligation in excess of plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projected benefit obligation

 

$

46

 

 

$

44

 

 

$

492

 

 

$

444

 

Projected benefit obligation
Projected benefit obligation$41 $43 $295 $243

Fair value of plan assets

 

 

3

 

 

 

2

 

 

 

309

 

 

 

271

 

Fair value of plan assets$7 $$6 $$101 $$87


The components of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive lossincome were as follows (in millions):

follows:

 

Pension Benefits

 

 

United States Plans

 

 

Non-United States Plans

 

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2015

 

Pension BenefitsPension Benefits
United States PlansUnited States PlansNon-United States Plans
Year Ended December 31,Year Ended December 31,
(in millions)(in millions)202320222021202320222021

Service cost

 

$

13

 

 

$

4

 

 

$

26

 

 

$

18

 

 

$

15

 

Service cost$10 $$13 $$14 $$35 $$29 $$29

Interest cost

 

 

11

 

 

 

3

 

 

 

9

 

 

 

5

 

 

 

3

 

Expected return on plan assets

 

 

(24

)

 

 

(6

)

 

 

(14

)

 

 

(6

)

 

 

(3

)

Amortization of actuarial losses

 

 

—

 

 

 

—

 

 

 

1

 

 

 

1

 

 

 

1

 

Settlement gain
Settlement gain
Settlement gain

Net periodic benefit cost

 

 

—

 

 

 

1

 

 

 

22

 

 

 

18

 

 

 

16

 

Other changes in plan assets and benefit obligations

recognized in other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial loss (gain) – current years

 

 

(4

)

 

 

(29

)

 

 

(4

)

 

 

(5

)

 

 

—

 

Amortization of actuarial losses

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

(1

)

 

 

(1

)

Actuarial (gain) loss – current year
Actuarial (gain) loss – current year
Actuarial (gain) loss – current year
Prior service cost – current year

Total recognized in other comprehensive income

 

 

(4

)

 

 

(29

)

 

 

(5

)

 

 

(6

)

 

 

(1

)

Total recognized in net periodic benefit cost and other

comprehensive loss

 

$

(4

)

 

$

(28

)

 

$

17

 

 

$

12

 

 

$

15

 

Total recognized in other comprehensive income
Total recognized in other comprehensive income
Total recognized in net periodic benefit cost and other comprehensive income


112

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The components of other changes in plan assets and benefit obligations recognized in other comprehensive loss related to the other postretirement benefits plan are de minimis. In addition, the amounts in AOCI that are expected to be recognized as

All components of net periodic benefit cost (credit) during 2018other than service cost are recorded in other (income) expense, net on the accompanying consolidated statements of income. Gains (losses) affecting the benefit obligation for pension andthe year ending December 31, 2023 were primarily related to the changes in discount rates, as well as changes in other postretirement benefit plansactuarial assumptions which are de minimis.

driven by changing market conditions.


106

Assumptions


The weighted average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31:

 

 

Pension Benefits

 

 

Other Postretirement Benefits

 

 

 

United States Plans

 

 

Non-United States Plans

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

Discount rate

 

 

4.17

%

 

 

3.62

%

 

 

1.89

%

 

 

1.88

%

 

 

2.46

%

 

 

2.90

%

 

 

2.40

%

Rate of compensation

    increases

 

 

3.00

%

 

 

3.00

%

 

 

5.17

%

 

 

5.27

%

 

 

4.32

%

 

 

—

 

 

 

—

 

Expected return on

   plan assets

 

 

7.94

%

 

 

7.94

%

 

 

4.16

%

 

 

4.26

%

 

 

4.05

%

 

 

—

 

 

 

—

 

Pension Benefits
United States PlansNon-United States Plans
202320222021202320222021
Discount rate5.65 %3.08 %2.84 %3.59 %1.46 %1.00 %
Rate of compensation increases3.00 %3.00 %3.00 %2.93 %2.57 %2.55 %
Expected return on plan assets7.20 %7.23 %7.23 %4.53 %4.22 %3.92 %


The weighted average assumptions used to determine benefit obligations were as follows atas of December 31:

 

Pension Benefits

 

 

Other Postretirement Benefits

 

 

United States Plans

 

 

Non-United States Plans

 

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Pension Benefits
Pension Benefits
Pension Benefits
United States Plans
United States Plans
United States Plans
2023
2023
2023
Discount rate
Discount rate

Discount rate

 

 

3.69

%

 

 

4.17

%

 

 

1.90

%

 

 

1.68

%

 

 

2.90

%

 

 

2.90

%

Rate of compensation

increases

 

 

3.00

%

 

 

3.00

%

 

 

4.54

%

 

 

5.17

%

 

 

—

 

 

 

—

 

Rate of compensation increases
Rate of compensation increases


The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to be required to settle the Company’s defined benefit plan obligations. The discount rates are derived using weighted average yield curves on AA-rated corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates. At December 31, 2017, the discount rate ranged from 2.90% to 3.73% for the Company’s United States pension plan and postretirement benefit plan. At December 31, 2017, the discount rate ranged from 2.22% to 2.53% for the Company’s United Kingdom pension plans. The United States and United Kingdom plans represent approximately 76% of the consolidated benefit obligation as of December 31, 2017. The discount rates in other non-U.S. countries ranged from 0.40% to 11.60% at December 31, 2017.


The Company’s assumption for the expected return on plan assets was determined by the weighted average of the long-term expected rate of return on each of the asset classes invested as of the balance sheet date. For plan assets invested in government bonds, the expected return was based on the yields on the relevant indices as of the balance sheet date. There is considerable uncertainty for the expected return on plan assets invested in equity and diversified growth funds. The expected rate of return on plan assets for the United States pension plans was 7.75% at January 1, 2018. Outside the United States, the range of applicable expected rates of return was 1.0% to 6.46% as of January 1, 2018, compared to 0.8% to 9.0% as of January 1, 2017. The expected return on assets (“EROA”) was $38 million and $13 million and the actual return on assets was $70 million and $10 million for the years ended December 31, 2017 and 2016, respectively.


113

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Under the Company’s United States qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is converted to a monthly retirement benefit.

At December 31, 2017, the Company’s health care cost trend rate for the next seven years was assumed to be 6.5% and the assumed ultimate cost trend rate was 5%. The Company assumed that ultimate cost trend rate is reached in 2021.

Assumed health care cost trend rates could have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates at December 31, 2017 would have a de minimis effect on the total of service and interest cost and on the accumulated postretirement benefit obligation.


Plan Assets


The Company’s pension plan target asset allocations and weighted average asset allocations, by asset category, were as follows:

 

Plan Assets at December 31,

 

 

United States Plans

 

 

Non-United States Plans

 

 

Total

 

Plan Assets as of December 31,Plan Assets as of December 31,
TargetTargetUnited States PlansNon-United States PlansTotal

Asset Category

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Asset CategoryAllocation202320222023202220232022

Equity securities

 

 

69.86

%

 

 

70.09

%

 

 

47.92

%

 

 

46.09

%

 

 

58.44

%

 

 

57.43

%

Equity securities40-65%73 %71 %— %27 %42 %51 %

Debt securities

 

 

25.21

 

 

 

24.94

 

 

 

14.65

 

 

 

14.42

 

 

 

19.71

 

 

 

19.39

 

Real estate

 

 

4.93

 

 

 

4.97

 

 

 

—

 

 

 

—

 

 

 

2.36

 

 

 

2.35

 

Other

 

 

—

 

 

 

—

 

 

 

37.43

 

 

 

39.49

 

 

 

19.49

 

 

 

20.83

 

Total

 

 

100.00

%

 

 

100.00

%

 

 

100.00

%

 

 

100.00

%

 

 

100.00

%

 

 

100.00

%

Total100 %100 %100 %100 %100 %100 %

The target asset allocation for the Company’s pension plans were as follows:

Asset Category

United States

Plans

Non-United

States Plans

Total

Equity securities

60-80%

35-50%

45-65%

Debt securities

20-30%

10-20%

10-30%

Real estate

0-10%

—%

0-5%

Other

—%

30-45%

10-30%


107

The following table summarizes United States plan assets measured at fair value (in millions):

value:

 

December 31, 2017

 

 

December 31, 2016

 

December 31, 2023December 31, 2023December 31, 2022

Asset Category

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Asset CategoryLevel 1Level 2TotalLevel 1Level 2Total
(in millions)(in millions)

Domestic equities

 

$

37

 

 

$

—

 

 

$

37

 

 

$

32

 

 

$

—

 

 

$

32

 

International equities

 

 

23

 

 

 

—

 

 

 

23

 

 

 

20

 

 

 

—

 

 

 

20

 

Corporate bonds

 

 

53

 

 

 

—

 

 

 

53

 

 

 

46

 

 

 

—

 

 

 

46

 

Real estate

 

 

18

 

 

 

—

 

 

 

18

 

 

 

15

 

 

 

—

 

 

 

15

 

Total assets in the fair value hierarchy

 

 

131

 

 

 

—

 

 

 

131

 

 

 

113

 

 

 

—

 

 

 

113

 

Common/collective trusts measured at net asset value

(“NAV”)(1)

 

 

—

 

 

 

—

 

 

 

229

 

 

 

—

 

 

 

—

 

 

 

199

 

Assets measured at net asset value (“NAV”)(1)

Total

 

$

131

 

 

$

—

 

 

$

360

 

 

$

113

 

 

$

—

 

 

$

312

 

114

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The following table summarizes non-United States plan assets measured at fair value:

December 31, 2023December 31, 2022
Asset CategoryLevel 1Level 2TotalLevel 1Level 2Total
(in millions)
International equities$1 $1 $2 $— $4 $4 
Debt issued by national, state or local government2 210 212 3 103 106 
Investments funds— 10 10 — 10 10 
Insurance contracts— 145 145 — 133 133 
Other3 7 10 3 6 9 
Total assets in the fair value hierarchy6 373 379 6 256 262 
Assets measured at NAV(1)
— — — — — 93 
Total$6 $373 $379 $6 $256 $355 
(1) Certain investments that are measured at fair value (in millions):

 

 

December 31, 2017

 

 

December 31, 2016

 

Asset Category

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

International equities

 

$

—

 

 

$

66

 

 

$

66

 

 

$

—

 

 

$

57

 

 

$

57

 

Debt issued by national, state or local government

 

 

2

 

 

 

55

 

 

 

57

 

 

 

2

 

 

 

48

 

 

 

50

 

Diversified growth fund

 

 

—

 

 

 

17

 

 

 

17

 

 

 

—

 

 

 

14

 

 

 

14

 

Investments funds

 

 

—

 

 

 

7

 

 

 

7

 

 

 

—

 

 

 

7

 

 

 

7

 

Insurance contracts

 

 

—

 

 

 

141

 

 

 

141

 

 

 

—

 

 

 

133

 

 

 

133

 

Other

 

 

—

 

 

 

7

 

 

 

7

 

 

 

—

 

 

 

6

 

 

 

6

 

Total assets in the fair value hierarchy

 

 

2

 

 

 

293

 

 

 

295

 

 

 

2

 

 

 

265

 

 

 

267

 

Assets measured at NAV(1)

 

 

—

 

 

 

—

 

 

 

96

 

 

 

—

 

 

 

—

 

 

 

81

 

Total

 

$

2

 

 

$

293

 

 

$

391

 

 

$

2

 

 

$

265

 

 

$

348

 

using the net asset value ("NAV") per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above plan asset tables are intended to permit reconciliation of the fair value of plan assets in the fair value hierarchy to the plan asset amounts presented in the above funded status table as of December 31, 2023 and 2022.

(1)

Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above plan asset tables are intended to permit reconciliation of the fair value of plan assets in the fair value hierarchy to the plan asset amounts presented in the above funded status table as of December 31, 2017 and 2016.


Investments in mutual funds are valued at quoted market prices. Investments in common/collective trusts and pooled funds are valued at the NAV as reported by the trust. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. Insurance contracts are valued at the amount of the benefit liability. The Company has no Level 3 assets that rely on unobservable inputs to measure fair value.


Investment Policies and Strategies


The Company invests primarily in a diversified portfolio of equitydebt and debtequity securities that provide for long-term growth within reasonable and prudent levels of risk. The asset allocation targets established by the Company are strategic and applicable to the plan’s long-term investing horizon. The portfolio is constructed and maintained to provide adequate liquidity to meet associated liabilities and minimize long-term expense and provide prudent diversification among asset classes in accordance with the principles of modern portfolio theory. The plan employs a diversified mix of actively managed investments around a core of passively managed index exposures in each asset class. Within each asset class, rapid market shifts, changes in economic conditions or an individual fund manager’s outlook may cause the asset allocation to fall outside the prescribed targets. The majority of the Company’s plan assets are measured quarterly against benchmarks established by the Company’s investment advisors and the Company’s Asset Management Committee, who review actual plan performance and have the authority to recommend changes as deemed appropriate. Assets are rebalanced periodically to their strategic targets to maintain the plan’s strategic risk/reward characteristics. The Company periodically conducts asset liability modeling studies to ensure that the investment strategy is aligned with the obligations of the plans and that the assets will generate income and capital growth to meet the cost of current and future benefits that the plans provide. The pension plans do not have investments in Company stock atas of December 31, 2017 or 2016.

2023 and 2022.

