UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended June 30, 2019

2020

or

☐

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

For the transition period from            to             .

Commission File Number: 001-35907

IQVIA HOLDINGS INC.


iqv-20200630_g1.jpg
(Exact name of registrant as specified in its charter)

Delaware

27-1341991

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

4820 Emperor Blvd., Durham, North Carolina 27703

and

83 Wooster Heights Road, Danbury, Connecticut 06810

(Address of principal executive offices and Zip Code)

(919) 998-2000 and (203) 448-4600

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes ☒x    No ☐¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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

x

☒

Accelerated filer

☐

Non-accelerated filer

☐

☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No ☒x

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

Title of Each Class

Trading Symbol

Name of Each Exchange on which Registered

Common Stock, par value $0.01 per share

IQV

IQV

New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Class

Number of Shares Outstanding

Common Stock $0.01 par value

195,894,501

191,270,966  shares outstandingas of July 22, 2019

17, 2020



Table of contents
IQVIA HOLDINGS INC.

FORM 10-Q

TABLE OF CONTENTS

Page

Page
PART I—FINANCIAL INFORMATION

3

3

3

4

5

6

7

9

22

32

33

32

33

PART II—OTHER INFORMATION

32

34

32

34

32

34

32

34

Exhibits36

34

35

37


2

Table of contents
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(LOSS)

(unaudited)

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions, except per share data)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions, except per share data)2020201920202019

Revenues

 

$

2,740

 

 

$

2,567

 

 

$

5,424

 

 

$

5,130

 

Revenues$2,521  $2,740  $5,275  $5,424  

Costs of revenue, exclusive of depreciation and amortization

 

 

1,799

 

 

 

1,674

 

 

 

3,547

 

 

 

3,326

 

Costs of revenue, exclusive of depreciation and amortization1,704  1,799  3,528  3,547  

Selling, general and administrative expenses

 

 

436

 

 

 

424

 

 

 

855

 

 

 

844

 

Selling, general and administrative expenses431  436  838  855  

Depreciation and amortization

 

 

294

 

 

 

282

 

 

 

589

 

 

 

564

 

Depreciation and amortization308  294  624  589  

Restructuring costs

 

 

14

 

 

 

17

 

 

 

26

 

 

 

43

 

Restructuring costs16  14  30  26  

Income from operations

 

 

197

 

 

 

170

 

 

 

407

 

 

 

353

 

Income from operations62  197  255  407  

Interest income

 

 

(2

)

 

 

(1

)

 

 

(4

)

 

 

(3

)

Interest income(1) (2) (3) (4) 

Interest expense

 

 

114

 

 

 

107

 

 

 

224

 

 

 

203

 

Interest expense108  114  214  224  

Loss on extinguishment of debt

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Loss on extinguishment of debt12  —  12  —  

Other expense (income), net

 

 

7

 

 

 

(26

)

 

 

—

 

 

 

(22

)

Income before income taxes and equity in

earnings of unconsolidated affiliates

 

 

78

 

 

 

88

 

 

 

187

 

 

 

173

 

Income tax expense

 

 

8

 

 

 

24

 

 

 

49

 

 

 

43

 

Income before equity in earnings of

unconsolidated affiliates

 

 

70

 

 

 

64

 

 

 

138

 

 

 

130

 

Equity in earnings of unconsolidated affiliates

 

 

1

 

 

 

4

 

 

 

—

 

 

 

11

 

Net income

 

 

71

 

 

 

68

 

 

 

138

 

 

 

141

 

Other (income) expense, netOther (income) expense, net(32) 7  (45) —  
(Loss) Income before income taxes and equity in earnings of unconsolidated affiliates(Loss) Income before income taxes and equity in earnings of unconsolidated affiliates(25) 78  77  187  
Income tax (benefit) expenseIncome tax (benefit) expense(5) 8  12  49  
(Loss) Income before equity in earnings of unconsolidated affiliates(Loss) Income before equity in earnings of unconsolidated affiliates(20) 70  65  138  
Equity in (loss) earnings of unconsolidated affiliatesEquity in (loss) earnings of unconsolidated affiliates(1) 1  5  —  
Net (loss) incomeNet (loss) income(21) 71  70  138  

Net income attributable to non-controlling interests

 

 

(11

)

 

 

(7

)

 

 

(20

)

 

 

(11

)

Net income attributable to non-controlling interests(2) (11) (11) (20) 

Net income attributable to IQVIA Holdings Inc.

 

$

60

 

 

$

61

 

 

$

118

 

 

$

130

 

Earnings per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to IQVIA Holdings Inc.Net (loss) income attributable to IQVIA Holdings Inc.$(23) $60  $59  $118  
Loss (earnings) per share attributable to common stockholders:Loss (earnings) per share attributable to common stockholders:

Basic

 

$

0.31

 

 

$

0.30

 

 

$

0.60

 

 

$

0.63

 

Basic$(0.12) $0.31  $0.31  $0.60  

Diluted

 

$

0.30

 

 

$

0.29

 

 

$

0.59

 

 

$

0.62

 

Diluted$(0.12) $0.30  $0.30  $0.59  

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

Basic

 

 

196.2

 

 

 

205.7

 

 

 

196.6

 

 

 

206.6

 

Basic190.9  196.2  191.3  196.6  

Diluted

 

 

200.6

 

 

 

209.9

 

 

 

201.2

 

 

 

210.9

 

Diluted190.9  200.6  195.0  201.2  

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


3

Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

Three Months Ended
June 30,		Six Months Ended
June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Net income

 

$

71

 

 

$

68

 

 

$

138

 

 

$

141

 

Net (loss) incomeNet (loss) income$(21) $71  $70  $138  

Comprehensive income (loss) adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) adjustments:

Unrealized (losses) gains on derivative instruments, net of

income tax (benefit) expense of ($4), $2, ($5) and $2

 

 

(13

)

 

 

3

 

 

 

(18

)

 

 

4

 

Foreign currency translation, net of income tax (benefit)

expense of ($22), $68, $8 and $28

 

 

62

 

 

 

(365

)

 

 

31

 

 

 

(158

)

Unrealized gains (losses) on derivative instruments, net of income tax (benefit) expense of $(3), $(4), $(11), $(5)Unrealized gains (losses) on derivative instruments, net of income tax (benefit) expense of $(3), $(4), $(11), $(5)7  (13) (32) (18) 
Foreign currency translation, net of income tax (benefit) expense of $(29), $(22), $(6), $8Foreign currency translation, net of income tax (benefit) expense of $(29), $(22), $(6), $845  62  (110) 31  

Reclassification adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustments:

Gains on derivative instruments included in net income,

net of income tax (benefit) expense of $—, $—, ($1) and $1

 

 

(3

)

 

 

(1

)

 

 

(4

)

 

 

—

 

(Gains) losses on derivative instruments included in net income, net of income tax expense (benefit) of $1, $—, $1, $(1)(Gains) losses on derivative instruments included in net income, net of income tax expense (benefit) of $1, $—, $1, $(1)(12) (3) 4  (4) 

Comprehensive income (loss)

 

 

117

 

 

 

(295

)

 

 

147

 

 

 

(13

)

Comprehensive income (loss)19  117  (68) 147  

Comprehensive income attributable to non-controlling interests

 

 

(10

)

 

 

(2

)

 

 

(20

)

 

 

(10

)

Comprehensive income attributable to non-controlling interests(1) (10) (6) (20) 

Comprehensive income (loss) attributable to IQVIA Holdings Inc.

 

$

107

 

 

$

(297

)

 

$

127

 

 

$

(23

)

Comprehensive income (loss) attributable to IQVIA Holdings Inc.$18  $107  $(74) $127  

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


4

Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share data)

 

June 30, 2019

 

 

December 31, 2018

 

(in millions, except per share data)June 30, 2020December 31, 2019

ASSETS

 

 

 

 

 

 

 

 

ASSETS

Current assets:

 

 

 

 

 

 

 

 

Current assets:

Cash and cash equivalents

 

$

938

 

 

$

891

 

Cash and cash equivalents$1,109  $837  

Trade accounts receivable and unbilled services, net

 

 

2,401

 

 

 

2,394

 

Trade accounts receivable and unbilled services, net2,371  2,582  

Prepaid expenses

 

 

180

 

 

 

151

 

Prepaid expenses146  138  

Income taxes receivable

 

 

64

 

 

 

69

 

Income taxes receivable53  56  

Investments in debt, equity and other securities

 

 

56

 

 

 

47

 

Investments in debt, equity and other securities73  62  

Other current assets and receivables

 

 

339

 

 

 

322

 

Other current assets and receivables456  451  

Total current assets

 

 

3,978

 

 

 

3,874

 

Total current assets4,208  4,126  

Property and equipment, net

 

 

458

 

 

 

434

 

Property and equipment, net444  458  

Operating lease right-of-use assets

 

 

498

 

 

 

—

 

Operating lease right-of-use assets502  496  

Investments in debt, equity and other securities

 

 

48

 

 

 

41

 

Investments in debt, equity and other securities80  65  

Investments in unconsolidated affiliates

 

 

104

 

 

 

101

 

Investments in unconsolidated affiliates73  87  

Goodwill

 

 

11,937

 

 

 

11,800

 

Goodwill12,133  12,159  

Other identifiable intangibles, net

 

 

5,701

 

 

 

5,951

 

Other identifiable intangibles, net5,262  5,514  

Deferred income taxes

 

 

102

 

 

 

109

 

Deferred income taxes123  119  

Deposits and other assets

 

 

242

 

 

 

239

 

Deposits and other assets358  227  

Total assets

 

$

23,068

 

 

$

22,549

 

Total assets$23,183  $23,251  

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

 

 

 

 

Current liabilities:

Accounts payable and accrued expenses

 

$

2,139

 

 

$

2,295

 

Accounts payable and accrued expenses$2,295  $2,512  

Unearned income

 

 

934

 

 

 

1,007

 

Unearned income1,061  1,014  

Income taxes payable

 

 

111

 

 

 

100

 

Income taxes payable102  108  

Current portion of long-term debt

 

 

100

 

 

 

100

 

Current portion of long-term debt142  100  

Other current liabilities

 

 

211

 

 

 

32

 

Other current liabilities243  211  

Total current liabilities

 

 

3,495

 

 

 

3,534

 

Total current liabilities3,843  3,945  

Long-term debt

 

 

11,299

 

 

 

10,907

 

Long-term debt11,965  11,545  

Deferred income taxes

 

 

671

 

 

 

736

 

Deferred income taxes539  646  

Operating lease liabilities

 

 

398

 

 

 

—

 

Operating lease liabilities402  396  

Other liabilities

 

 

424

 

 

 

418

 

Other liabilities582  456  

Total liabilities

 

 

16,287

 

 

 

15,595

 

Total liabilities17,331  16,988  

Commitments and contingencies

 

 

 

 

 

 

 

 

Commitments and contingencies

Stockholders’ equity:

 

 

 

 

 

 

 

 

Stockholders’ equity:

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

June 30, 2019 and December 31, 2018, $0.01 par value, 252.6 and 251.5

shares issued at June 30, 2019 and December 31, 2018, respectively

 

 

10,964

 

 

 

10,901

 

Common stock and additional paid-in capital, 400.0 shares authorized at June 30, 2020 and December 31, 2019, $0.01 par value, 254.1 shares issued and 191.3 shares outstanding at June 30, 2020; 253.0 shares issued and 192.3 shares outstanding at December 31, 2019Common stock and additional paid-in capital, 400.0 shares authorized at June 30, 2020 and December 31, 2019, $0.01 par value, 254.1 shares issued and 191.3 shares outstanding at June 30, 2020; 253.0 shares issued and 192.3 shares outstanding at December 31, 201911,043  11,049  

Retained earnings

 

 

925

 

 

 

807

 

Retained earnings1,057  998  

Treasury stock, at cost, 56.8 and 54.0 shares at June 30, 2019 and

December 31, 2018, respectively

 

 

(5,151

)

 

 

(4,770

)

Treasury stock, at cost, 62.8 and 60.7 shares at June 30, 2020 and December 31, 2019, respectivelyTreasury stock, at cost, 62.8 and 60.7 shares at June 30, 2020 and December 31, 2019, respectively(6,065) (5,733) 

Accumulated other comprehensive loss

 

 

(215

)

 

 

(224

)

Accumulated other comprehensive loss(444) (311) 

Equity attributable to IQVIA Holdings Inc.’s stockholders

 

 

6,523

 

 

 

6,714

 

Equity attributable to IQVIA Holdings Inc.’s stockholders5,591  6,003  

Non-controlling interests

 

 

258

 

 

 

240

 

Non-controlling interests261  260  

Total stockholders’ equity

 

 

6,781

 

 

 

6,954

 

Total stockholders’ equity5,852  6,263  

Total liabilities and stockholders’ equity

 

$

23,068

 

 

$

22,549

 

Total liabilities and stockholders’ equity$23,183  $23,251  

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


5

Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

Six Months Ended June 30,

 

Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

(in millions)20202019

Operating activities:

 

 

 

 

 

 

 

 

Operating activities:

Net income

 

$

138

 

 

$

141

 

Net income$70  $138  

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

 

 

589

 

 

 

564

 

Depreciation and amortization624  589  

Amortization of debt issuance costs and discount

 

 

6

 

 

 

5

 

Amortization of debt issuance costs and discount8  6  

Stock-based compensation

 

 

60

 

 

 

47

 

Stock-based compensation36  60  

Earnings from unconsolidated affiliates

 

 

—

 

 

 

(11

)

Earnings from unconsolidated affiliates(5) —  

Gain on investments, net

 

 

(5

)

 

 

(3

)

Gain on investments, net(14) (5) 

Benefit from deferred income taxes

 

 

(66

)

 

 

(114

)

Benefit from deferred income taxes(102) (66) 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

Change in accounts receivable, unbilled services and unearned income

 

 

(52

)

 

 

(114

)

Change in accounts receivable, unbilled services and unearned income208  (52) 

Change in other operating assets and liabilities

 

 

(166

)

 

 

(22

)

Change in other operating assets and liabilities(190) (166) 

Net cash provided by operating activities

 

 

504

 

 

 

493

 

Net cash provided by operating activities635  504  

Investing activities:

 

 

 

 

 

 

 

 

Investing activities:

Acquisition of property, equipment and software

 

 

(296

)

 

 

(198

)

Acquisition of property, equipment and software(283) (296) 

Acquisition of businesses, net of cash acquired

 

 

(201

)

 

 

(227

)

Acquisition of businesses, net of cash acquired(92) (201) 

Purchases of marketable securities, net

 

 

(2

)

 

 

—

 

Purchases of marketable securities, net(7) (2) 

Investments in unconsolidated affiliates, net of payments received

 

 

(3

)

 

 

(5

)

Investments in unconsolidated affiliates, net of payments received15  (3) 

Investments in equity securities

 

 

(10

)

 

 

(20

)

Investments in equity securities(2) (10) 

Other

 

 

2

 

 

 

—

 

Other—  2  

Net cash used in investing activities

 

 

(510

)

 

 

(450

)

Net cash used in investing activities(369) (510) 

Financing activities:

 

 

 

 

 

 

 

 

Financing activities:

Proceeds from issuance of debt

 

 

1,100

 

 

 

1,631

 

Proceeds from issuance of debt1,590  1,100  

Payment of debt issuance costs

 

 

(11

)

 

 

(20

)

Payment of debt issuance costs(33) (11) 

Repayment of debt and principal payments on capital lease obligations

 

 

(50

)

 

 

(682

)

Repayment of debt and principal payments on capital lease obligations(755) (50) 

Proceeds from revolving credit facility

 

 

1,100

 

 

 

1,460

 

Proceeds from revolving credit facility1,250  1,100  

Repayment of revolving credit facility

 

 

(1,720

)

 

 

(1,779

)

Repayment of revolving credit facility(1,610) (1,720) 

Proceeds (payments) related to employee stock option plans

 

 

12

 

 

 

(2

)

(Payments) proceeds related to employee stock option plans(Payments) proceeds related to employee stock option plans(41) 12  

Repurchase of common stock

 

 

(381

)

 

 

(668

)

Repurchase of common stock(346) (381) 

Distributions to non-controlling interest, net

 

 

(2

)

 

 

(9

)

Distributions to non-controlling interest, net(5) (2) 

Contingent consideration and deferred purchase price payments

 

 

(20

)

 

 

(24

)

Contingent consideration and deferred purchase price payments(16) (20) 