108

The portfolio for the Company’s United Kingdom pension plans seek to invest in a range of suitable assets of appropriate liquidity that will generate in the most effective manner possible, income and capital growth to ensure that there are sufficient assets to meet benefit payments when they fall due, while controlling the long-term costs of the plans, and avoiding short-term volatility of investment returns.returns, and managing risks in accordance with plan investment strategies. The plans seek to achieve these objectives by investing in a mixture of real (equities) and monetary (fixed interest) assets. It recognizes that the returns on real assets, whilewhich is expected to be greater over the long-term than those on monetary assets, are likely to be more volatile. A mixture across asset classes should nevertheless provide the level of returns required by the plans. The trustee periodically conducts asset liability modeling exercises to ensure the investments are aligned with the appropriate benchmark to better reflect the plans’ liabilities. The trustee also undertakes to review this benchmark on a regular basis.

115

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Cash Flows


Contributions


The Company expects to contribute approximately $22$31 million in required contributions to its pension and postretirement benefit plans during 2018.2024. The Company may make additional contributions into its pension plans in 20182024 depending on, among other factors, how the funded status of those plans change or in order to meet minimum funding requirements as set forth in employee benefit and tax laws, plus additional amounts the Company may deem to be appropriate.


Estimated future benefit payments and subsidy receipts


The following benefit payments (net of expected participant contributions) for pension benefits are expected to be paid as follows (in millions):

follows:

 

 

Pension Benefits

 

2018

 

$

29

 

2019

 

 

30

 

2020

 

 

32

 

2021

 

 

35

 

2022

 

 

37

 

Years 2023 through 2027

 

 

218

 

 

 

$

381

 

(in millions)
2024$48 
202550 
202653 
202756 
202858 
Years 2029 through 2033325 
$590 


Benefit payments (net of expected participant contributions) for other postretirement benefits are expected to be de minimisimmaterial over the periodsyears presented.


Defined Contribution Plans


Defined contribution or profit sharing plans are offered in Australia, Austria, Belgium, Bulgaria, Canada,various countries in which the Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Japan, Malaysia, the Netherlands, New Zealand, Poland, Slovakia, South Africa, Sweden, Switzerland, Taiwan, Thailand, the United States and the United Kingdom.Company operates. In some cases, these plans are required by local laws or regulations.


In the United States, the Company has a 401(k) plansplan under which the Company matches employee deferrals at varying percentages and specified limits of the employee’s salary. In 2017, 2016For the years ended December 31, 2023, 2022 and 2015,2021, the Company expensed $47$81 million, $39$74 million and $36$60 million, respectively, related to matching contributions.


Certain key executives of the Company participate in an unfunded defined contribution executive retirement plan, assumed in the Merger,merger between Quintiles and IMS Health, which was frozen to additional accruals for future service contributions in 2012. Participants continue to receive an annual investment credit based on the average of the annual yields at the end of each month on the AA-AAA rated 10 plus year maturity component of the Merrill Lynch United States Corporate Bond Master Index.


Plans Accounted for as Postretirement Benefits


The Company provides certain executives with postretirement medical, dental and life insurance benefits. These benefits are individually negotiated arrangements in accordance with their individual employment arrangements. The above tables do not include the Company’s expense or obligation associated with providing these benefits. The obligation related to these benefits was approximately $12 million for the year endedas of December 31, 2017,2023 and 2022, and the Company’s expense for the yearyears then ended, was de minimis.were not material.

116

109

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


Stock Incentive Plans


Stock incentive plans provide incentives to eligible employees, officers and directors in the form of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted stock awards, (“RSAs”), restricted stock units (“RSUs”), performance awards, covered annual incentive awards, cash-based awards and other stock-based awards, in each case subject to the terms of the stock incentive plans.


In April 2017, the Company’s 2017 Incentive and Stock Award Plan (the “2017 Plan”) was approved by the Company’s stockholders. The 2017 Plan consolidates the unused share pools under the Company’s 2014 Incentive and Stock Award Plan (the “2014 Plan”), the Company’s 2013 Stock Incentive Plan (the “2013 Plan”), the Company’s 2010 Equity Incentive Plan (the “2010 Plan”) and the Company’s 2008 Stock Incentive Plan (the “2008 Plan”), and together with the 2010 Plan, the 2013 Plan and the 2014 Plan, the “Prior Plans,” and makes shares underlying outstanding awards granted under (but not ultimately delivered) the Prior Plans eligible for use in connection with new awards under the 2017 Plan. The 2017 Plan provides for the grant of stock options, SARs, restricted and deferred stock (including RSUs), performance awards, dividend equivalents, other stock-based awards and cash-based awards.

The fair value of stock options and SARs is estimated using the Black-Scholes-Merton option-pricing model. The fair value of restricted stock and RSUs is based on the closing market price of the Company’s common stock on the date of grant. The fair value of the performance shares is determined separately for the portion of the award based on compound annual earnings per share (“EPS”) growth and the portion of the award based on relative total shareholder return (“TSR”). The fair value of the compound annual EPS growth portion of the award is equal to the closing market price of the Company’s common stock on the date of grant. The fair value of the TSR portion of the award is determined based on a Monte Carlo simulation model.


The Company recognized stock-based compensation expense of $106$217 million, $80$194 million and $38$170 million in 2017, 2016the years ended December 31, 2023, 2022 and 2015,2021, respectively. Stock-based compensation expense is included in selling, general and administrative expenses on the accompanying consolidated statements of income. The associated future income tax benefit recognized was $21$34 million, $24$28 million and $9$26 million in 2017, 2016the years ended December 31, 2023, 2022 and 2015,2021, respectively. As of December 31, 2017,2023, there was approximately $103$194 million of total unrecognized stock-based compensation expense related to outstanding non-vested stock-based compensation arrangements, which the Company expects to recognize over a weighted average period of 1.161.30 years.


As of December 31, 2017,2023, there were 13.48.5 million shares available for future grants under all of the Company’s stock incentive plans.


The Company used the following assumptions when estimating the value of the stock-based compensation for stock options andStock Settled SARs issuedgranted as follows:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,
202320222021

Expected volatility

 

22 – 25%

 

 

20 – 30%

 

 

26 – 41%

 

Expected volatility29 – 35%28 – 34%27 – 31%

Weighted average expected volatility

 

24%

 

 

28%

 

 

34%

 

Weighted average expected volatility32%30%29%

Expected dividends

 

 

0.0%

 

 

 

0.0%

 

 

 

0.0%

 

Expected dividends0.0%0.0%0.0%

Expected term (in years)

 

1.0 – 6.9

 

 

0.3 – 6.6

 

 

3.7 – 6.7

 

Expected term (in years)2.4 – 5.43.3 – 6.33.6 – 6.6

Risk-free interest rate

 

1.16 – 2.32%

 

 

0.32 – 2.19%

 

 

1.06 – 2.04%

 

Risk-free interest rate3.38 – 4.75%1.84 –4.22%0.28 – 1.40%


117

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Stock Options

The option price is determined by the Board at the date of grant and the options expire 10 years from the date of grant. The vesting schedule for options granted to employees is either (i) 25% per year beginning on the first anniversary of the date of grant; or (ii) 33% on the third anniversary of the date of grant and 67% on the fourth anniversary of the date of grant.

The Company’s stock option activity in 2017 is as follows (in millions, except number of options and exercise price):

 

 

Number of

Options

 

 

Weighted

Average

Exercise Price

 

 

Aggregate

Intrinsic Value

 

Outstanding at December 31, 2016

 

 

7,251,339

 

 

$

34.83

 

 

$

299

 

Exercised

 

 

(2,957,816

)

 

 

34.43

 

 

 

 

 

Canceled

 

 

(212,891

)

 

 

57.03

 

 

 

 

 

Outstanding at December 31, 2017

 

 

4,080,632

 

 

$

33.97

 

 

$

261

 

The weighted average fair value per share of the options granted in 2016 and 2015 was $17.91 and $21.96, respectively. The total intrinsic value of options exercised was approximately $157 million, $155 million and $144 million in 2017, 2016 and 2015, respectively. The Company received cash of approximately $102 million, $101 million and $59 million in 2017, 2016 and 2015, respectively, from options exercised.

Selected information regarding the Company’s stock options as of December 31, 2017 is as follows:

Options Outstanding

 

 

Options Exercisable

 

Number of

Options

 

 

Exercise Price Range

 

 

Weighted

Average

Exercise Price

 

 

Weighted

Average

Remaining

Life

(in Years)

 

 

Number of

Options

 

 

Weighted

Average

Exercise Price

 

 

827,775

 

 

$

8.34

 

 

 

—

 

 

$

18.23

 

 

$

11.15

 

 

 

2.54

 

 

 

827,775

 

 

$

11.15

 

 

1,219,780

 

 

 

18.40

 

 

 

—

 

 

 

26.05

 

 

 

24.21

 

 

 

3.09

 

 

 

1,219,780

 

 

 

24.21

 

 

823,189

 

 

 

28.13

 

 

 

—

 

 

 

42.74

 

 

 

33.07

 

 

 

4.59

 

 

 

751,032

 

 

 

33.52

 

 

839,003

 

 

 

44.45

 

 

 

—

 

 

 

64.67

 

 

 

57.72

 

 

 

6.99

 

 

 

431,827

 

 

 

56.09

 

 

370,885

 

 

$

64.86

 

 

 

—

 

 

$

77.11

 

 

$

65.28

 

 

 

7.12

 

 

 

172,635

 

 

$

65.31

 

The weighted average remaining contractual life of the options outstanding and exercisable as of December 31, 2017 is 4.5 years and 3.9 years, respectively. The total aggregate intrinsic value of the exercisable stock options and the stock options expected to vest as of December 31, 2017 was approximately $260 million.

Stock Appreciation Rights – Stock Settled


The exercise price of the stock-settled SARs (“SSRs”) is equal to the closing market price of the Company’s common stock as of the grant date and expire on the tenth anniversary of the date of grant. The SSRs are eligible to vest either (i) in equal increments of 25% on each of the first four anniversaries of the date of grant or (ii) in three equal annual installments on each of the first three anniversaries of the date of grant.

118

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


The Company’s SSR activity in 2017the year ended December 31, 2023 is as follows (in millions, except number of SSRs and exercise price):

follows:

 

Number of

Options

 

 

Weighted

Average

Exercise Price

 

 

Aggregate

Intrinsic Value

 

Outstanding at December 31, 2016

 

 

1,313,322

 

 

$

62.13

 

 

$

18

 

(in millions, except number of SSRs and exercise price)(in millions, except number of SSRs and exercise price)Number of SSRsWeighted Average Exercise PriceAggregate Intrinsic Value
Outstanding as of December 31, 2022

Granted

 

 

1,971,768

 

 

 

78.96

 

 

 

 

 

Exercised

 

 

(123,342

)

 

 

63.24

 

 

 

 

 

Exercised
Exercised

Canceled

 

 

(236,978

)

 

 

74.00

 

 

 

 

 

Outstanding at December 31, 2017

 

 

2,924,770

 

 

$

72.47

 

 

$

74

 

Canceled
Canceled
Outstanding as of December 31, 2023
Outstanding as of December 31, 2023
Outstanding as of December 31, 2023


The total intrinsic value of SSRs exercised was approximately $2.9$51 million, $25 million and $81 million in 2017.

the years ended December 31, 2023, 2022 and 2021 respectively.


The weighted average remaining contractual life of the SSRs outstanding and exercisable as of December 31, 20172023 is 8.55.4 years and 6.84.6 years, respectively. The total aggregate intrinsic value of the exercisable SSRs and the SSRs expected to vest as of December 31, 20172023 was approximately $72$342 million.

110

Stock Options

The option price is determined by the Board at the date of grant and the options expire 10 years from the date of grant. All outstanding stock options are fully vested.

The Company’s stock option activity in the year ended December 31, 2023 is as follows:
(in millions, except number of options and exercise price)Number of OptionsWeighted Average Exercise PriceAggregate Intrinsic Value
Outstanding as of December 31, 2022320,353 $54.99 $48 
Exercised(145,382)46.13 
Outstanding as of December 31, 2023174,971 $62.35 $30 

The total intrinsic value of options exercised was approximately $23 million, $9 million and $29 million in the years ended December 31, 2023, 2022 and 2021, respectively. The Company received cash of approximately $7 million, $2 million and $7 million in 2023, 2022, and 2021, respectively, from options exercised.

The weighted average remaining contractual life of the options outstanding and exercisable as of December 31, 2023 is 1.5 years. The total aggregate intrinsic value of the exercisable stock options as of December 31, 2023 was approximately $30 million.

Performance Awards

The Company awarded performance awards that contain service, performance-based and/or market-based vesting criteria. Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the three-year performance period (as defined in the award agreements).

The Company’s performance award activity in the year ended December 31, 2023 is as follows:
Number of Performance AwardsWeighted Average Grant-Date Fair Value
Outstanding as of December 31, 2022642,701$216.00 
Granted359,588229.88 
Additional goal achievement shares176,329169.76 
Vested(380,386)173.74 
Canceled(52,162)232.93 
Outstanding as of December 31, 2023746,070$232.13 

As of December 31, 2023, there are 746,070 performance awards outstanding with an intrinsic value of approximately $173 million.

Restricted Stock Units – Stock Settled

The Company’s RSUs will settle in shares of the Company’s common stock within 45 days of the applicable vesting date. In general, RSUs granted to employees vest either (i) one-third per year beginning on the first anniversary of the grant date or (ii) 100% at the end of the three-year period following the grant date. Members of the Company’s Board receive RSUs that are fully vested when granted.

111

The Company’s RSU activity in the year ended December 31, 2023 is as follows:


Number of RSUs		Weighted Average Grant-Date
Fair Value
Outstanding as of December 31, 2022896,733 $215.16 
Granted (1)
443,009 227.84 
Vested(379,871)197.56 
Canceled(71,015)220.79 
Outstanding as of December 31, 2023888,856 $228.55 
(1) Pursuant to the IQVIA Holdings Inc. Non-Employee Director Deferral Plan (the “Director Deferral Plan”), non-employee directors may elect to defer receipt of their cash retainers. If a director elects to defer his or her retainer, he or she will instead be credited with that value in deferred shares under the Director Deferral Plan. Deferred shares become payable in Company common stock following a termination of the director’s Board service or the director’s death, or upon a change in control of the Company. The Company granted 1,782 deferred RSUs in 2023.

As of December 31, 2023, there are 888,856 RSUs outstanding with an intrinsic value of approximately $206 million.

Stock Appreciation Rights – Cash Settled


The Company’s cash settled SARs (“CSRs”) require the Company to settle in cash an amount equal to the difference between the fair value of the Company’s common stock on the date of exercise and the grant price, multiplied by the number of CSRs being exercised. These awards either (i) vest 25% per year or (ii) vest 33% on the third anniversary of the date of grant and 67% on the fourth anniversary of the date of grant; or (iii) one-third per year beginning on the first anniversary of the date of grant.

The Company’s CSR activity in 2017 is as follows (in millions, except number ofAll outstanding CSRs and grant price):

are fully vested.

 

 

Number of CSRs

 

 

Weighted

Average

Grant Price

 

 

Aggregate

Intrinsic Value

 

Outstanding at December 31, 2016

 

 

479,176

 

 

$

52.42

 

 

$

11

 

Granted

 

 

15,227

 

 

 

78.21

 

 

 

 

 

Exercised

 

 

(117,813

)

 

 

50.26

 

 

 

 

 

Canceled

 

 

(39,475

)

 

 

56.52

 

 

 

 

 

Outstanding at December 31, 2017

 

 

337,115

 

 

$

53.87

 

 

$

15

 


As of December 31, 2017, 20162023, 2022 and 2015,2021, the weighted average fair value per share of the CSRs grantedoutstanding was $52.53, $34.25$152.17, $147.41 and $29.79,$216.87, respectively. The Company paid approximately $4$11 million, $2$1 million and $1 million to settle exercised CSRs in 2017, 2016the years ended December 31, 2023, 2022 and 2015,2021 respectively.


The weighted average remaining contractual life of the CSRs outstanding and exercisable as of December 31, 20172023 is 6.5 years and 5.9 years, respectively.3.1 years. The total aggregate intrinsic value of the exercisable CSRs and the CSRs expected to vest as of December 31, 20172023 was approximately $15$8 million.

Restricted Stock Units – Stock Settled

The Company’s RSUs will settle in shares of the Company’s common stock within 45 days of the applicable vesting date. RSUs granted to employees vest either (i) 25% per year beginning on the first anniversary of the date of grant; (ii) one-third per year beginning on the first anniversary of the grant date; (iii) 33% on the third anniversary of the date of grant and 67% on the fourth anniversary of the date of grant or (iv) 100% at the end of the three-year period following the grant date. Members of the Company’s board of directors receive RSUs that are fully vested when granted.  


119

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

The Company’s RSU activity in 2017 is as follows:

 

 

Number of RSUs

 

 

Weighted

Average Grant-Date

Fair Value

 

Outstanding at December 31, 2016

 

 

1,720,817

 

 

$

74.40

 

Granted

 

 

57,699

 

 

 

97.03

 

Vested

 

 

(563,435

)

 

 

72.90

 

Canceled

 

 

(117,373

)

 

 

71.11

 

Outstanding at December 31, 2017

 

 

1,097,708

 

 

$

76.71

 

As of December 31, 2017, there are 1.1 million RSUs outstanding with an intrinsic value of approximately $107 million.

Restricted Stock Units – Cash Settled


The Company’s cash settled RSUs (“Cash RSUs”) require the Company to settle in cash an amount equal to the fair value of the Company’s common stock on the vest date multiplied by the number of vested Cash RSUs. These awards vest either (i) 100% at the end of the three-year period following the date of grant.

The Company’s Cash RSU activity in 2017 is as follows:

 

 

Number of

Cash RSUs

 

 

Weighted

Average Grant-Date

Fair Value

 

Outstanding at December 31, 2016

 

 

—

 

 

$

—

 

Granted

 

 

9,015

 

 

 

95.98

 

Outstanding at December 31, 2017

 

 

9,015

 

 

$

95.98

 

grant, or (ii) one-third per year beginning on the first grant date anniversary. As of December 31, 2017,2023, there are 9,0155,326 Cash RSUs outstanding with an intrinsic value of approximately $0.9$1 million.

Restricted


Long Term Incentive Awards - Stock Awards

Restricted stockSettled


During the year ended December 31, 2022, the Company entered into long term incentive award agreements with certain employees totaling a fixed monetary amount of $80 million to issue a variable number of common shares based on the fair market value when the awards (“RSAs”) vest either (i) in equal increments of 50% on each of the second and fourth anniversariesthird anniversary of the grant date; (ii) one-third per year beginning ondate. The Company accounts for the first anniversaryawards as liability-classified awards with the liability recorded in other liabilities in the consolidated balance sheets. The Company recorded approximately $22 million and $9 million of stock-based compensation expense for these awards during the date of grant; or (iii) 25% on each of the second and third anniversaries of the grant date and 50% on the fourth anniversary of the date of grant.

The Company’s RSA activity in 2017 is as follows:

 

 

Number of RSAs

 

 

Weighted

Average Grant-Date

Fair Value

 

Outstanding at December 31, 2016

 

 

367,053

 

 

$

80.20

 

Granted

 

 

254,582

 

 

 

78.21

 

Vested

 

 

(181,484

)

 

 

80.20

 

Outstanding at December 31, 2017

 

 

440,151

 

 

$

79.05

 

As ofyears ended December 31, 2017, there are 440,151 RSAs outstanding with an intrinsic value of approximately $43 million.

120

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Performance Awards

The Company awarded performance awards that contain both service2023 and performance based vesting criteria. Vesting occurs if the recipient remains employed and depends on the degree to which the Company achieves certain compound annual EPS growth and relative TSR goals during a three-year performance period (as defined in the award agreements).

The Company’s performance award activity in 2017 is as follows:

 

 

Number of Performance Awards

 

 

Weighted

Average Grant-Date

Fair Value

 

Outstanding at December 31, 2016

 

 

—

 

 

$

—

 

Granted

 

 

519,206

 

 

 

85.76

 

Canceled

 

 

(42,874

)

 

 

84.90

 

Outstanding at December 31, 2017

 

 

476,332

 

 

$

85.84

 

As of December 31, 2017, there are 476,332 performance awards outstanding with an intrinsic value of approximately $47 million.

Employee Stock Purchase Plan

Prior to December 31, 2016, the Company sponsored an Employee Stock Purchase Plan (“ESPP”) that allowed eligible employees to authorize payroll deductions of up to 10% of their base salary to be applied toward the purchase of full shares of the Company’s common stock on the last day of the offering period. During 2016 and 2015, the Company issued 0.1 million shares of common stock for purchases under the ESPP. Effective as of December 31, 2016, the ESPP was discontinued and participant contributions under the ESPP ceased. The final purchase of shares under the ESPP occurred on December 31, 2016.

2022, respectively.


Other


The Company sponsors a supplemental non-qualified deferred compensation plan, covering certain management employees, and maintains other statutory indemnity plans as required by local laws or regulations.

20.


112

18. Related Party Transactions

During 2017, 2016 and 2015, the Company entered into a number of contracts with HUYA Bioscience International, LLC, primarily in Asia, in which the Company will provide up to approximately $5 million, $(8 million) net cancellations and $32 million, respectively, of services on a fee for services basis at arm’s length and at market rates. In 2017, 2016 and 2015, the Company recognized revenue of approximately $8 million, $6 million and $7 million, respectively, for services under these agreements.


The Company has entered into other transactions with related parties that are not deemed to be material, including investments in and advances to unconsolidated affiliates that are discussed in Note 4.

121

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

21. Operations


19. Property, Equipment and Software by Geographic Location

Geography


The following table below presentsrepresents the Company’s operationsproperty, equipment and software, net, by geographical location. The Company attributes revenues to geographical locations based upon where the services are performed. The Company’s operations within each geographicalgeographic region, arewhich is further broken down to show each country that accounts for 10% or more of the totals (in millions):

totals:

 

Year Ended December 31,

 

 

2017

 

 

2016

 

 

2015

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

December 31,December 31,
(in millions)(in millions)20232022
Property, equipment and software, net:

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

Americas:
Americas:
United States
United States

United States

 

$

3,282

 

 

$

2,145

 

 

$

1,788

 

Other

 

 

325

 

 

 

233

 

 

 

185

 

Americas

 

 

3,607

 

 

 

2,378

 

 

 

1,973

 

Europe and Africa:

 

 

 

 

 

 

 

 

 

 

 

 

United Kingdom

 

 

586

 

 

 

461

 

 

 

410

 

Other

 

 

2,532

 

 

 

1,594

 

 

 

1,237

 

Europe and Africa

 

 

3,118

 

 

 

2,055

 

 

 

1,647

 

Asia-Pacific:

 

 

 

 

 

 

 

 

 

 

 

 

Japan

 

 

763

 

 

 

587

 

 

 

443

 

Other

 

 

572

 

 

 

344

 

 

 

263

 

Asia-Pacific

 

 

1,335

 

 

 

931

 

 

 

706

 

Revenues

 

 

8,060

 

 

 

5,364

 

 

 

4,326

 

Reimbursed expenses

 

 

1,679

 

 

 

1,514

 

 

 

1,411

 

Total revenues

 

$

9,739

 

 

$

6,878

 

 

$

5,737

 

Total property, equipment and software, net

 

 

As of December 31,

 

(in millions)

 

2017

 

 

2016

 

Property, equipment and software, net:

 

 

 

 

 

 

 

 

Americas:

 

 

 

 

 

 

 

 

United States

 

$

623

 

 

$

430

 

Other

 

 

27

 

 

 

25

 

Americas

 

 

650

 

 

 

455

 

Europe and Africa:

 

 

 

 

 

 

 

 

United Kingdom

 

 

51

 

 

 

40

 

Other

 

 

208

 

 

 

214

 

Europe and Africa

 

 

259

 

 

 

254

 

Asia-Pacific:

 

 

 

 

 

 

 

 

Japan

 

 

39

 

 

 

36

 

Other

 

 

37

 

 

 

34

 

Asia-Pacific

 

 

76

 

 

 

70

 

Total property, equipment and software, net

 

$

985

 

 

$

779

 


20. Segments

122

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

22. Segments

The following table presents the Company’s operations by reportable segment. The Company is managed through three reportable segments, CommercialTechnology & Analytics Solutions, Research & Development Solutions and Integrated Engagement Services. CommercialContract Sales & Medical Solutions. Technology & Analytics Solutions provides mission critical information, technology solutions and real-worldreal world insights and services to the Company’s life science clients. Research & Development Solutions, which primarily serves biopharmaceutical clients, is engaged in research and development andcustomers, provides outsourced clinical research and clinical trial related services. Integrated Engagement ServicesContract Sales & Medical Solutions provides health care provider (including contract salessales) and patient engagement services to both biopharmaceutical clientscustomers and the broader healthcare market. Prior period segment results have been recast to conform to immaterial changes to management reporting in 2017. The recast only impacts the fourth quarter of 2016 as the management reporting changes relate to IMS Health and these results are only reflected in our results since the date of the Merger on October 3, 2016. 


Certain costs are not allocated to the Company’sCompany's segments and are reported as general corporate and unallocated expenses. These costs primarily consist of stock-based compensation and expenses for corporate overhead functions such as senior leadership, finance, human resources, information technology, facilitiesrelated to integration activities and legal.acquisitions. The Company also does not allocate restructuring costs, depreciation and amortization restructuring costs, merger related costs or impairment charges, if any, to its segments. Revenues and costs for reimbursed expenses are not allocated to the Company’s segments. Asset information by segment is not presented, as this measure is not used by the chief operating decision maker to assess the performance of the Company. InformationCompany’s performance. The Company’s reportable segment information is presented below is in millions:

below:

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Solutions

 

$

3,630

 

 

$

1,089

 

 

$

323

 

Research & Development Solutions

 

 

3,647

 

 

 

3,478

 

 

 

3,159

 

Integrated Engagement Services

 

 

783

 

 

 

797

 

 

 

844

 

Total revenues

 

 

8,060

 

 

 

5,364

 

 

 

4,326

 

Costs of revenue

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Solutions

 

 

1,917

 

 

 

641

 

 

 

239

 

Research & Development Solutions

 

 

2,068

 

 

 

1,956

 

 

 

1,779

 

Integrated Engagement Services

 

 

637

 

 

 

639

 

 

 

687

 

Total costs of revenue

 

 

4,622

 

 

 

3,236

 

 

 

2,705

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Solutions

 

 

703

 

 

 

214

 

 

 

65

 

Research & Development Solutions

 

 

582

 

 

 

579

 

 

 

556

 

Integrated Engagement Services

 

 

73

 

 

 

82

 

 

 

79

 

General corporate and unallocated

 

 

247

 

 

 

136

 

 

 

115

 

Total selling, general and administrative expenses

 

 

1,605

 

 

 

1,011

 

 

 

815

 

Segment profit

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Solutions

 

 

1,010

 

 

 

234

 

 

 

19

 

Research & Development Solutions

 

 

997

 

 

 

943

 

 

 

824

 

Integrated Engagement Services

 

 

73

 

 

 

76

 

 

 

78

 

Total segment profit

 

 

2,080

 

 

 

1,253

 

 

 

921

 

General corporate and unallocated

 

 

(247

)

 

 

(136

)

 

 

(115

)

Depreciation and amortization

 

 

(1,011

)

 

 

(289

)

 

 

(128

)

Restructuring costs

 

 

(63

)

 

 

(71

)

 

 

(30

)

Merger related costs

 

 

—

 

 

 

(87

)

 

 

—

 

Impairment charges

 

 

(40

)

 

 

(28

)

 

 

(2

)

Total income from operations

 

$

719

 

 

$

642

 

 

$

646

 

 

113

123

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

23.