Net cash provided by (used in) financing activities

 

 

28

 

 

 

(93

)

Net cash provided by financing activitiesNet cash provided by financing activities34  28  

Effect of foreign currency exchange rate changes on cash

 

 

25

 

 

 

(30

)

Effect of foreign currency exchange rate changes on cash(28) 25  

Increase (decrease) in cash and cash equivalents

 

 

47

 

 

 

(80

)

Increase in cash and cash equivalentsIncrease in cash and cash equivalents272  47  

Cash and cash equivalents at beginning of period

 

 

891

 

 

 

959

 

Cash and cash equivalents at beginning of period837  891  

Cash and cash equivalents at end of period

 

$

938

 

 

$

879

 

Cash and cash equivalents at end of period$1,109  $938  

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

6

Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in millions)

 

Common

Stock

Shares

 

 

Treasury

Stock

Shares

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Retained Earnings

 

 

Treasury

Stock

 

 

Accumulated

Other

Comprehensive

(Loss) Income

 

 

Non-

controlling

Interests

 

 

Total

 

Balance, December 31, 2018

 

 

251.5

 

 

 

(54.0

)

 

$

3

 

 

$

10,898

 

 

$

807

 

 

$

(4,770

)

 

$

(224

)

 

$

240

 

 

$

6,954

 

Issuance of common stock

 

 

0.7

 

 

 

—

 

 

 

—

 

 

 

5

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5

 

Repurchase of common stock

 

 

—

 

 

 

(1.0

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(145

)

 

 

—

 

 

 

—

 

 

 

(145

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

21

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

58

 

 

 

—

 

 

 

—

 

 

 

9

 

 

 

67

 

Unrealized losses on derivative instruments,

   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5

)

 

 

—

 

 

 

(5

)

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(32

)

 

 

1

 

 

 

(31

)

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

(1

)

Balance, March 31, 2019

 

 

252.2

 

 

 

(55.0

)

 

 

3

 

 

 

10,924

 

 

 

865

 

 

 

(4,915

)

 

 

(262

)

 

 

250

 

 

 

6,865

 

Issuance of common stock

 

 

0.4

 

 

 

—

 

 

 

—

 

 

 

8

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8

 

Repurchase of common stock

 

 

—

 

 

 

(1.8

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(236

)

 

 

—

 

 

 

—

 

 

 

(236

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

29

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

29

 

Distribution to non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

 

 

(2

)

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

60

 

 

 

—

 

 

 

—

 

 

 

11

 

 

 

71

 

Unrealized losses on derivative instruments,

   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(13

)

 

 

—

 

 

 

(13

)

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

63

 

 

 

(1

)

 

 

62

 

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

—

 

 

 

(3

)

Balance, June 30, 2019

 

 

252.6

 

 

 

(56.8

)

 

$

3

 

 

$

10,961

 

 

$

925

 

 

$

(5,151

)

 

$

(215

)

 

$

258

 

 

$

6,781

 


(in millions)

 

Common

Stock

Shares

 

 

Treasury

Stock

Shares

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Retained Earnings

 

 

Treasury

Stock

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Non-

controlling

Interests

 

 

Total

 

Balance, December 31, 2017

 

 

249.5

 

 

 

(41.4

)

 

$

2

 

 

$

10,780

 

 

$

538

 

 

$

(3,374

)

 

$

49

 

 

$

249

 

 

$

8,244

 

Issuance of common stock

 

 

0.5

 

 

 

—

 

 

 

—

 

 

 

(5

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5

)

Repurchase of common stock

 

 

—

 

 

 

(0.9

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(86

)

 

 

—

 

 

 

—

 

 

 

(86

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

20

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

20

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

69

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

73

 

Unrealized gains on derivative instruments,

   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

203

 

 

 

4

 

 

 

207

 

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

Balance, March 31, 2018

 

 

250.0

 

 

 

(42.3

)

 

 

2

 

 

 

10,795

 

 

 

605

 

 

 

(3,460

)

 

 

254

 

 

 

257

 

 

 

8,453

 

Issuance of common stock

 

 

0.4

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

Repurchase of common stock

 

 

—

 

 

 

(5.6

)

 

 

1

 

 

 

—

 

 

 

—

 

 

 

(573

)

 

 

—

 

 

 

—

 

 

 

(572

)

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

25

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

25

 

Distribution to non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(19

)

 

 

(19

)

Contribution from non-controlling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10

 

 

 

10

 

Net income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

61

 

 

 

—

 

 

 

—

 

 

 

7

 

 

 

68

 

Unrealized gains on derivative instruments,

   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

—

 

 

 

3

 

Foreign currency translation, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(360

)

 

 

(5

)

 

 

(365

)

Reclassification adjustments, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

(1

)

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

Balance, June 30, 2018

 

 

250.4

 

 

 

(47.9

)

 

$

3

 

 

$

10,833

 

 

$

665

 

 

$

(4,033

)

 

$

(104

)

 

$

250

 

 

$

7,614

 

(unaudited)

(in millions)Common
Stock
Shares		Treasury
Stock
Shares		Common
Stock		Additional
Paid-In
Capital		Retained EarningsTreasury
Stock		Accumulated
Other
Comprehensive
(Loss) Income		Non-
controlling
Interests		Total
Balance, December 31, 2019253.0  (60.7) $3  $11,046  $998  $(5,733) $(311) $260  $6,263  
Issuance of common stock0.8  —  —  (44) —  —  —  —  (44) 
Repurchase of common stock—  (2.1) —  —  —  (332) —  —  (332) 
Stock-based compensation—  —  —  7  —  —  —  —  7  
Distributions to non-controlling interests—  —  —  —  —  —  —  (5) (5) 
Net income—  —  —  —  82  —  —  9  91  
Unrealized losses on derivative instruments, net of tax—  —  —  —  —  —  (39) —  (39) 
Foreign currency translation, net of tax—  —  —  —  —  —  (151) (4) (155) 
Reclassification adjustments, net of tax—  —  —  —  —  —  16  —  16  
Balance, March 31, 2020253.8  (62.8) 3  11,009  1,080  (6,065) (485) 260  5,802  
Issuance of common stock0.3  —  —  1  —  —  —  —  1  
Stock-based compensation—  —  —  30  —  —  —  —  30  
Net (loss) income—  —  —  —  (23) —  —  2  (21) 
Unrealized losses on derivative instruments, net of tax
—  —  —  —  —  —  7  —  7  
Foreign currency translation, net of tax—  —  —  —  —  —  46  (1) 45  
Reclassification adjustments, net of tax—  —  —  —  —  —  (12) —  (12) 
Balance, June 30, 2020254.1  (62.8) $3  $11,040  $1,057  $(6,065) $(444) $261  $5,852  

7
Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in millions)
Common
Stock
Shares
Treasury
Stock
Shares
Common
Stock
Additional
Paid-In
Capital
Retained Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interests
Total
Balance, December 31, 2018251.5  (54) $3  $10,898  $807  $(4,770) $(224) $240  $6,954  
Issuance of common stock0.7  —  —  5  —  —  —  —  5  
Repurchase of common stock—  (1) —  —  —  (145) —  —  (145) 
Stock-based compensation—  —  —  21  —  —  —  —  21  
Net income—  —  —  —  58  —  —  9  67  
Unrealized losses on derivative instruments, net of tax—  —  —  —  —  —  (5) —  (5) 
Foreign currency translation, net of tax—  —  —  —  —  —  (32) 1  (31) 
Reclassification adjustments, net of tax—  —  —  —  —  —  (1) —  (1) 
Balance, March 31, 2019252.2  (55.0) $3  $10,924  $865  $(4,915) $(262) $250  $6,865  
Issuance of common stock0.4  —  —  8  —  —  —  —  8  
Repurchase of common stock—  (1.8) —  0  —  (236) —  —  (236) 
Stock-based compensation—  —  —  29  —  —  —  —  29  
Distribution to non-controlling interest—  —  —  0  —  —  —  (2) (2) 
Net income—  —  —  —  60  —  —  11  71  
Unrealized losses on derivative instruments, net of tax—  —  —  —  —  —  (13) —  (13) 
Foreign currency translation, net of tax—  —  —  —  —  —  63  (1) 62  
Reclassification adjustments, net of tax—  —  —  —  —  —  (3) —  (3) 
Balance, June 30, 2019252.6  (56.8) $3  $10,961  $925  $(5,151) $(215) $258  $6,781  
The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Table of contents
IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Summary of Significant Accounting Policies

The Company

IQVIA Holdings Inc. (together with its subsidiaries, the “Company” or “IQVIA”) is a leading global provider of advanced analytics, technology solutions and contract research services to the life sciences industry. With approximately 61,00067,000 employees, IQVIA conducts business in more than 100 countries.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company’s financial condition and results of operations have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.2020. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 2019. The balance sheet at December 31, 20182019 has been derived from the audited consolidated financial statements of the Company but does not include all the disclosures required by GAAP.
Additionally, t

Leases

The Company determines if an arrangement ishe outbreak of the novel coronavirus, or COVID-19, and the various governmental, industry and consumer actions related thereto, could have a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities,material and operating lease liabilitiesadverse effect on our condensed consolidated balance sheets.