Year Ended December 31,
(in millions)202320222021
Revenues
Technology & Analytics Solutions$5,862 $5,746 $5,534 
Research & Development Solutions8,395 7,921 7,556 
Contract Sales & Medical Solutions727 743 784 
Total revenues14,984 14,410 13,874 
Cost of revenues, exclusive of depreciation and amortization
Technology & Analytics Solutions3,496 3,348 3,278 
Research & Development Solutions5,629 5,395 5,303 
Contract Sales & Medical Solutions620 639 652 
Total cost of revenues, exclusive of depreciation and amortization9,745 9,382 9,233 
Selling, general and administrative expenses
Technology & Analytics Solutions876 848 798 
Research & Development Solutions851 831 777 
Contract Sales & Medical Solutions58 62 57 
General corporate and unallocated268 330 332 
Total selling, general and administrative expenses2,053 2,071 1,964 
Segment profit
Technology & Analytics Solutions1,490 1,550 1,458 
Research & Development Solutions1,915 1,695 1,476 
Contract Sales & Medical Solutions49 42 75 
Total segment profit3,454 3,287 3,009 
General corporate and unallocated(268)(330)(332)
Depreciation and amortization(1,125)(1,130)(1,264)
Restructuring costs(84)(28)(20)
Total income from operations$1,977 $1,799 $1,393 

21. Earnings Per Share

The following table reconciles the basic to diluted weighted average shares outstanding (in millions):

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Basic weighted average common shares outstanding

 

 

217.8

 

 

 

149.1

 

 

 

123.0

 

Effect of dilutive stock options and share awards

 

 

4.8

 

 

 

2.9

 

 

 

2.6

 

Diluted weighted average common shares outstanding

 

 

222.6

 

 

 

152.0

 

 

 

125.6

 


The following table presents the weighted average numbercomputation of outstanding stock-based awards not included in the computation ofbasic and diluted earnings per share if they are subject to performance conditions or if the effect of including such stock-based awards in the computation would be anti-dilutive (in millions):

share:

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Shares subject to performance conditions

 

 

0.4

 

 

 

0.1

 

 

 

0.1

 

Shares subject to anti-dilutive stock-based awards

 

 

1.0

 

 

 

1.1

 

 

 

1.0

 

Total shares excluded from diluted earnings per share

 

 

1.4

 

 

 

1.2

 

 

 

1.1

 

Year Ended December 31,
(in millions, except per share data)202320222021
Numerator:
Net income attributable to IQVIA Holdings Inc.$1,358 $1,091 $966 
Denominator:
Basic weighted average common shares outstanding183.8 187.6 191.4 
Effect of dilutive stock options and share awards2.5 3.0 3.6 
Diluted weighted average common shares outstanding186.3 190.6 195.0 
Earnings per share attributable to common stockholders:
Basic$7.39 $5.82 $5.05 
Diluted$7.29 $5.72 $4.95 

The vesting of performance awards is contingent upon the achievement of certain performance targets. The performance awards are not included in diluted earnings per share until the performance targets have been met.


Stock-based awards will have a dilutive effect under the treasury method when the respective period’s average market value of the Company’s common stock exceeds the exercise proceeds.

24. Performance awards are included in diluted earnings per share based on if the performance targets have been met at the end of the reporting period.


114

For the years ended December 31, 2023, 2022 and 2021 the weighted average number of outstanding stock-based awards not included in the computation of diluted earnings per share because they are subject to performance conditions that have not been met at the end of the reporting period or the effect of including such stock-based awards in the computation would be anti-dilutive was 1.0 million, 0.5 million, and 0.1 million, million, respectively.

22. Accumulated Other Comprehensive (Loss) Income


Below is a summary of the components of AOCI (in millions):

AOCI:

 

 

Foreign

Currency

Translation

 

 

Derivative

Instruments

 

 

Defined

Benefit

Plans

 

 

Income

Taxes

 

 

Total

 

Balance at December 31, 2014

 

$

(56

)

 

$

(19

)

 

$

(15

)

 

$

31

 

 

$

(59

)

Other comprehensive (loss) income before

   reclassifications

 

 

(61

)

 

 

(13

)

 

 

—

 

 

 

9

 

 

 

(65

)

Reclassification adjustments

 

 

—

 

 

 

18

 

 

 

1

 

 

 

(6

)

 

 

13

 

Balance at December 31, 2015

 

 

(117

)

 

 

(14

)

 

 

(14

)

 

 

34

 

 

 

(111

)

Other comprehensive (loss) income before

   reclassifications

 

 

(506

)

 

 

(4

)

 

 

34

 

 

 

(5

)

 

 

(481

)

Reclassification adjustments

 

 

—

 

 

 

28

 

 

 

1

 

 

 

(7

)

 

 

22

 

Balance at December 31, 2016

 

 

(623

)

 

 

10

 

 

 

21

 

 

 

22

 

 

 

(570

)

Other comprehensive income before

   reclassifications

 

 

406

 

 

 

5

 

 

 

8

 

 

 

197

 

 

 

616

 

Reclassification adjustments

 

 

—

 

 

 

(1

)

 

 

1

 

 

 

—

 

 

 

—

 

Balance at December 31, 2017

 

$

(217

)

 

$

14

 

 

$

30

 

 

$

219

 

 

$

46

 

(in millions)Foreign Currency TranslationDerivative InstrumentsDefined Benefit PlansIncome TaxesTotal
Balance as of December 31, 2020$(395)$(48)$(85)$323 $(205)
Other comprehensive (loss) income before reclassifications(165)11 90 (139)(203)
Reclassification adjustments— 16 — (4)12 
Acquisition of Quest's non-controlling interest(10)— — — (10)
Balance as of December 31, 2021(570)(21)5 180 (406)
Other comprehensive (loss) income before reclassifications(255)53 (13)(116)(331)
Reclassification adjustments— 12 — (2)10 
Balance as of December 31, 2022(825)44 (8)62 (727)
Other comprehensive (loss) income before reclassifications(144)(10)11 54 (89)
Reclassification adjustments— (68)— 17 (51)
Balance as of December 31, 2023$(969)$(34)$3 $133 $(867)

124

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued


Below is a summary of the (gains) lossesadjustments for amounts reclassified from AOCI into the consolidated statements of income and the affected financial statement line item (in millions):

item:

 

 

 

Year Ended December 31,

 

Reclassification Adjustments

 

Affected Financial Statement

Line Item

 

2017

 

 

2016

 

 

2015

 

Year Ended December 31,Year Ended December 31,

(in millions)

(in millions)
Affected Financial Statement Line Item202320222021

Derivative instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps and caps

 

Interest expense

 

$

—

 

 

$

6

 

 

$

12

 

Interest rate swaps
Interest rate swaps
Interest rate swaps

Foreign exchange forward contracts

 

Revenues

 

 

7

 

 

 

19

 

 

 

6

 

Foreign exchange forward contracts

 

Other expense (income), net

 

 

(8

)

 

 

3

 

 

 

—

 

Total before income taxes

 

 

 

 

(1

)

 

 

28

 

 

 

18

 

Income tax (benefit) expense

 

 

 

 

—

 

 

 

7

 

 

 

6

 

Total before income taxes
Total before income taxes
Income taxes

Total net of income taxes

 

 

 

$

(1

)

 

$

21

 

 

$

12

 

Defined benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of actuarial losses

 

See Note 19

 

$

1

 

 

$

1

 

 

$

1

 

Income tax (benefit) expense

 

 

 

 

—

 

 

 

—

 

 

 

—

 

Total net of income taxes

 

 

 

$

1

 

 

$

1

 

 

$

1

 

25.



23. Supplemental Cash Flow Information


The following table presents the Company’s supplemental cash flow information (in millions):

 

 

Year Ended December 31,

 

 

 

2017

 

 

2016

 

 

2015

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

320

 

 

$

124

 

 

$

82

 

Income taxes paid, net of refunds

 

$

195

 

 

$

106

 

 

$

121

 

Non-cash Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of consideration transferred in connection with business

   combinations

 

$

—

 

 

$

10,425

 

 

$

423

 


125

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

26. Quarterly Financial Data (Unaudited)

The following table summarizes the Company’s unaudited quarterly results of operations (in millions, except per share data):

 

 

2017

 

 

 

First Quarter

 

 

Second Quarter

 

 

Third Quarter

 

 

Fourth Quarter

 

Revenues

 

$

1,911

 

 

$

1,969

 

 

$

2,019

 

 

$

2,161

 

Income from operations

 

 

168

 

 

 

151

 

 

 

197

 

 

 

203

 

Net income

 

 

76

 

 

 

79

 

 

 

89

 

 

 

1,084

 

Net income attributable to non-controlling interests

 

 

(2

)

 

 

(4

)

 

 

(5

)

 

 

(8

)

Net income attributable to IQVIA Holdings Inc.(1)

 

$

74

 

 

$

75

 

 

$

84

 

 

$

1,076

 

Basic earnings per share(2)

 

$

0.32

 

 

$

0.35

 

 

$

0.39

 

 

$

5.14

 

Diluted earnings per share(2)

 

$

0.31

 

 

$

0.34

 

 

$

0.38

 

 

$

5.02

 

 

 

2016

 

 

 

First Quarter

 

 

Second Quarter

 

 

Third Quarter

 

 

Fourth Quarter(3)

 

Revenues

 

$

1,108

 

 

$

1,167

 

 

$

1,136

 

 

$

1,953

 

Income from operations

 

 

179

 

 

 

151

 

 

 

168

 

 

 

144

 

Net income (loss)

 

 

109

 

 

 

92

 

 

 

104

 

 

 

(175

)

Net income attributable to non-controlling interests

 

 

(2

)

 

 

(5

)

 

 

(5

)

 

 

(3

)

Net income (loss) attributable to IQVIA Holdings Inc.

 

$

107

 

 

$

87

 

 

$

99

 

 

$

(178

)

Basic earnings (loss) per share(2)

 

$

0.89

 

 

$

0.73

 

 

$

0.83

 

 

$

(0.74

)

Diluted earnings (loss) per share(2)

 

$

0.88

 

 

$

0.71

 

 

$

0.82

 

 

$

(0.74

)

information:

(1)

The significant increase during the fourth quarter of 2017 is due to the enactment of the Tax Act. See Note 18 for additional details.

Year Ended December 31,
(in millions)202320222021
Supplemental Cash Flow Information:
Interest paid, net$556$379 $343
Income taxes paid, net of refunds$340$255 $222

(2)

The sum of the quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted average shares outstanding and the effects of rounding for each period.


(3)

The fourth quarter of 2016 includes the results of operations of IMS Health since the date of the Merger on October 3, 2016.

27. Subsequent Event

On February 14, 2018, the IQVIA board authorized an increase in the post-merger share repurchase authorization by $1.5 billion to a total of $5.0 billion, with $1.7 billion authorization remaining.

126


115


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


None.


Item 9A. Controls and Procedures


Evaluation of Disclosure Controls and Procedures


As required by Rule 13a-15 under the Exchange Act, as amended, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.


Management’s Report on Internal Control over Financial Reporting


Our management’s report on internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on Form 10-K and is incorporated herein by reference.


Changes in Internal Control over Financial Reporting


There were no changes in our internal control over financial reporting during the quarter ended December 31, 20172023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Item 9B. Other Information

None.


127

During the quarter ended December 31, 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of IQVIA Holdings Inc. adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of IQVIA Holdings Inc., within the meaning of Item 408 of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

116


PART III


Item 10. Directors, Executive Officers and Corporate Governance


Information required by this Item, other than the information regarding the executive officers of the Company set forth below, is incorporated by reference to the sections of our definitive Proxy Statement for our 20182024 Annual Meeting of Stockholders (the “2018“2024 Proxy Statement”) entitled “Proposal No. 1: Election of Directors,” “Security Ownership of Certain Beneficial Owners and Management—Section 16(a) Beneficial Ownership Reporting Compliance,” “The Company’s CorporateDirectors”, “Corporate Governance—Documents Establishing our Corporate Governance” and “The Company’s Corporate“Corporate Governance—Leadership Structure—Committees of the Board.”


The current executive officers of the Company are as follows:

Name

Age

Position

Name

    Age    

Position

Ari Bousbib

56

62

Chairman and Chief Executive Officer and President

Michael R. McDonnell

Ronald E. Bruehlman

54

63

Executive Vice President and Chief Financial Officer

W. Richard Staub, III

55

61

President, Research & Development Solutions

Kevin C. Knightly

57

63

President, Information & Technology Solutions

Corporate Strategy and Enterprise Networks

James H. Erlinger III

Eric Sherbet

59

Executive Vice President, General Counsel and Secretary


Ari Bousbib, Director, Chairman and Chief Executive Officer and President


Mr. Bousbib is Chairman and Chief Executive Officer and President of the Company. He assumed this position in October 2016 following the Merger of Quintiles and IMS Health. From 2010 until the Merger, Mr. Bousbib served as Chairman and CEO of IMS Health. Prior to joining IMS Health, Mr. Bousbib spent 14 years at United Technologies Corporation (“UTC”), an aerospace, defense and building systems company. From 2008 until 2010, he served as President of UTC’s Commercial Companies, with executive leadership responsibilities for the worldwide operations of Otis Elevator Company, Carrier Corporation, UTC Fire & Security and UTC Power Inc. From 2002 until 2008, Mr. Bousbib was President of Otis, and from 2000 to 2002, he served as its Chief Operating Officer. Prior to joining UTC, Mr. Bousbib was a partner at Booz Allen Hamilton. Mr. Bousbib currently serves on the board of directors of The Home Depot, Inc. and is a member of the Harvard Medical School Health Care Policy Advisory Council. He previously served on the board of directors of Best Buy, Inc. and was appointed by the President of the United States to serve on the President’s Commission on White House Fellowships. Mr. Bousbib holds a Master of Science Degree in Mathematics and Mechanical Engineering from the Ecole Superieure des Travaux Publics, Paris, and an M.B.A. from Columbia University.

Michael R. McDonnell,


Ronald E. Bruehlman, Executive Vice President and Chief Financial Officer


Mr. McDonnell hasBruehlman was appointed as Executive Vice President and Chief Financial Officer effective August 1, 2020. Mr. Bruehlman previously served as Senior Vice President and Chief Financial Officer since December 2015.of IMS Health from July 2011 until the merger of IMS Health and Quintiles in 2016. Prior to joining IMS Health, Mr. Bruehlman worked for 23 years at UTC, advancing through finance positions of increasing responsibility, culminating in his appointment as Vice President, Business Development, which he held from June 2009 to April 2011, where he led the Company, Mr. McDonnell served as the Executivecompany’s global strategy and corporate development activities. From June 2005 until May 2008, he was Vice President and Chief Financial Officer of Intelsat S.A., a leading global provider of satellite services, since July 2011 and as the ExecutiveCarrier Corporation. Prior to that, Mr. Bruehlman was Vice President, Financial Planning and Chief Financial Officer of its subsidiary, Intelsat Investments S.A., from November 2008 to May 2013. He previouslyAnalysis for UTC and also served as Executive Vice President, Chief Operating Officer, Chief Financial Officer and TreasurerDirector, Investor Relations of MCG Capital Corporation, a publicly-held commercial finance company, from August 2006 through October 2008, and as its Executive Vice President, Chief Financial Officer and Treasurer from September 2004 to October 2008. Before joining MCG Capital Corporation,UTC. Mr. McDonnellBruehlman served as Executive Vice Presidenta director and Chief Financial Officer for EchoStar Communications Corporation (f/k/a DISH Network Corporation), a direct-to-home satellite television operator,Chair of the Audit Committee to Atotech, Ltd. from July 20042020 to August 2004 and as its Senior Vice President and Chief Financial Officer from August 2000 to July 2004. Mr. McDonnell spent 14 years at PricewaterhouseCoopers LLP, including four years as a partner.2022. He also served on the boardas a director of directors of Catalyst Health Solutions, Inc., a pharmacy benefit management company,The Connecticut Forum from 2005 to 2012.2015 and served as a director of The New England Air Museum from 2009 through 2013. Mr. McDonnell hasBruehlman holds a Bachelor of Science degree in accountingEconomics from Georgetownthe University of Delaware, and is a certified public accountant.

an M.B.A. from the University of Chicago Booth School of Business.


117

W. Richard Staub, III, President, Research & Development Solutions


Mr. Staub hasresumed the role of President, Research & Development Solutions on September 25, 2023. From April 2022 through September 2023, Mr. Staub was senior advisor to the Chairman and CEO of IQVIA. Mr. Staub had served as President, Research & Development Solutions since December 2016.from November 2016 to March 2022. Previously, Mr. Staub served as President of Novella Clinical, a Quintiles company, since 2013. Prior to Novella’s 2013 acquisition by Quintiles, Mr. Staub served as both president and CEO of Novella Clinical since 2008. Before joining Novella Clinical in 2004, Mr. Staub was senior vice president of global business development for one of the world’s largest clinical research organizations. Mr. Staub’s career in the pharmaceutical industry began at Zeneca Pharmaceuticals in 1989 where he had progressive responsibilities as a medical and hospital sales representative, cardiovascular portfolio analyst and marketing manager. Mr. Staub has a Bachelor of Arts degree in Economics from the University of North Carolina at Chapel Hill.

128

Kevin C. Knightly, President, Information & Technology Solutions

Corporate Strategy and Enterprise Networks


Mr. Knightly has served as President, InformationCorporate Strategy and Enterprise Networks since July 2022. Mr. Knightly previously served as the Company's President, Technology & TechnologyCommercial Solutions sincefrom October 2016. Previously2016 to June 2022. Mr. Knightly served as Senior Vice President, Information Offerings at IMS Health from April 2015 to October 2016. From January 2011 to March 2015, Mr. Knightly served as Senior Vice President, Supplier Management at IMS Health. Prior to that, Mr. Knightly served in a number of senior financial, operations, marketing and general management roles for IMS Health, including as Senior Vice President, Pharma Business Management from 2007 until 2010. Mr. Knightly holds a B.S.Bachelor of Science degree in Economics and Accounting from the College of the Holy Cross, and an M.B.A. from New York University’s Stern Business School.

James H. Erlinger III,


Eric Sherbet, Executive Vice President, General Counsel and Secretary


Mr. ErlingerSherbet has served as our Executive Vice President, General Counsel since January 2013 and as our Secretary since February 2013.March 2018. Prior to joining us,the Company, he spent over 27 years practicing corporateserved as General Counsel and Secretary at Patheon N.V. from November 2014 until November 2017. Prior to joining Patheon, he was General Counsel and Corporate Secretary at InVentiv Health from April 2011 until October 2014. He also previously served as Vice President, Deputy General Counsel and Corporate Secretary at Foster Wheeler AG and before that, as Vice President, Corporate and Securities Law and Secretary with Avaya, Inc. Mr. Sherbet earned his law at Bryan Cave, LLP, a multinational law firm. Mr. Erlinger focused his practice on outsourcing, healthcare, joint ventures, mergers and acquisitions, licensing and capital formation. Mr. Erlinger is a certified public accountantdegree from New York University School of Law and received his Bachelor’sbachelor’s degree in Financecommerce/accounting from the University of Missouri-Columbia, his Master of Business Administration from the University of Missouri-Columbia, College of Business and his Juris Doctor from the University of Missouri-Kansas City School of Law.

Virginia.


Item 11. Executive Compensation


Compensation

The information required by this itemItem is set forth under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Compensation“Leadership Development and Compensation Committee Report,” “Compensation of Named Executive Officers,” and “Compensation“Other Relevant Information—Compensation Committee Interlocks and Insider Participation” in the 2018Company's 2024 Proxy Statement and is incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


Information in response to this Item, other than Securities Authorized for Issuance Under Equity Compensation Plans, will beis set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the Company’s 20182024 Proxy Statement, which information is incorporated herein by reference.


118

Securities Authorized for Issuance Under Equity Compensation Plans


The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2017:

2023:


Equity Compensation Plan Information

Plan Category

 

Number of Securities

to be issued Upon

Exercise of

Outstanding Options,

Warrants and Rights

(a)

 

 

Weighted Average

Exercise Price of

Outstanding Options,

Warrants and Rights

(b)

 

 

Number of Securities

Remaining Available for

Future Issuance Under

Equity Compensation Plans

(excluding securities

reflected in column (a))

(c)

 

 

Equity compensation plans approved by security holders
Equity compensation plans approved by security holders

Equity compensation plans

approved by security holders

 

 

8,503,068

 

(1)

$

50.04

 

(3)

 

13,412,549

 

(4)

6,002,004(1)$141.22 (3)(3)8,454,582(4)

Equity compensation plans not

approved by security holders

 

 

26,727

 

(2)

$

—

 

 

 

—

 

 

Total

 

 

8,529,795

 

 

$

50.04

 

(3)

 

13,412,549

 

 

Total
Total

(1)

Consists of: (i) 7,005,402 shares of common stock issuable upon the exercise of outstanding time-based stock options and underlying outstanding time-based SARs; (ii) 1,097,708 shares of common stock issuable in settlement of outstanding restricted stock units awarded and (ii) 399,958 shares of common stock issuable in settlement of outstanding performance units awarded. Excludes (i) 440,151 shares of common stock subject to outstanding awards of restricted stock and (ii) 76,374 shares of common stock subject to outstanding awards of performance stock.

(2)

Consists of outstanding awards issued to certain executives with supplemental pension benefits in accordance with their individual employment arrangements under the IMS Health DCERP.

(3)

The weighted-average exercise price includes all outstanding stock options and SARs but does not include restricted stock units, restricted stock, performance units or performance stock or IMS Health DCERP awards, all of which do not have an exercise price. If restricted stock units, performance units and other awards that constitute “rights” were included in this calculation, treating such awards as having an exercise price of $0, the weighted average exercise price of outstanding options, warrants and rights would be $41.23.

(4)

Consists of all securities remaining available under our equity compensation plans. All of these shares are available for delivery under stock options, SARs, restricted stock, restricted stock units, performance awards or other forms of equity award authorized by the plans. Does not include 2,251,704 shares that would have remained available under our Employee Stock Purchase Plan had it not been discontinued as of December 31, 2016.

(1)    Consists of: (i) 4,037,681 shares of common stock issuable upon the exercise of outstanding time-based stock options and underlying outstanding time-based SARs; (ii) 882,950 shares of common stock issuable in settlement of outstanding restricted stock units awarded; (iii) 746,070 shares of common stock issuable in settlement of outstanding performance units awarded; (iv) 329,397 shares of common stock reserved for issuance at December 31, 2023 and issuable in settlement of outstanding stock settled long term incentive ("LTI") awards; and (v) 5,906 shares of deferred common stock outstanding under the Director Deferral Plan.

129

(2)    Consists of outstanding awards issued to certain executives with supplemental pension benefits in accordance with their individual employment arrangements under the IMS Health DCERP.
(3)    The weighted-average exercise price includes all outstanding stock options and SARs but does not include restricted stock units, performance units, stock settled LTI awards, deferred stock or IMS Health DCERP awards, all of which do not have an exercise price. If restricted stock units, performance units and other awards that constitute “rights” were included in this calculation, treating such awards as having an exercise price of $0, the weighted average exercise price of outstanding options, warrants and rights would be $95.00.
(4)    Consists of all securities remaining available under our equity compensation plans. All of these shares are available for delivery under stock options, SARs, restricted stock, restricted stock units, performance awards or other forms of equity awards authorized by the plans. Does not include 2,251,704 shares that would have remained available under our Employee Stock Purchase Plan had it not been discontinued as of December 31, 2016.

Item 13. Certain Relationships and Related Transactions and Director Independence


The information required by this item is set forth under the headings “The Company’s Corporate“Corporate Governance,” and “Certain Relationships and Related Party Transactions” in the 20182024 Proxy Statement and is incorporated herein by reference.


Item 14. Principal Accountant Fees and Services


The information required by this item is set forth under the headings “Proposal No. 2: Ratification of the Appointment of the Independent Registered Public Accounting Firm—“Audit—Fees Paid to Independent Registered Public Accounting Firm” in the 20182024 Proxy Statement and is incorporated herein by reference.


130

119


PART IV


Item 15. Exhibits and Financial Statement Schedules


(a)The following documents are filed as part of this report:


(1) Financial Statements


The following consolidated financial statements of IQVIA Holdings Inc. and its subsidiaries, and the independent registered public accounting firm’s report thereon, are included in Part II, Item 8 of this report:

Annual Report:

Page

Page

Management’s Report on Internal Control over Financial Reporting

70

68

Report of Independent Registered Public Accounting Firm

(PCAOB ID: 238)

71

68

Consolidated Statements of Income

73

71

Consolidated Statements of Comprehensive Income

74

72

Consolidated Balance Sheets

75

73

Consolidated Statements of Cash Flows

76

74

Consolidated Statements of Stockholders’ Equity (Deficit)

77

75

Notes to Consolidated Financial Statements

78

76


(2) Financial Statement Schedules for the Years Ended December 31, 2017, 20162023, 2022 and 2015

2021

Schedule I—Condensed Financial Information of Registrant (Parent Company Only)

139

126

Schedule II—Valuation and Qualifying Accounts

144

130


All other schedules are omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.

(3)  Exhibits


(3) Exhibits

The exhibits in the accompanying Exhibit Index preceding the signature page are filed or furnished as a part of this report and are incorporated herein by reference. The Company agrees to furnish to the SEC, upon request, copies of any long-term debt instruments that authorize an amount of securities constituting 10% or less of the total assets of IQVIA Holdings Inc. and its subsidiaries on a consolidated basis.