Operating lease ROU assetsbusiness, financial condition and operating lease liabilitiesresults of operations. These effects, which largely depend on future developments that cannot be accurately predicted and are recognized baseduncertain, could include a negative impact on the present valueavailability of our key personnel, temporary closures of our facilities or the future minimum leasefacilities of our business partners, customers, suppliers, third party service providers or other vendors, an increased risk of customer defaults or delays in payments overor purchasing decisions, and the lease term at commencement date. interruption of domestic and global supply chains, distribution channels, liquidity and capital or financial markets.As mostCOVID-19 continues to spread, we have and may continue to experience disruptions that could severely impact our business. As such, the results for the three and six months ended June 30, 2020 may not be indicative of results for 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. The operating lease ROU asset also includes any lease payments made before lease commencement and initial direct costs and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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

full year.

Recently Issued Accounting Standards

Accounting pronouncements adopted

In February 2018, the FASB issued new accounting guidance that will allow a reclassification from accumulated other comprehensive income to retained earnings for “stranded income tax effects” resulting from the Tax Act. Because the income statement impact related to the reduction of the historical corporate income tax rate under the Tax Act is required to be included in income tax expense, the guidance acknowledges that the income tax effects of items within accumulated other comprehensive income (“stranded income tax effects”) do not reflect the appropriate income tax rate. The Company adopted this new accounting guidance on January 1, 2019 using the aggregate portfolio approach. The Company elected the option to not reclassify accumulated other comprehensive income to retained earnings for “stranded income tax effects” resulting from the Tax Act.

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 risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The Company adopted this new accounting guidance on January 1, 2019. The adoption of this new accounting guidance did not have a material effect on the Company’s consolidated financial statements.

9

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 Company adopted this new accounting guidance on January 1, 2019 and elected the practical expedients upon transition that retained the lease classification, initial direct costs and determination of whether contracts are or contain a lease, for any leases that existed prior to adoption of the new guidance. The Company also elected the transition method that allows comparative periods to be presented in the year of adoption in accordance with existing guidance. The adoption of this standard had a material impact on the Company’s condensed consolidated balance sheets but did not have a material impact on the Company’s condensed consolidated results of operations or cash flows.

Accounting pronouncements being evaluated

In August 2018, the FASB issued new accounting guidance that clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new accounting guidance will be effective for the Company on January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact ofadopted this new accounting guidance on its consolidated financial statements.

In August 2018, the FASB issued new accounting guidance that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The new accounting guidance will be effective for the Company on January 1, 2021. Early adoption is permitted. 2020. The adoption of this new accounting guidance isdid not expected to have a material effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued new accounting guidance that modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. TheThis new accounting guidance will be effectivealso modifies the disclosure requirements for theemployers that sponsor defined benefit pension or other postretirement plans. The Company adopted this new accounting guidance on January 1, 2020. Early adoption is permitted. The adoption of this new accounting guidance isdid not expected to have a material effect on the Company’s consolidated financial statements.
9
Table of contents

In January 2017, the FASB issued new accounting guidance that simplifies the measurement of goodwill by eliminating the step two impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of goodwill with the carrying amount of that goodwill. The new guidance requires a comparison of the Company’s fair value of a reporting unit with the carrying amount and the Company is required to recognize an impairment charge for the amount by which the carrying amount exceeds the fair value. The Company adopted this new accounting guidance will be effective for the Company on January 1, 2020. Early adoption is permitted. The adoption of this new accounting guidance isdid not expected to have a material effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued a new accounting standard intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The standardCompany adopted this new accounting guidance on January 1, 2020. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. This is based on factors including the Company's assessment of historical losses, client's creditworthiness and the fact that the Company's trade receivables are short term in duration.
Accounting pronouncements being evaluated
In January 2020, the FASB issued new accounting guidance that states any equity security transitioning from the alternative method of accounting to the equity method, or vice versa, due to an observable transaction, will be remeasured immediately before the transition. In addition, the new accounting guidance clarifies the accounting for certain non-derivative forward contracts or purchased call options to acquire equity securities stating such instruments will be measured using the fair value principles before settlement or exercise. The new accounting guidance will be effective for the Company on January 1, 2020.2021 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this new accounting guidance on its consolidated financial statements.

10

In December 2019, the FASB issued new accounting guidance to clarify and simplify the accounting for income taxes. Changes under the new guidance includes eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new accounting guidance will be effective for the Company on January 1, 2021. Early adoption is permitted. The Company is currently evaluating the impact of this new accounting guidance on its consolidated financial statements.

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

The following tables represent revenues by geographic region and reportable segment for the three and six months ended June 30, 20192020 and 2018:

2019:
Three Months Ended June 30, 2020
(in millions)
Technology &
Analytics Solutions
Research &
Development Solutions
Contract Sales &
Medical Solutions
Total
Revenues:
Americas$567  $528  $80  $1,175  
Europe and Africa401  375  40  816  
Asia-Pacific141  332  57  530  
Total revenues$1,109  $1,235  $177  $2,521  

10
Table of contents
Three Months Ended June 30, 2019
(in millions)
Technology &
Analytics Solutions
Research &
Development Solutions
Contract Sales &
Medical Solutions
Total
Revenues:
Americas$588  $642  $100  $1,330  
Europe and Africa376  448  49  873  
Asia-Pacific138  345  54  537  
Total revenues$1,102  $1,435  $203  $2,740  

 

 

Three Months Ended June 30, 2018

 

(in millions)

 

Technology &

Analytics Solutions

 

 

Research &

Development Solutions

 

 

Contract Sales &

Medical Solutions

 

 

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

508

 

 

$

631

 

 

$

92

 

 

$

1,231

 

Europe and Africa

 

 

374

 

 

 

414

 

 

 

59

 

 

 

847

 

Asia-Pacific

 

 

129

 

 

 

305

 

 

 

55

 

 

 

489

 

Total revenues

 

$

1,011

 

 

$

1,350

 

 

$

206

 

 

$

2,567

 


Six Months Ended June 30, 2020
(in millions)Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsTotal
Revenues:
Americas$1,148  $1,198  $171  $2,517  
Europe and Africa797  803  90  1,690  
Asia-Pacific281  675  112  1,068  
Total revenues$2,226  $2,676  $373  $5,275  

Six Months Ended June 30, 2019
(in millions)Technology &
Analytics Solutions		Research &
Development Solutions		Contract Sales &
Medical Solutions		Total
Revenues:
Americas$1,142  $1,283  $194  $2,619  
Europe and Africa759  904  100  1,763  
Asia-Pacific276  664  102  1,042  
Total revenues$2,177  $2,851  $396  $5,424  

 

 

Six Months Ended June 30, 2018

 

(in millions)

 

Technology &

Analytics Solutions

 

 

Research &

Development Solutions

 

 

Contract Sales &

Medical Solutions

 

 

Total

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

979

 

 

$

1,239

 

 

$

185

 

 

$

2,403

 

Europe and Africa

 

 

752

 

 

 

861

 

 

 

124

 

 

 

1,737

 

Asia-Pacific

 

 

265

 

 

 

615

 

 

 

110

 

 

 

990

 

Total revenues

 

$

1,996

 

 

$

2,715

 

 

$

419

 

 

$

5,130

 

NoNaN customer accounted for 10% or more of consolidated revenues for the three and six months ended June 30, 20192020 or 2018.

2019.