131

120


EXHIBIT INDEX

 

 

 

Incorporated by Reference

 

Exhibit
Number

 

Exhibit Description

 

Filed
Herewith

 

Form

 

File No.

 

Exhibit

 

Filing Date

 

 

 

 

 

 

 

 

2.1*

Agreement and Plan of Merger, dated as of May 3, 2016, by and between Quintiles Transnational Holdings Inc. and IMS Health Holdings, Inc. (which includes the Plan of Conversion dated as of May 3, 2016 as Exhibit A thereto).

 

8-K

001-35907

2.1

May 3, 2016

 

 

 

 

 

 

 

3.1

Amended and Restated Certificate of Incorporation of IQVIA Holdings Inc., effective November 6, 2017 (as amended through November 6, 2017).

X

 

 

 

 

 

 

 

 

 

 

 

3.2

Amended and Restated Bylaws of IQVIA Holdings Inc., effective November 6, 2017

 

8-K

001-35907

3.2

November 7, 2017

 

 

 

 

 

 

 

4.1

Specimen Common Stock Certificate of Quintiles Transnational Holdings Inc.

 

S-1/A

333-186708

4.1

April 26, 2013

 

 

 

 

 

 

 

4.2

Indenture dated as of May 12, 2015, among Quintiles Transnational Corp., the subsidiary guarantors listed therein and U.S. Bank National Association as trustee.

 

8-K

001-35907

4.1

May 13, 2015

 

 

 

 

 

 

 

4.3

Form of 4.875% Rule 144A Senior Note due 2023 (incorporated by reference to Exhibit A to Exhibit 4.1 filed May 13, 2015).

 

8-K

001-35907

4.2

May 13, 2015

 

 

 

 

 

 

 

4.4

Form of 4.875% Regulation S Senior Note due 2023 (incorporated by reference to Exhibit A to Exhibit 4.1 filed May 13, 2015).

 

8-K

001-35907

4.3

May 13, 2015

 

 

 

 

 

 

 

4.5

Indenture, dated as of September 28, 2016, among Quintiles IMS Incorporated, the Guarantors listed therein and U.S. Bank National Association, as Trustee.

 

8-K

001-35907

4.1

October 3, 2016

 

 

 

 

 

 

 

4.6

Senior Note Indenture, dated as of October 24, 2012, among IMS Health Incorporated, as Issuer, the Guarantors party thereto, and Wells Fargo Bank, National Association, as Trustee.

 

IMS

Health

S-1

333-193159

4.9

January 2, 2014

 

 

 

 

 

 

 

4.7

Senior Note Indenture, dated as of March 30, 2015, among IMS Health Incorporated, as Issuer, the Guarantors party thereto, and Deutsche Trustee Company Limited, as Trustee.

 

IMS
Health

10-Q

001-36381

4.1

May 15, 2015

 

 

 

 

 

 

 

4.8

Indenture, dated February 28, 2017, among Quintiles IMS Incorporated, as Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors.

 

8-K

001-35907

4.1

February 28, 2017

 

 

 

 

 

 

 

4.9

Indenture, dated September 14, 2017, among Quintiles IMS Incorporated, as Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors.

 

8-K

001-35907

4.1

September 19, 2017

 

 

 

 

 

 

 

10.1

Fourth Amended and Restated Credit Agreement, dated as of October 3, 2016, by and among Quintiles IMS Incorporated, Quintiles IMS Holdings, Inc., the Guarantors party thereto and the Lenders party thereto (Annex B to Exhibit 10.9 filed October 3, 2016).

 

8-K

001-35907

10.9

October 3, 2016

 

 

 

 

 

 

 

10.2

Amendment No. 1, dated March 7, 2017, to Fourth Amended and Restated Credit Agreement, dated October 3, 2016 (and filed with the Securities and Exchange Commission as Annex B to Exhibit 10.9 on Form 8-K dated October 3, 2016), among Quintiles IMS Incorporated, Quintiles IMS Holdings, Inc., the Guarantors party thereto, Bank of America N.A., as Administrative Agent and Collateral Agent, the Incremental Term B-1 Euro Lenders party thereto and the other Lenders party thereto.

 

8-K

001-35907

10.1

March 8, 2017

 

 

 

 

 

 

 

10.3

Amendment No. 2, dated September 18, 2017, to Fourth Amended and Restated Credit Agreement, by and among Quintiles IMS Incorporated, Quintiles IMS Holdings, Inc., the Guarantors party thereto and the Incremental Term B-2 Dollar Lenders party thereto.

 

8-K

001-35907

10.1

September 19, 2017

 

 

 

 

 

 

 

10.4

Senior Note Purchase Agreement, dated September 14, 2016, between IMS Health Incorporated, a wholly owned subsidiary of IMS Health Holdings, Inc., and the representative of the initial purchasers named therein.

 

10-Q

001-35907

10.10

November 3, 2016

 

 

 

 

 

 

 

10.5

Amended and Restated Pledge and Security Agreement, dated as of March 17, 2014, among Healthcare Technology Intermediate Holdings, Inc., IMS Health Incorporated, each of the grantors party thereto, and Bank of America, N.A., as Administrative Agent.

 

IMS
Health

S-1/A

333-193159

10.33

March 24, 2014

 

 

 

 

 

 

 

10.6

U.S. Guaranty, dated as of March 17, 2014, among Healthcare Technology Intermediate Holdings, Inc., as Holdings, IMS Health Incorporated, as Parent Borrower, the other Guarantors party thereto from time to time, and Bank of America, N.A., as Administrative Agent.

 

IMS
Health

S-1/A

333-193159

10.34

March 24, 2014

 

 

 

 

 

 

 

132

Incorporated by Reference
Exhibit NumberExhibit DescriptionFiled HerewithFormFile No.ExhibitFiling Date
3.18-K001-359073.1April 18, 2023
3.2

8-K001-359073.1April 18, 2023
4.1
Description of the Company's Securities
X
4.2
Indenture, dated as of September 28, 2016, among Quintiles IMS Incorporated, the Guarantors listed therein and U.S. Bank National Association, as Trustee.
8-K001-359074.1October 3, 2016
4.3
Indenture, dated September 14, 2017, among Quintiles IMS Incorporated, as Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors.
8-K001-359074.1September 19, 2017
4.4
Indenture, dated May 10, 2019, among IQVIA Inc., as Issuer, U.S. Bank National Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors.
8-K001-359074.1May 10, 2019
4.5
Indenture, dated August 13, 2019, among IQVIA Inc., as Issuer, U.S. Bank National Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors.
8-K001-359074.1August 13, 2019
4.6
Indenture, dated June 24, 2020, among IQVIA Inc., as Issuer, U.S. Bank National Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors.
8-K001-359074.1June 24, 2020
4.7
Indenture, dated March 3, 2021, among IQVIA Inc., as Issuer, U.S. Bank National Association, as trustee of the Notes and certain subsidiaries of the Issuer, as guarantors.
8-K001-359074.1March 3, 2021
4.8S-4001-359074.8January 5, 2024
4.9S-4001-359074.9January 5, 2024
10.1
Fifth Amended and Restated Credit Agreement, dated as of August 25, 2021, by and among IQVIA Inc., IQVIA RDS Inc., IQVIA AG, IQVIA Solutions Japan K.K., IQVIA Holdings Inc., the Guarantors party thereto and the Lenders party thereto (Annex A to Exhibit 10.1 filed August 25, 2021).
8-K001-3590710.1August 25, 2021
10.28-K001-3590710.1June 16, 2022
10.38-K001-3590710.1April 18, 2023
121

 

 

 

Incorporated by Reference

 

Exhibit
Number

 

Exhibit Description

 

Filed
Herewith

 

Form

 

File No.

 

Exhibit

 

Filing Date

 

 

 

 

 

 

 

 

10.7

Assignment and Assumption Agreement, dated December 10, 2009, between Quintiles Transnational Corp. and Quintiles Transnational Holdings Inc.

 

S-1

333-186708

10.12

February 15, 2013

 

 

 

 

 

 

 

10.8

Stockholders Agreement, dated May 3, 2016, among Quintiles Transnational Holdings Inc. and the stockholders identified therein.

 

8-K

001-35907

10.4

May 3, 2016

 

 

 

 

 

 

 

10.9

Voting Agreement, dated May 3, 2016, by and among Quintiles Transnational Holdings Inc. and affiliates of TPG Global, LLC.

 

8-K

001-35907

10.1

May 3, 2016

 

 

 

 

 

 

 

10.10

Voting Agreement, dated May 3, 2016, by and between Quintiles Transnational Holdings Inc. and CPP Investment Board Private Holdings Inc.

 

8-K

001-35907

10.2

May 3, 2016

 

 

 

 

 

 

 

10.11

Voting Agreement, dated May 3, 2016, by and between Quintiles Transnational Holdings Inc. and Leonard Green & Partners, L.P.

 

8-K

001-35907

10.3

May 3, 2016

 

 

 

 

 

 

 

   10.12

Share Repurchase Agreement, dated February 23, 2017, between Quintiles IMS Holdings, Inc. and the selling shareholders set forth on Schedule I thereto.

 

8-K

001-35907

10.1

February 24, 2017

 

 

 

 

 

 

 

10.13†

Form of Director Indemnification Agreement.

 

S-1/A

333-186708

10.13

April 19, 2013

 

 

 

 

 

 

 

10.14

Form of Indemnification Agreement with each of the non-management directors of Quintiles IMS Holdings Inc.

 

8-K

001-35907

10.8

October 3, 2016

 

 

 

 

 

 

 

10.15†

Description of Non-Employee Director Compensation, effective as of January 1, 2017.

 

10-K

001-35907

10.27

February 16, 2017

 

 

 

 

 

 

 

10.16†

Form of Non-Competition, Non-Solicitation, Confidentiality and IP Agreement.

 

8-K

001-35907

10.2

October 19, 2015

 

 

 

 

 

 

 

10.17†

Quintiles Transnational Holdings Inc. Annual Management Incentive Plan.

 

S-1/A

333-186708

10.57

April 19, 2013

 

 

 

 

 

 

 

10.18†

Quintiles Transnational Holdings Inc. 2008 Stock Incentive Plan.

 

S-1

333-186708

10.17

February 15, 2013

 

 

 

 

 

 

 

10.19†

Form of Stock Option Award Agreement for Senior Executives under the Quintiles Transnational Holdings Inc. 2008 Stock Incentive Plan.

 

S-1

333-186708

10.18

February 15, 2013

 

 

 

 

 

 

 

10.20†

Form of Stock Option Award Agreement for Non-Employee Directors under the Quintiles Transnational Holdings Inc. 2008 Stock Incentive Plan.

 

S-1

333-186708

10.19

February 15, 2013

 

 

 

 

 

 

 

10.21†

Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

S-1/A

333-186708

10.22

April 19, 2013

 

 

 

 

 

 

 

10.22†

Form of Award Agreement Awarding Nonqualified Stock Options to Employees under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

S-1/A

333-186708

10.23

April 19, 2013

 

 

 

 

 

 

 

10.23†

Form of Award Agreement Awarding Incentive Stock Options to Employees under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

10-Q

001-35907

10.2

May 1, 2014

 

 

 

 

 

 

 

10.24†

Form of Award Agreement Awarding Nonqualified Stock Options to Non-Employee Directors under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

S-1/A

333-186708

10.24

April 19, 2013

 

 

 

 

 

 

 

10.25†

Form of Award Agreement Awarding Stock Appreciation Rights under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

S-1/A

333-186708

10.56

April 19, 2013

 

 

 

 

 

 

 

10.26†

Form of Award Agreement Awarding Stock Appreciation Rights under the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan effective February 2017.

 

10-K

001-35907

10.41

February 16, 2017

 

 

 

 

 

 

 

10.27†

Form of Award Agreement Awarding Restricted Stock Units under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan prior to February 2015.

 

8-K

001-35907

10.1

November 26, 2013

 

 

 

 

 

 

 

10.28†

Form of Award Agreement Awarding Restricted Stock Units under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan effective February 2015.

 

10-K

001-35907

10.34

February 12, 2015

 

 

 

 

 

 

 

10.29†

Form of Award Agreement Awarding Performance Units under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

10-K

001-35907

10.35

February 12, 2015

 

 

 

 

 

 

 

10.30†

Form of Award Agreement Awarding Performance Shares under the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan effective February 2017.

 

10-K

001-35907

10.45

February 16, 2017

 

 

 

 

 

 

 

10.31†

Form of Restricted Stock Award Agreement under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

 

10-Q

001-35907

10.3

November 3, 2016

 

 

 

 

 

 

 

10.32†

Form of Award Agreement Awarding Restricted Stock Units under the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan effective February 2017.