Transaction Price Allocated to the Remaining Performance Obligations

As of June 30, 2019,2020, approximately $20.5$22.6 billion of revenue is expected to be recognized in the future from remaining performance obligations. The Company expects to recognize revenue on approximately 35% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. The customer contract transaction price allocated to the remaining performance obligations differs from backlog in that it does not include wholly unperformed contracts under which the customer has a unilateral right to cancel the arrangement.

11

3. Trade Accounts Receivable, Unbilled Services and Unearned Income

Trade accounts receivables and unbilled services consist of the following:

(in millions)

 

June 30, 2019

 

 

December 31, 2018

 

(in millions)June 30, 2020December 31, 2019

Trade accounts receivable:

 

 

 

 

 

 

 

 

Trade accounts receivable:

Billed

 

$

1,120

 

 

$

1,279

 

Billed$1,105  $1,312  

Unbilled services

 

 

1,294

 

 

 

1,130

 

Unbilled services1,285  1,286  

Trade accounts receivable and unbilled services

 

 

2,414

 

 

 

2,409

 

Trade accounts receivable and unbilled services2,390  2,598  

Allowance for doubtful accounts

 

 

(13

)

 

 

(15

)

Allowance for doubtful accounts(19) (16) 

Trade accounts receivable and unbilled services, net

 

$

2,401

 

 

$

2,394

 

Trade accounts receivable and unbilled services, net$2,371  $2,582  

11
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Unbilled services and unearned income were as follows:

(in millions, except percentages)

 

June 30, 2019

 

 

December 31, 2018

 

 

Change

 

(in millions)(in millions)June 30, 2020December 31, 2019Change

Unbilled services

 

$

1,294

 

 

$

1,130

 

 

$

164

 

Unbilled services$1,285  $1,286  $(1) 

Unearned income

 

 

(934

)

 

 

(1,007

)

 

 

73

 

Unearned income(1,061) (1,014) (47) 

Net balance

 

$

360

 

 

$

123

 

 

$

237

 

Net balance$224  $272  $(48) 

Unbilled services, which is comprised of approximately equal parts60% of unbilled receivables and 40% of contract assets as of June 30, 2019, increased2020, decreased by $164$1 million as compared to December 31, 2018.2019. 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 decreasedincreased by $73$47 million over the same period resulting in an increasea decrease of $237$48 million in the net balance of unbilled services and unearned income between December 31, 20182019 and June 30, 2019. These fluctuations are primarily due to2020. The change in the net balance is driven by the difference in timing of payments and invoicingrevenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, related to the Company’s Research & Development Solutions contracts.  

contracts (which is based on the percentage of costs incurred) versus the timing of invoicing, which is based on certain milestones.


Bad debt expense recognized on the Company’s receivables and unbilled services was de minimisnot material for the three and six months ended June 30, 20192020 and 2018.

2019.

4. Leases

The Company has operating leases for corporate offices, datacenters, motor vehicles and certain equipment, many of which contain renewal and escalation clauses. TheThese operating leases expire at various dates through 2029 with options to cancel certain leases at various intervals. The Company also has finance leases for office and lab spaces that expire in 2044. Based on the timing of payments on the finance leases the cash flow impact is not material for the three and six months ended June 30, 2020. 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 exercise or not to exercise a renewal or cancellation option. As of June 30, 2019, the Company has additional operating leases, primarily for corporate offices, that have not yet commenced of $25 million. These operating leases will commence in the third quarter of 2019 with lease terms through 2026.

The components of lease expense were as follows:

(in millions)

 

Classification

 

Three Months Ended

June 30, 2019

 

 

Six Months Ended

June 30, 2019

 

Operating lease cost (1)

 

Selling, general and administrative expenses

 

$

47

 

 

$

95

 

Total lease cost

 

 

 

$

47

 

 

$

95

 

(1)

Includes variable lease costs, which are immaterial.

(in millions)ClassificationThree Months Ended June 30, 2020Three Months Ended June 30, 2019
Operating lease cost (1)
Selling, general and administrative expenses$53  $47  
Finance lease cost (1)
Depreciation and amortization, and Interest expense1  —  
Total lease cost$54  $47  



(in millions)ClassificationSix Months Ended June 30, 2020Six Months Ended June 30, 2019
Operating lease cost (1)
Selling, general and administrative expenses$102  $95  
Finance lease cost (1)
Depreciation and amortization, and Interest expense1  —  
Total lease cost$103  $95  
(1)Includes variable lease costs, which are immaterial.
12
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Other information related to leases was as follows:

(in millions)

 

Six Months Ended

June 30, 2019

 

(in millions)Six Months Ended June 30, 2020Six Months Ended June 30, 2019

Supplemental Cash Flow:

 

 

 

 

Supplemental Cash Flow:

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

 

$

92

 

Operating cash flows from operating leases$102  $92  

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

 

$

28

 

Operating leases$75  $28  
Finance leasesFinance leases$119  $—  

Weighted Average Remaining Lease Term:

 

 

 

 

Weighted Average Remaining Lease Term:

Operating leases

 

5.22 years

 

Operating leases4.77 years5.22 years
Finance leasesFinance leases24.50 years—  

Weighted Average Discount Rate:

 

 

 

 

Weighted Average Discount Rate:

Operating leases

 

 

4.26

%

Operating leases4.11 %4.26 %
Finance leasesFinance leases3.18 %—  

12

Future minimum lease payments under non-cancellable leases as of June 30, 20192020 were as follows:

(in millions)

 

Operating Leases

 

(in millions)Operating LeasesFinance Leases

Remainder of 2019

 

$

86

 

2020

 

 

143

 

Remainder of 2020Remainder of 2020$86  $—  

2021

 

 

113

 

2021148  —  

2022

 

 

91

 

2022124  6  

2023

 

 

69

 

202395  6  

2024

 

 

46

 

202466  6  
2025202553  6  

Thereafter

 

 

77

 

Thereafter43  159  

Total future minimum lease payments

 

 

625

 

Total future minimum lease payments615  183  

Less imputed interest

 

 

(72

)

Less imputed interest(59) (63) 

Total

 

$

553

 

Total$556  $120  

Reported as of June 30, 2019:

 

 

 

 

Reported as of June 30, 2020:Reported as of June 30, 2020:

Other current liabilities

 

$

155

 

Other current liabilities$154  $—  

Operating lease liabilities

 

 

398

 

Operating lease liabilities402  —  
Other liabilitiesOther liabilities—120

Total

 

$

553

 

Total$556  $120  

The Company elected the alternative modified transition method and as such, included the following prior period information as previously disclosed in accordance with Accounting Standards Codification (“ASC”) 840.

The following is a summary of future minimum payments under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018:

(in millions)

 

Operating Leases

 

2019

 

$

167

 

2020

 

 

136

 

2021

 

 

108

 

2022

 

 

90

 

2023

 

 

69

 

Thereafter

 

 

119

 

Total minimum lease payments

 

$

689

 


5. Goodwill

The following is a summary of goodwill by reportable segment for the six months ended June 30, 2019:

2020:

(in millions)

 

Technology & Analytics Solutions

 

 

Research & Development Solutions

 

 

Contract Sales & Medical Solutions

 

 

Consolidated

 

(in millions)Technology & Analytics SolutionsResearch & Development SolutionsContract Sales & Medical SolutionsConsolidated

Balance as of December 31, 2018

 

$

10,239

 

 

$

1,427

 

 

$

134

 

 

$

11,800

 

Balance as of December 31, 2019Balance as of December 31, 2019$10,374  $1,646  $139  $12,159  

Business combinations

 

 

122

 

 

 

18

 

 

 

5

 

 

 

145

 

Business combinations70  —  —  70  

Impact of foreign currency fluctuations and other

 

 

(8

)

 

 

—

 

 

 

—

 

 

 

(8

)

Impact of foreign currency fluctuations and other(51) (48) 3  (96) 

Balance as of June 30, 2019

 

$

10,353

 

 

$

1,445

 

 

$

139

 

 

$

11,937

 

Balance as of June 30, 2020Balance as of June 30, 2020$10,393  $1,598  $142  $12,133  




13

Table of contents
6. Derivatives

The fair values of the Company’s derivative instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded are summarized in the following table:

 

 

 

 

June 30, 2019

 

 

December 31, 2018

 

(in millions)

 

Balance Sheet Classification

 

Assets

 

 

Liabilities

 

 

Notional

 

 

Assets

 

 

Liabilities

 

 

Notional

 

Derivatives designated

   as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange forward

   contracts

 

Other current assets

   and liabilities

 

$

—

 

 

$

2

 

 

$

75

 

 

$

5

 

 

$

3

 

 

$

202

 

Interest rate swaps

 

Other assets and

   liabilities

 

 

—

 

 

 

29

 

 

 

875

 

 

 

3

 

 

 

9

 

 

 

890

 

Interest rate caps

 

Deposits and other

    assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

700

 

Derivatives not designated

   as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange forward

   contracts

 

Other current assets

   and liabilities

 

 

1

 

 

 

1

 

 

 

35

 

 

 

—

 

 

 

—

 

 

 

—

 

Interest rate swaps

 

Other liabilities

 

 

—

 

 

 

4

 

 

 

330

 

 

 

—

 

 

 

5

 

 

 

432

 

Total derivatives

 

 

 

$

1

 

 

$

36

 

 

 

 

 

 

$

9

 

 

$

17

 

 

 

 

 


(in millions)Balance Sheet ClassificationJune 30, 2020December 31, 2019
AssetsLiabilitiesNotionalAssetsLiabilitiesNotional
Derivatives designated as hedging instruments:
Foreign exchange forward contractsOther current assets and liabilities$1  $3  $114  $4  $—  $148  
Interest rate swapsOther assets and liabilities—  60  1,800  —  27  875  
Derivatives not designated as hedging instruments:
Interest rate swapsOther liabilities—  2  326  —  3  325  
Total derivatives$1  $65  $4  $30  
The effect of the Company’s cash flow hedging instruments on other comprehensive income is summarized in the following table:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Foreign exchange forward contracts

 

$

(5

)

 

$

3

 

 

$

(4

)

 

$

1

 

Foreign exchange forward contracts$—  $(5) $(6) $(4) 

Interest rate derivatives

 

 

(15

)

 

 

1

 

 

 

(24

)

 

 

6

 

Interest rate derivatives(10) (15) (33) (24) 

Total

 

$

(20

)

 

$

4

 

 

$

(28

)

 

$

7

 

Total$(10) $(20) $(39) $(28) 

The amount of foreign exchange gainslosses related to the net investment hedge included in the cumulative translation adjustment component of accumulated other comprehensive loss (“AOCI”) for the six months ended June 30, 20192020 was $33$8 million.

7. 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 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 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.

•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 at June 30, 20192020 and December 31, 20182019 due to their short-term nature. At June 30, 20192020 and December 31, 2018,2019, the fair
14
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value of total debt approximated $11,623$12,135 million and $10,850$11,925 million, respectively, as determined under Level 1 and Level 2 measurements for these financial instruments.

14

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 June 30, 2019:

2020:

(in millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

(in millions)Level 1Level 2Level 3Total

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

Marketable securities

 

$

69

 

 

$

—

 

 

$

—

 

 

$

69

 

Marketable securities101  $—  $—  $101  

Derivatives

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Derivatives—  $1  —  1  

Total

 

$

69

 

 

$

1

 

 

$

—

 

 

$

70

 

Total$101  $1  $—  $102  

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

Derivatives

 

$

—

 

 

$

36

 

 

$

—

 

 

$

36

 

Derivatives$—  $65  $—  $65  

Contingent consideration

 

 

—

 

 

 

—

 

 

 

108

 

 

 

108

 

Contingent consideration—  —  111  111  

Total

 

$

—

 

 

$

36

 

 

$

108

 

 

$

144

 

Total$—  $65  $111  $176  

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 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 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.

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 assumptions used to estimate the fair value of contingent consideration include various financial metrics (revenue performance targets and operating forecasts) and the probability of achieving the specific targets.

The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the six months ended June 30:

 

Contingent Consideration

 

Contingent Consideration

(in millions)

 

2019

 

 

2018

 

(in millions)20202019

Balance as of January 1

 

$

123

 

 

$

69

 

Balance as of January 1$113  $123  

Business combinations

 

 

29

 

 

 

14

 

Business combinations28  29  

Contingent consideration paid

 

 

(39

)

 

 

(24

)

Contingent consideration paid(17) (39) 

Revaluations included in earnings and foreign currency translation adjustments

 

 

(5

)

 

 

(3

)

Revaluations included in earnings and foreign currency translation adjustments(13) (5) 

Balance as of June 30

 

$

108

 

 

$

56

 

Balance as of June 30$111  $108  

The Company used the following key assumptions when estimating the fair value of contingent considerations:
Unobservable InputWeighted average probability of target achievementRange of potential payment
Revenue target86%0%-100%
EBITDA target96%0%-100%
Operational target97%0%-100%

The current portion of contingent consideration is included within accrued expenses and the long-term portion is included within other liabilities on the accompanying condensed consolidated balance sheets. Revaluations of the contingent
15
Table of contents
consideration are recognized in other expense (income), net on the accompanying condensed consolidated statements of income.

A change in significant unobservable inputs above could result in a significantly higher or lower fair value measurement of contingent consideration.

8. Credit Arrangements

The following is a summary of the Company’s revolving credit facilities at June 30, 2019:

2020:

Facility

Interest Rates

Facility

Interest Rates
$1,500 million (revolving credit facility)

LIBOR in the relevant currency borrowed plus a margin of 1.50%

at June 30, 2019

2020

$25 million (receivables financing facility)

LIBOR Market Index Rate (2.40%(0.16% at June 30, 2019)2020) plus 0.90%

£10 million (approximately $13$12 million) (general banking

facility)

Bank’s base rate of 0.75%0.10% at June 30, 20192020 plus 1%

15

The following table summarizes the Company’s debt at the dates indicated:

(in millions)

 

June 30, 2019

 

 

December 31, 2018

 

(in millions)June 30, 2020December 31, 2019

Senior Secured Credit Facilities:

 

 

 

 

 

 

 

 

Senior Secured Credit Facilities:

Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 3.83%

 

$

791

 

 

$

812

 

Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 1.81%Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 1.81%$749  $770  
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 2.75%Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 2.75%789  —  

Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%

 

 

403

 

 

 

416

 

Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%377  387  

Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 4.33%

 

 

535

 

 

 

535

 

Term B Loan due 2024—Euro LIBOR at average floating rates of 2.75%

 

 

1,331

 

 

 

1,346

 

Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 4.33%

 

 

737

 

 

 

741

 

Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 4.15%

 

 

940

 

 

 

945

 

Term B Loan due 2025—Euro LIBOR at average floating rates of 2.50%

 

 

656

 

 

 

664

 

Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 2.50%Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 2.50%535  535  
Term B Loan due 2024—Euro LIBOR at average floating rates of 2.00%Term B Loan due 2024—Euro LIBOR at average floating rates of 2.00%1,300  1,306  
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.93%Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.93%729  733  
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 2.06%Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 2.06%931  936  
Term B Loan due 2025—Euro LIBOR at average floating rates of 2.00%Term B Loan due 2025—Euro LIBOR at average floating rates of 2.00%642  644  

Revolving Credit Facility due 2023:

 

 

 

 

 

 

 

 

Revolving Credit Facility due 2023:

U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average

floating rates of 3.90%

 

 

—

 

 

 

620

 

5.0% Senior Notes due 2027—U.S. Dollar denominated

 

 

1,100

 

 

 

—

 

5.0% Senior Notes due 2026—U.S. Dollar denominated

 

 

1,050

 

 

 

1,050

 

U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average floating rates of 1.66%U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average floating rates of 1.66%—  154  
Japanese Yen denominated borrowings—Japanese Yen LIBOR at average floating rates of 1.50%Japanese Yen denominated borrowings—Japanese Yen LIBOR at average floating rates of 1.50%—  212  
5.0% Senior Notes due 2027—U.S. Dollar denominated5.0% Senior Notes due 2027—U.S. Dollar denominated1,100  1,100  
5.0% Senior Notes due 2026—U.S. Dollar denominated5.0% Senior Notes due 2026—U.S. Dollar denominated1,050  1,050  

2.875% Senior Notes due 2025—Euro denominated

 

 

478

 

 

 

481

 

2.875% Senior Notes due 2025—Euro denominated472  471  

3.25% Senior Notes due 2025—Euro denominated

 

 

1,621

 

 

 

1,631

 