 

10-K

001-35907

10.47

February 16, 2017


133

10.48-K001-3590710.1November 23, 2023
10.5
Amended and Restated Pledge and Security Agreement, dated as of March 17, 2014, among Healthcare Technology Intermediate Holdings, Inc., IMS Health Incorporated, each of the grantors party thereto, and Bank of America, N.A., as Administrative Agent.
IMS
Health S-1/A		333-19315910.33March 24, 2014
10.6
U.S. Guaranty, dated as of March 17, 2014, among Healthcare Technology Intermediate Holdings, Inc., as Holdings, IMS Health Incorporated, as Parent Borrower, the other Guarantors party thereto from time to time, and Bank of America, N.A., as Administrative Agent.
IMS
Health S-1/A		333-19315910.34March 24, 2014
10.7†
Form of Director Indemnification Agreement.
S-1/A333-18670810.13April 19, 2013
10.8
Form of Indemnification Agreement with each of the non-management directors of Quintiles IMS Holdings Inc.
8-K001-3590710.8October 3, 2016
10.9†
Form of Confidentiality and Restrictive Covenants Agreement
X
10.10†
Work Product Assignment Agreement
X
10.11†
Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.
S-1/A333-18670810.22April 19, 2013
10.12†
Form of Award Agreement Awarding Stock Appreciation Rights under the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan effective February 2017.
10-K001-3590710.41February 16, 2017
10.13†
Quintiles IMS Holdings, Inc. Defined Contribution Executive Retirement Plan.
8-K001-3590710.7October 3, 2016
10.14†
IMS Health Incorporated Defined Contribution Executive Retirement Plan, as amended and restated.
IMS Health S-1333-19315910.10January 2, 2014
10.15†
First Amendment to the IMS Health Incorporated Retirement Excess Plan, dated March 17, 2009.
IMS Health S-1333-19315910.12January 2, 2014
10.16†
Second Amendment to the IMS Health Incorporated Retirement Excess Plan, dated December 8, 2009.
IMS Health S-1333-19315910.13January 2, 2014
10.17†
Third Amendment to the IMS Health Incorporated Retirement Excess Plan, dated April 5, 2011.
IMS Health S-1333-19315910.14January 2, 2014
10.18†
Fourth Amendment to the IMS Health Incorporated Retirement Excess Plan (effective May 3, 2016).
IMS Health 10-Q001-3638110.3July 28, 2016
10.19†
IMS Health Incorporated Retirement Plan, as amended and restated effective January 1, 2020
X
10.20†
Quintiles IMS Holdings, Inc. 2014 Incentive and Stock Award Plan.
8-K001-3590710.6October 3, 2016
10.21†
Form of IMS Stock Appreciation Rights Agreement under the 2014 Incentive and Stock Award Plan.
IMS Health 8-K001-3638110.1February 10, 2015
10.22†
IQVIA Holdings Inc. 2017 Incentive Stock Award Plan (f/k/a Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan).
DEF 14A001-35907Appendix BFebruary 22, 2017
10.23†
Form of Award Agreement Awarding Stock Appreciation Rights under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.
10-Q001-3590710.8May 8, 2017
10.24†
Form of Award Agreement Awarding Performance Shares under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.
10-Q001-3590710.9May 8, 2017
10.25†
Form of Award Agreement Awarding Restricted Stock Units under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.
10-Q001-3590710.1May 8, 2017
10.26†
IQVIA Inc. Employee Protection Plan and Summary Plan Description, as amended and restated effective July 1, 2023.
10-Q001-3590710.1August 1, 2023
122

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed
Herewith

Form

File No.

Exhibit

Filing Date

10.33†

Quintiles IMS Holdings, Inc. Defined Contribution Executive Retirement Plan.

8-K

001-35907

10.7

October 3, 2016

10.34†

IMS Health Incorporated Defined Contribution Executive Retirement Plan, as amended and restated.

IMS
Health

S-1

333-193159

10.10

January 2, 2014

10.35†

First Amendment to the IMS Health Incorporated Retirement Excess Plan, dated March 17, 2009.

IMS
Health

S-1

333-193159

10.12

January 2, 2014

10.36†

Second Amendment to the IMS Health Incorporated Retirement Excess Plan, dated December 8, 2009.

IMS
Health

S-1

333-193159

10.13

January 2, 2014

10.37†

Third Amendment to the IMS Health Incorporated Retirement Excess Plan, dated April 5, 2011.

IMS
Health

S-1

333-193159

10.14

January 2, 2014

10.38†

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

IMS
Health

10-Q

001-36381

10.3

July 28, 2016

10.39†

Quintiles IMS Holdings, Inc. 2010 Equity Incentive Plan.

8-K

001-35907

10.5

October 3, 2016

10.40†

Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan, as amended and restated.

IMS
Health

S-1/A

333-193159

10.16

February 13, 2014

10.41†

Form of IMS Time-and Performance-Based Stock Option Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.17

January 2, 2014

10.42†

Form of IMS Time-Based Stock Option Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.18

January 2, 2014

10.43†

Form of IMS Director Stock Option Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.19

January 2, 2014

10.44†

Form of IMS Restricted Stock Unit Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.20

January 2, 2014

10.45†

Form of IMS Director Restricted Stock Unit Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.21

January 2, 2014

10.46†

Form of IMS Rollover Stock Appreciation Right Award Agreement under the 2010 Equity Incentive Plan.

IMS
Health

S-1

333-193159

10.22

January 2, 2014

10.47†

IMS Health Incorporated Savings Equalization Plan, as amended and restated effective as of January 1, 2011.

IMS
Health

S-1

333-193159

10.15

January 2, 2014

10.48†

Quintiles IMS Holdings, Inc. 2014 Incentive and Stock Award Plan.

8-K

001-35907

10.6

October 3, 2016

10.49†

Form of IMS Stock Appreciation Rights Agreement under the 2014 Incentive and Stock Award Plan.

IMS
Health

8-K

001-36381

10.1

February 10, 2015

10.50†

Form of IMS Performance Share Award Agreement under the 2014 Incentive and Stock Award Plan.

IMS
Health

8-K

001-36381

10.2

February 10, 2015

10.51†

2014 IMS Health Annual Incentive Plan.

IMS
Health

S-1/A

333-193159

10.30

March 10, 2014


134

10.27†
IQVIA Savings Equalization Plan, effective January 1, 2018.
X
10.28†
IQVIA Elective Deferred Compensation Plan, as amended and restated.
X
10.29†
IQVIA Holdings Inc. Non-Employee Director Deferral Plan, effective January 1, 2017 (amended November 9, 2023).
X
10.30†
Amended and Restated Employment Agreement between IQVIA Holdings Inc. and Ari Bousbib, dated February 18, 2019.
10-K001-3590710.6February 19, 2019
10.31†
Stock Appreciation Rights Agreement between IMS Health Holdings, Inc. and Ari Bousbib, dated February 10, 2015.
IMS Health 10-K001-3638110.34February 19, 2016
10.32†
Amendment No. 1, dated December 31, 2015, to Stock Appreciation Rights Agreement between IMS Health Holdings, Inc. and Ari Bousbib dated February 10, 2015.
IMS Health 10-K001-3638110.35February 19, 2016
10.33†
Letter Agreement between the Company and Eric Sherbet, effective on March 1, 2018.
10-K001-3590710.72February 19, 2019
10.34†
Letter Agreement between the Company and Ronald Bruehlman, effective on August 1, 2020.
10-Q001-3590710.10October 22, 2020
10.35†X
10.36S-4001-3590710.1January 5, 2024
10.37S-4001-3590710.2January 5, 2024
21.1
List of Subsidiaries of IQVIA Holdings Inc.
X
22.1S-4001-3590722.1January 5, 2023
23.1
Consent of PricewaterhouseCoopers LLP.
X
31.1
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
97.1†X
101Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Notes to Consolidated Financial Statements and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
104Cover Page Interactive Data File. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X

†     Indicates management contract or compensatory plan or arrangement.


123

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed
Herewith

Form

File No.

Exhibit

Filing Date

10.52†

Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan.

DEF 14A

001-35907

Appendix B

February 22, 2017

10.53†

Form of Award Agreement Awarding Stock Appreciation Rights under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.

10-Q

001-35907

10.8

May 8, 2017

10.54†

Form of Award Agreement Awarding Performance Shares under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.

10-Q

001-35907

10.9

May 8, 2017

10.55†

Form of Award Agreement Awarding Restricted Stock Units under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan effective April 2017.

10-Q

001-35907

10.10

May 8, 2017

10.56†

Quintiles Transnational Holdings Inc. Change of Control Severance Plan, which covers among others our executive officers.

8-K

001-35907

10.1

November 6, 2015

10.57†

Quintiles IMS Incorporated Employee Protection Plan, effective January 1, 2017.

10-K

001-35907

10.69

February 16, 2017

10.58†

Quintiles IMS Incorporated Savings Equalization Plan, effective December 31, 2016.

10-K

001-35907

10.76

February 16, 2017

10.59†

Quintiles Transnational Corp. Elective Deferred Compensation Plan, as amended and restated.

10-Q

001-35907

10.1

October 28, 2015

10.60†

Quintiles IMS Holdings Inc. Non-Employee Director Deferral Plan, effective January 1, 2017.

10-K

001-35907

10.78

February 16, 2017

10.61†

Amended and Restated Employment Agreement among IMS Health Holdings, Inc., IMS Health Incorporated and Ari Bousbib, dated February 12, 2014.

IMS
Health

S-1/A

333-193159

10.25

March 10, 2014

10.62†

Senior Management Nonstatutory Option Agreement between Healthcare Technology Holdings, Inc. and Ari Bousbib, dated December 1, 2010.

IMS
Health

S-1/A

333-193159

10.23

February 13, 2014

10.63†

Senior Management Nonstatutory Option Agreement between Healthcare Technology Holdings, Inc. and Ari Bousbib, dated December 1, 2010.

IMS
Health

S-1/A

333-193159

10.24

February 13, 2014

10.64†

Restricted Stock Unit Award Agreement between IMS Health Holdings, Inc. and Ari Bousbib dated February 12, 2014, incorporated herein by reference to Amendment 2 to the Company’s Registration Statement on Form S-1 filed with the SEC on March 10, 2014.

IMS
Health

S-1/A

333-193159

10.29

March 10, 2014

10.65†

Amendment No. 1, dated December 31, 2015, to Restricted Stock Unit Award Agreement between IMS Health Holdings, Inc. and Ari Bousbib dated February 12, 2014.

IMS
Health

10-K

001-36381

10.33

February 19, 2016

10.66†

Stock Appreciation Rights Agreement between IMS Health Holdings, Inc. and Ari Bousbib, dated February 10, 2015.

IMS
Health

10-K

001-36381

10.34

February 19, 2016

10.67†

Amendment No. 1, dated December 31, 2015, to Stock Appreciation Rights Agreement between IMS Health Holdings, Inc. and Ari Bousbib dated February 10, 2015.

IMS
Health

10-K

001-36381

10.35

February 19, 2016

10.68†

Restricted Stock Award Agreement between IMS Health Holdings, Inc. and Ari Bousbib dated December 31, 2015.

IMS
Health

10-K

001-36381

10.36

February 19, 2016

10.69†

Letter Agreement, dated May 3, 2016, between Quintiles Transnational Holdings Inc. and Ari Bousbib.

8-K

001-35907

10.6

May 3, 2016

10.70†

Letter Agreement, dated May 3, 2016, between Quintiles Transnational Holdings Inc. and Dennis B. Gillings, CBE.

8-K

001-35907

10.5

May 3, 2016

10.71†

Letter Agreement, dated October 14, 2015, between Michael McDonnell and Quintiles Transnational Corp.

8-K

001-35907

10.3

October 19, 2015


135

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed
Herewith

Form

File No.

Exhibit

Filing Date

10.72†

Initial Award Agreement Awarding Restricted Stock Units to Michael McDonnell under the Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.

10-K

001-35907

10.29

February 11, 2016

10.73†

Letter agreement between the Company and Michael R. McDonnell effective on October 3, 2016.

8-K

001-35907

10.1

October 3, 2016

10.74†

Executive Employment Agreement, dated November 1, 2012, between James H. Erlinger III and Quintiles Transnational Corp.

10-K

001-35907

10.63

February 12, 2015

10.75†

Letter agreement between the Company and James H. Erlinger III effective on October 3, 2016.

8-K

001-35907

10.2

October 3, 2016

10.76†

Letter Agreement between the Company and W. Richard Staub, III, effective on December 1, 2016.

10-K

001-35907

10.104

February 16, 2017

21.1

List of Subsidiaries of IQVIA Holdings Inc.

X

23.1

Consent of PricewaterhouseCoopers LLP.

X

31.1

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

X

31.2

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

X

32.1

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

X

32.2

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

X

101

Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.

X

†

Indicates management contract or compensatory plan or arrangement.

*

The Merger Agreement and the description thereof included herein have been included to provide investors and stockholders with information regarding the terms of the agreement. They are not intended to provide any other factual information about Quintiles or IMS Health or their respective subsidiaries or affiliates or stockholders. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by Quintiles or IMS Health. Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information about Quintiles or IMS Health and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the United States Securities and Exchange Commission.

Item 16. Form 10-K Summary


None.

136


SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.


IQVIA HOLDINGS INC.

By: /s/ Ronald E. Bruehlman

By:

/s/ Michael R. McDonnell

Name: Ronald E. Bruehlman

Name: Michael R. McDonnell

Title: Executive Vice President and Chief

   Financial Officer


Date: February 16, 2018

15, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

124

SignatureTitleDate

Signature

Title

Date

/s/ Ari Bousbib

Ari Bousbib

Chairman and Chief Executive Officer and President;Officer; Director
February 15, 2024
Ari Bousbib(Principal Executive Officer)

February 16, 2018

/s/ Michael R. McDonnell

Michael R. McDonnell

Ronald E. Bruehlman

Executive Vice President and Chief Financial Officer
February 15, 2024
Ronald E. Bruehlman(Principal Financial Officer)

February 16, 2018

/s/ Robert Parks

Robert Parks

Keriann Cherofsky

Senior Vice President, Chief Accounting Officer and Corporate Controller
February 15, 2024
Keriann Cherofsky(Principal Accounting Officer)

/s/ Carol J. BurtDirectorFebruary 16, 2018

15, 2024

Carol J. Burt

/s/ Dr. Dennis B. Gillings, CBE

Dr. Dennis B. Gillings, CBE

Director

February 16, 2018

/s/ John P. Connaughton

DirectorFebruary 15, 2024
John P. Connaughton

Director

February 16, 2018

/s/ Jonathan J. Coslet

Jonathan J. Coslet

Director

February 16, 2018

/s/ John G. Danhakl

DirectorFebruary 15, 2024
John G. Danhakl

Director

February 16, 2018

/s/ Michael J. Evanisko

Michael J. Evanisko

Director

February 16, 2018

/s/ James A. Fasano

DirectorFebruary 15, 2024
James A. Fasano

Director

February 16, 2018

137

Signature

Title

Date

/s/ Colleen A. Goggins

DirectorFebruary 15, 2024
Colleen A. Goggins

Director

February 16, 2018

/s/ Jack M. Greenberg

Jack M. Greenberg

Director

February 16, 2018

/s/ John M. Leonard, M.D.

DirectorFebruary 15, 2024
John M. Leonard, M.D.

Director

/s/ Leslie Wims Morris

DirectorFebruary 16, 2018

15, 2024

Leslie Wims Morris

/s/ Ronald A. Rittenmeyer

Ronald A. Rittenmeyer

Director

February 16, 2018

/s/ Todd B. Sisitsky

DirectorFebruary 15, 2024
Todd B. Sisitsky

Director

/s/ Sheila A. Stamps

DirectorFebruary 16, 2018

15, 2024
Sheila A. Stamps

125

138

(2) Financial Statement Schedules


Schedule I—Condensed Financial Information of Registrant


IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Selling, general and administrative expenses

 

$

1

 

 

$

—

 

 

$

1

 

Merger related costs

 

 

—

 

 

 

21

 

 

 

—

 

Loss from operations

 

 

(1

)

 

 

(21

)

 

 

(1

)

Interest income

 

 

—

 

 

 

—

 

 

 

—

 

Other expense, net

 

 

—

 

 

 

—

 

 

 

—

 

Loss before income taxes and equity in earnings of subsidiary

 

 

(1

)

 

 

(21

)

 

 

(1

)

Income tax benefit

 

 

(3

)

 

 

(4

)

 

 

(1

)

Income (loss) before equity in earnings of subsidiary

 

 

2

 

 

 

(17

)

 

 

—

 

Equity in earnings of subsidiary

 

 

1,307

 

 

 

132

 

 

 

387

 

Net income

 

$

1,309

 

 

$

115

 

 

$

387

 


Year Ended December 31,
(in millions)202320222021
Equity in earnings of subsidiary, net of tax$1,358 $1,091 $966 
Net income1,358 1,091 966 
Equity in other comprehensive (loss) income of subsidiary, net of tax(140)(321)(191)
Comprehensive income$1,218 $770 $775 

139

126


IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

BALANCE SHEETS

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Net income

 

$

1,309

 

 

$

115

 

 

$

387

 

Comprehensive income (loss) adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on derivative instruments, net of income tax

   expense (benefit) of $1, $3 and ($4)

 

 

4

 

 

 

(7

)

 

 

(9

)

Defined benefit plan adjustments, net of income tax expense of

   $3, $11 and $—

 

 

5

 

 

 

23

 

 

 

—

 

Foreign currency translation, net of income tax benefit of

   ($201), ($9) and ($5)

 

 

607

 

 

 

(497

)

 

 

(56

)

Reclassification adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Losses on derivative instruments included in net income, net of

   income tax expense of $—, $7 and $6

 

 

(1

)

 

 

21

 

 

 

12

 

Amortization of actuarial losses and prior service costs included in

   net income

 

 

1

 

 

 

1

 

 

 

1

 

Comprehensive income (loss)

 

$

1,925

 

 

$

(344

)

 

$

335

 

December 31,
(in millions, except per share data)20232022
ASSETS
Current assets:
Cash and cash equivalents$2 $2 
Total current assets2 2 
Investment in subsidiary9,667 9,667 
Total assets$9,669 $9,669 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$8 $— 
Total current liabilities8 — 
Investment in subsidiary3,546 3,902 
Payable to subsidiary3 2 
Total liabilities3,557 3,904 
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares authorized as of December 31, 2023 and 2022, $0.01 par value, 257.2 shares issued and 181.5 shares outstanding as of December 31, 2023; 256.4 shares issued and 185.7 shares outstanding as of December 31, 202211,028 10,898 
Retained earnings4,692 3,334 
Treasury stock, at cost, 75.7 and 70.7 shares as of December 31, 2023 and 2022, respectively(8,741)(7,740)
Accumulated other comprehensive loss(867)(727)
Total stockholders’ equity6,112 5,765 
Total liabilities and stockholders’ equity$9,669 $9,669 

140

127


IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)

CONDENSED BALANCE SHEETS

STATEMENTS OF CASH FLOWS

 

 

December 31,

 

(in millions, except per share data)

 

2017

 

 

2016

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1

 

 

$

12

 

Income taxes receivable

 

 

—

 

 

 

4

 

Other current assets and receivables

 

 

1

 

 

 

—

 

Total current assets

 

 

2

 

 

 

16

 

Investment in subsidiary

 

 

9,659

 

 

 

8,631

 

Total assets

 

$

9,661

 

 

$

8,647

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

—

 

 

$

—

 

Income taxes payable

 

 

—

 

 

 

—

 

Total current liabilities

 

 

—

 

 

 

—

 

Investment in subsidiary

 

 

1,552

 

 

 

—

 

Payable to subsidiary

 

 

—

 

 

 

14

 

Total liabilities

 

 

1,552

 

 

 

14

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock and additional paid-in capital, 400.0 shares authorized at

   December 31, 2017 and 2016, $0.01 par value, 249.5 and 248.3 shares

   issued and outstanding at December 31, 2017 and 2016, respectively

 

 

10,782

 

 

 

10,602

 

Accumulated deficit

 

 

655

 

 

 

(399

)

Treasury stock, at cost, 41.4 and 12.9 shares at December 31, 2017 and 2016,

   respectively

 

 

(3,374

)

 

 

(1,000

)

Accumulated other comprehensive loss

 

 

46

 

 

 

(570

)

Total stockholders’ equity

 

 

8,109

 

 

 

8,633

 

Total liabilities and stockholders’ equity

 

$

9,661

 

 

$

8,647

 

Year Ended December 31,
(in millions)202320222021
Operating activities:
Net Income$1,358 $1,091 $966 
Adjustments to reconcile net income to cash provided by operating activities:
Equity in earnings of subsidiary(1,358)(1,091)(966)
Change in operating assets and liabilities:
Other operating assets and liabilities— 1 (1)
Net cash provided by (used in) operating activities— 1 (1)
Investing activities:
Investment in subsidiary, net of dividends received1,052 1,238 467 
Net cash provided by investing activities1,052 1,238 467 
Financing activities:
Payments related to employee stock option plans(61)(71)(59)
Repurchase of common stock(992)(1,168)(406)
Intercompany with subsidiary1 — — 
Net cash used in financing activities(1,052)(1,239)(465)
Increase in cash and cash equivalents— — 1 
Cash and cash equivalents at beginning of period2 2 1 
Cash and cash equivalents at end of period$2 $2 $2

141


128


IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS

 

 

Year Ended December 31,

 

(in millions)

 

2017

 

 

2016

 

 

2015

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,309

 

 

$

115

 

 

$

387

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary loss

 

 

91

 

 

 

91

 

 

 

56

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(3

)

 

 

—

 

 

 

—

 

Income taxes payable and other liabilities

 

 

4

 

 

 

(5

)

 

 

—

 

Net cash provided by operating activities

 

 

1,401

 

 

 

201

 

 

 

443

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Investment in subsidiary, net of dividends received

 

 

1,150

 

 

 

791

 

 

 

—

 

Net cash provided by investing activities

 

 

1,150

 

 

 

791

 

 

 

—

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued under employee stock purchase and option plans

 

 

91

 

 

 

97

 

 

 

64

 

Repurchase of common stock

 

 

(2,620

)

 

 

(1,097

)

 

 

(515

)

Repurchase of stock options

 

 

—

 

 

 

—

 

 

 

—

 

Intercompany with subsidiary

 

 

(31

)

 

 

15

 

 

 

1

 

Net cash used in financing activities

 

 

(2,560

)

 

 

(985

)

 

 

(450

)

Effect of foreign currency exchange rate changes on cash

 

 

(2

)

 

 

—

 

 

 

—

 

(Decrease) increase in cash and cash equivalents

 

 

(11

)

 

 

7

 

 

 

(7

)

Cash and cash equivalents at beginning of period

 

 

12

 

 

 

5

 

 

 

12

 

Cash and cash equivalents at end of period

 

$

1

 

 

$

12

 

 

$

5

 


142

IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)

NOTES TO CONDENSED FINANCIAL INFORMATION


The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of IQVIA Holdings Inc.’s (the “Company”) wholly-ownedwholly owned subsidiary, IQVIA Incorporated exceed 25% of the consolidated net assets of the Company. These condensed parent company financial statements are not the general-purpose financial statements of the reporting entity. The ability of IQVIA Incorporated to pay dividends may be limited due to the restrictive covenants in the agreements governing its credit arrangements.


These condensed parent company financial statements include the accounts of IQVIA Holdings Inc. on a standalone basis (the “Parent”) and the equity method of accounting is used to reflect ownership interest in its subsidiary. Refer to the consolidated financial statements and notes presented elsewhere herein for additional information and disclosures with respect to these financial statements.

Since the Parent is part of a group that files a consolidated income tax return, in accordance with ASC 740, a portion of the consolidated amount of current and deferred income tax expense of the Company has been allocated to the Parent. The income tax benefit of $3, $4 million and $1 million in 2017, 2016 and 2015, respectively, represents the income tax benefit that will be or were already utilized in the Company’s consolidated United States federal and state income tax returns. If the Parent was not part of these consolidated income tax returns, it would not be able to recognize any income tax benefit, as it generates no revenue against which the losses could be used on a separate filer basis.


Below is a summary of the dividends paid to the Parent by IQVIA Incorporated in 2017, 2016the years ended December 31, 2023, 2022 and 2015 (in millions):

2021:

 

 

Amount

 

Paid in December 2017

 

$

22

 

Paid in November 2017

 

 

362

 

Paid in September 2017

 

 

373

 

Paid in August 2017

 

 

168

 

Paid in May 2017

 

 

356

 

Paid in March 2017

 

 

1,237

 

Paid in February 2017

 

 

45

 

Paid in January 2017

 

 

3

 

Total paid in 2017

 

$

2,566

 

Paid in December 2016

 

$

503

 

Paid in November 2016

 

 

422

 

Paid in June 2016

 

 

89

 

Total paid in 2016

 

$

1,014

 

Paid in December 2015

 

$

1

 

Paid in November 2015

 

 

223

 

Paid in May 2015

 

 

220

 

Total paid in 2015

 

$

444

 

(in millions)Amount
Paid in November 2023$232
Paid in September 202355
Paid in August 202389
Paid in May 2023490
Paid in March 2023130
Paid in February 202356
Total paid in 2023$1,052
Paid in December 2022$25 
Paid in November 20223 
Paid in October 202240 
Paid in September 2022110 
Paid in August 20221 
Paid in July 2022100 
Paid in June 2022188 
Paid in May 2022303 
Paid in April 20222 
Paid in March 2022125 
Paid in February 2022322 
Paid in January 202220 
Total paid in 2022$1,239 
Paid in December 2021$57 
Paid in November 202189
Paid in October 202160
Paid in September 202136
Paid in August 202135 
Paid in July 202125 
Paid in June 202120 
Paid in May 202123 
Paid in April 20214 
Paid in March 202151 
Paid in February 202170
Total paid in 2021$470 


143

129


Schedule II—Valuation and Qualifying Accounts


Deferred Tax Asset Valuation Allowance

Information presented below is in millions:

 

 

 

 

 

 

Additions

 

 

 

 

 

 

 

 

 

 

 

Balance at

Beginning

of Year

 

 

Charged to

Expenses

 

 

Charged to

Other

Accounts(a)

 

 

Deductions(b)

 

 

Balance at

End of

Year

 

December 31, 2017

 

$

153

 

 

$

52

 

 

$

—

 

 

$

(5

)

 

$

200

 

December 31, 2016

 

$

22

 

 

$

10

 

 

$

129

 

 

$

(8

)

 

$

153

 

December 31, 2015

 

$

25

 

 

$

2

 

 

$

—

 

 

$

(5

)

 

$

22

 

(a)

Recorded through purchase accounting transaction.

(b)

Impact of reductions recorded to expense and translation adjustments.

Additions

(in millions)		Balance at Beginning of YearCharged to ExpensesCharged to Other Accounts(a)Additions (Deductions) (b)Balance at End of Year
December 31, 2023$257$(99)$— $8 $166
December 31, 2022$294$(27)$— $(10)$257
December 31, 2021$306$1$— $(13)$294

144

(a)Recorded through purchase accounting transaction.
(b)Impact of reductions recorded to expense and translation adjustments.
130