3.5% Senior Notes due 2024—Euro denominated

 

 

711

 

 

 

715

 

4.875% Senior Notes due 2023—U.S. Dollar denominated

 

 

800

 

 

 

800

 

Receivables financing facility due 2020—U.S. Dollar LIBOR at average

floating rates of 3.30%

 

 

300

 

 

 

300

 

3.25% Senior Notes due 2025—Euro denominated3.25% Senior Notes due 2025—Euro denominated1,600  1,598  
3.5% Senior Notes due 2024—Euro denominated3.5% Senior Notes due 2024—Euro denominated—  701  
2.25% Senior Notes due 2028—Euro denominated2.25% Senior Notes due 2028—Euro denominated809  808  
2.875% Senior Notes due 2028—Euro denominated2.875% Senior Notes due 2028—Euro denominated798  —  
Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.06%Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.06%300  300  

Principal amount of debt

 

 

11,453

 

 

 

11,056

 

Principal amount of debt12,181  11,705  

Less: unamortized discount and debt issuance costs

 

 

(54

)

 

 

(49

)

Less: unamortized discount and debt issuance costs(74) (60) 

Less: current portion

 

 

(100

)

 

 

(100

)

Less: current portion(142) (100) 

Long-term debt

 

$

11,299

 

 

$

10,907

 

Long-term debt$11,965  $11,545  

Contractual maturities of long-term debt are as follows at June 30, 2019:

2020:

(in millions)

 

 

 

 

Remainder of 2019

 

$

50

 

2020

 

 

400

 

2021

 

 

100

 

2022

 

 

100

 

2023

 

 

1,811

 

Thereafter

 

 

8,992

 

 

 

$

11,453

 

16

Table of contents
(in millions)
Remainder of 202071  
2021145  
2022445  
20231,684  
20241,812  
Thereafter8,024  
12,181  
At June 30, 2019,2020, there were bank guarantees totaling approximately £0.9 million (approximately $1.1 million) issued against the availability of the general banking facility.

Senior Secured Credit Facilities

At June 30, 2019,2020, the Company’s Fourth Amended and Restated Credit Agreement, as amended (the “Credit Agreement”)provided financing through several senior secured credit facilities provided financing(collectively, the “senior secured credit facilities”) of up to approximately $6,893 million,$7.6 billion, which consisted of $5,393 million$6.1 billion principal amounts of debt outstanding (as detailed in the table above) and $1,500 million, $1.5 billion of available borrowing capacity on the $1,500 million revolving credit facility.

facility and standby letters of credit.

On March 11, 2020, the Company entered into Amendment No. 7 to the Credit Agreement to borrow $900 million in additional U.S. Dollar denominated term A loans due 2023 (the “TLA-2 Loans”) and, on March 30, 2020, entered into Amendment No. 8 to the Credit Agreement to amend certain terms of the TLA-2 Loans. The TLA-2 Loans bear interest based on the U.S. Dollar LIBOR plus a margin ranging from 1.50% to 2.25%, with a U.S. Dollar LIBOR floor of 1.00% per annum. The proceeds from the TLA-2 Loans were used to repay outstanding revolving credit loans under the Company's senior secured credit facilities. On March 30, 2020, the Company prepaid $100 million of the TLA-2 loans.
Senior Notes

On May 10, 2019,June 24, 2020, IQVIA Inc. (the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and sale of $1.1 billion€711,000,000 in gross proceeds of the Issuer’s 5.00% Senior Notes2.875% senior notes due 20272028 (the “Notes”“2.875% Notes”). The 2.875% Notes were issued pursuant to an Indenture, dated May 10, 2019,June 24, 2020, among the Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors. The net proceeds from the notes offering were used to repay existing borrowings under the Issuer’s revolving credit facility, to pay fees and expenses related to the notes offering and for other general corporate purposes. The2.875% Notes are unsecured obligations of the Issuer, will mature on MayJune 15, 20272028 and bear interest at the rate of 5.00%2.875% per year, with interest payable semi-annuallysemiannually on MayJune 15 and NovemberDecember 15 of each year, beginning on NovemberDecember 15, 2019.2020. The Issuer may redeem the 2.875% Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to MayJune 15, 20222023 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 2.500%1.438% to 0.000%.

16

The proceeds from the 2.875% Notes offering were used to redeem all of the Issuer’s outstanding 3.500% senior notes due 2024 (the “3.500% Notes”), including the payment of premiums in respect thereof, to repay a portion of the existing borrowings under the Issuer’s revolving credit facility and to pay fees and expenses related to the offering. The Issuer’s obligations with respect to the 3.500% Notes were discharged on the same day as the Issuer completed the issuance of the 2.875% Notes, and the 3.500% Notes were redeemed on July 9, 2020.

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 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 term loans, other actions permitted to be taken by a secured creditor. The Company’s long-term debt arrangements contain other usual and customary restrictive covenants that, among other things, place limitations on the Company’s ability to declare dividends. At June 30, 2019,2020, the Company was in compliance with the financial covenants under its debt agreements in all material respects.

respects and does not have material uncertainty about ongoing ability to meet the covenants of the Company's credit arrangements.


17
Table of contents
Based on our current operating plan, and after considering the likely future impacts of COVID-19, we believe that our available cash and cash equivalents, future cash flows from operations and our ability to access funds under our revolving and other credit facilities will enable us to fund our operating requirements and capital expenditures and meet debt obligations for at least the next 12 months.

9. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 1.0 million shares of preferred stock, $0.01 per share par value. NoNaN shares of preferred stock were issued or outstanding as of June 30, 20192020 or December 31, 2018.

2019.

Equity Repurchase Program and Secondary Public Offering

On February 13, 2019,


Since the Company’s Board of Directors increasedCOVID-19 outbreak became a pandemic in March, the stockcompany temporarily suspended share repurchase authorization under a previously approved equity repurchase program (the “Repurchase Program”) by $2.0 billion, which increased the total amount that has been authorized under the Repurchase Program to $7.725 billion since the plan’s inception in October 2013. The Repurchase Program does not obligate the Company to repurchase any particular amount of common stock, and it may be modified, extended, suspended or discontinued at any time.

In March 2019, the Company completed an underwritten secondary public offering of 5,000,000 shares of its common stock held by certain of the Company’s remaining private equity sponsors (the “Selling Stockholders”), of which the Company repurchased 1,000,000 shares for an aggregate purchase price of approximately $140.8 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 Selling Stockholders. Pursuant to an agreement with the underwriters, the Company’s per-share purchase price for repurchased shares was the same as the per-share purchase price payable by the underwriters to the Selling Stockholders.

activity. During the six months ended June 30, 2019,2020, the Company repurchased 2,752,2472,106,403 shares of its common stock for approximately $376.7$321.4 million under the Repurchase Program. These amounts include 1,000,000 shares of our common stock repurchased from certain of the Company’s common stock that it repurchased directly from underwritersstockholders (the “Selling Stockholders”) in connection with the underwritten secondary public offering described above.a private transaction for an aggregate purchase price of approximately $164.3 million. As of June 30, 2019,2020, the Company has remaining authorization to repurchase up to approximately $1.9$1.0 billion 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.

17

10. Business Combinations

The Company completed several immaterial acquisitions during the six months ended June 30, 2019. The Company’s assessment of fair value and the purchase price allocation related to these acquisitions is preliminary and subject to change upon completion. Further adjustments 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). The condensed consolidated financial statements include the results of the acquisitions subsequent to their respective closing dates. Pro forma information is not presented for these acquisitions as the aggregate operations of the acquired businesses were not significant to the overall operations of the Company.

The following table provides certain financial information for these acquisitions, including the preliminary allocation of the purchase price to certain intangible assets acquired and goodwill:

Restructuring

 

 

 

 

Amortization

 

 

 

 

(in millions)

 

 

 

Period

 

2019

 

Total cost of acquisitions, net of cash acquired(1)

 

 

 

 

 

$

236

 

Amounts recorded in the condensed consolidated balance sheets:

 

 

 

 

 

 

 

 

Goodwill

 

 

 

 

 

 

145

 

Portion of goodwill deductible for income tax purposes

 

 

 

 

 

 

98

 

Intangible assets:

 

 

 

 

 

 

 

 

Customer relationships

 

 

 

6-13 years

 

 

59

 

Non-compete agreements

 

 

 

3-5 years

 

 

4

 

Software

 

 

 

3-8 years

 

 

26

 

Trade names

 

 

 

1-8 years

 

 

3

 

Total intangible assets

 

 

 

 

 

$

92

 

(1)

Total cost of acquisitions, net of cash acquired, includes contingent consideration and deferred purchase payments of $35 million.

11. Restructuring

The Company has continued to take restructuring actions in 20192020 to align its resources and reduce overcapacity to adapt to changing market conditions and integrate acquisitions. These actions include closing facilities, consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements. These restructuring actions are expected to continue into 2020. During the first quarter of 2019, there was also a decrease of $9 million in facility exit costs due to the reclassification of restructuring into a long-term operating lease liability related to the implementation of ASC 842, Leases.

2021.

The following amounts were recorded for the restructuring plans:

(in millions)

 

Severance and

Related Costs

 

 

Facility

Exit Costs

 

 

Total

 

(in millions)
Severance and
Related Costs
Facility
Exit Costs
Total

Balance at December 31, 2018

 

$

47

 

 

$

27

 

 

$

74

 

Balance at December 31, 2019Balance at December 31, 2019$64  $3  $67  

Expense, net of reversals

 

 

26

 

 

 

—

 

 

 

26

 

Expense, net of reversals30  —  30  

Payments

 

 

(27

)

 

 

(15

)

 

 

(42

)

Payments(37) (1) (38) 

Foreign currency translation and other

 

 

—

 

 

 

(9

)

 

 

(9

)

Foreign currency translation and other(2) —  (2) 

Balance at June 30, 2019

 

$

46

 

 

$

3

 

 

$

49

 

Balance at June 30, 2020Balance at June 30, 2020$55  $2  $57  

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 that the majority of the restructuring accruals at June 30, 20192020 will be paid in 20192020 and 2020.

18

12.2021.

11. Income Taxes


The effective income tax rate was 10.3%20.0% and 27.3%10.3% in the second quarter of 20192020 and 2018,2019, respectively, and 26.2%15.6% and 24.9%26.2% in the first six months of 2020 and 2019, respectively. The effective income tax rate in the second quarter and 2018,first six months of 2020 and 2019 was favorably impacted as a result of excess tax benefits recognized upon settlement of share-based compensation awards. For the second quarter of 2020 and 2019 this impact was $5 million and $8 million, respectively, and for the first six months of 2020 and 2019 this impact was $26 million and $17 million, respectively. Also, the effective income tax rate in the first six months of 2020 was unfavorably impacted by a $10 million discrete tax expense related to change in the measurement of the U.S. tax on undistributed foreign earnings.

In the first quartersix months of 2019 the U.S. Treasury Department issued final regulations on the transition tax and proposed regulations on Foreign Derived Intangible Income (“FDII”) which the Company has analyzed.. While the final regulations related to the transition tax did not have a material impact on the Company, the proposed guidance foron FDII had an unfavorable impact. Although the proposed
18
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guidance for FDII iswas not authoritative and subject to change in the regulatory review process, the Company reversed a portion of the tax benefit recorded in 2019 by recording a tax expense of $20 million in the first quarter of 2019, as its best estimate offor this impact. In the second quarterJuly of 20192020, the U.S. Treasury Department issued final regulations onregarding FDII and Global Intangible Low TaxedLow-Taxed Income (“GILTI”) which. The Company is in the Company has analyzed and determined did not have a materialprocess of reviewing these regulations to determine if there will be an impact on the Company.

13.effective income tax rate in the subsequent period.

12. Comprehensive Income (Loss)

Below is a summary of the components of AOCI:

(in millions)

 

Foreign

Currency

Translation

 

 

Derivative

Instruments

 

 

Defined

Benefit

Plans

 

 

Income

Taxes

 

 

Total

 

Balance at December 31, 2018

 

$

(419

)

 

$

(1

)

 

$

19

 

 

$

177

 

 

$

(224

)

Other comprehensive income (loss) before

   reclassifications

 

 

39

 

 

 

(23

)

 

 

—

 

 

 

(3

)

 

 

13

 

Reclassification adjustments

 

 

—

 

 

 

(5

)

 

 

—

 

 

 

1

 

 

 

(4

)

Balance at June 30, 2019

 

$

(380

)

 

$

(29

)

 

$

19

 

 

$

175

 

 

$

(215

)

(in millions)
Foreign
Currency
Translation
Derivative
Instruments
Defined
Benefit
Plans
Income
Taxes
Total
Balance at December 31, 2019$(430) $(21) $(16) $156  $(311) 
Other comprehensive income (loss) before reclassifications(111) (43) —  17  (137) 
Reclassification adjustments—  5  —  (1) 4  
Balance at June 30, 2020$(541) $(59) $(16) $172  $(444) 

Below is a summary of the adjustments for (gains) losses reclassified from AOCI into the condensed consolidated statements of income and the affected financial statement line item:

 

Affected Financial Statement

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in millions)(in millions)
Affected Financial Statement
Line Item
Three Months Ended June 30,Six Months Ended June 30,

 

Line Item

 

2019

 

 

2018

 

 

2019

 

 

2018

 

2020201920202019

Derivative instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments:

Foreign exchange forward

contracts

 

Revenues

 

$

—

 

 

$

(1

)

 

$

1

 

 

$

(3

)

Foreign exchange forward contractsRevenues$3  $—  $5  $1  

Foreign exchange forward

contracts

 

Other expense (income), net

 

 

(3

)

 

 

—

 

 

 

(6

)

 

 

4

 

Foreign exchange forward contractsOther expense (income), net(14) (3) —  (6) 

Total before income taxes

 

 

 

 

(3

)

 

 

(1

)

 

 

(5

)

 

 

1

 

Total before income taxes(11) (3) 5  (5) 

Income tax (benefit)

expense

 

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

1

 

Income tax (benefit) expense1  —  1  (1) 

Total net of income taxes

 

 

 

$

(3

)

 

$

(1

)

 

$

(4

)

 

$

—

 

Total net of income taxes$(12) $(3) $4  $(4) 

19

14.


13. Segments

The following table presents the Company’s operations by reportable segment. The Company is managed through three3 reportable segments, Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical Solutions.Solutions. Technology & Analytics Solutions provides mission-critical information, technology solutions and real-world insights and services to the Company’s life sciences customers. Research & Development Solutions, which primarily serves biopharmaceutical customers, provides outsourced clinical research and clinical trial related services. Contract Sales & Medical Solutions provides health care provider (including contract sales) and patient engagement services to both biopharmaceutical customers and the broader healthcare market.

Certain costs are not allocated to the Company’s segments and are reported as general corporate and unallocated expenses. These costs primarily consist of stock-based compensation and expenses related to integration activities and acquisitions. The Company also does not allocate depreciation and amortization or impairment charges to its segments. Prior period segment results have been recast to conform to changes to management reporting in 2019. The recast impacts the allocation of selling, general and administrative expenses for 2018. Asset information by segment is not presented, as this measure is not used by the chief operating decision maker to assess the Company’s performance. The Company’s reportable segment information is presented below:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology & Analytics Solutions

 

$

1,102

 

 

$

1,011

 

 

$

2,177

 

 

$

1,996

 

Research & Development Solutions

 

 

1,435

 

 

 

1,350

 

 

 

2,851

 

 

 

2,715

 

Contract Sales & Medical Solutions

 

 

203

 

 

 

206

 

 

 

396

 

 

 

419

 

Total revenues

 

 

2,740

 

 

 

2,567

 

 

 

5,424

 

 

 

5,130

 

Costs of revenue, exclusive of depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology & Analytics Solutions

 

 

656

 

 

 

582

 

 

 

1,289

 

 

 

1,129

 

Research & Development Solutions

 

 

971

 

 

 

921

 

 

 

1,917

 

 

 

1,844

 

Contract Sales & Medical Solutions

 

 

172

 

 

 

171

 

 

 

341

 

 

 

353

 

Total costs of revenue

 

 

1,799

 

 

 

1,674

 

 

 

3,547

 

 

 

3,326

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology & Analytics Solutions

 

 

188

 

 

 

186

 

 

 

372

 

 

 

368

 

Research & Development Solutions

 

 

176

 

 

 

174

 

 

 

357

 

 

 

348

 

Contract Sales & Medical Solutions

 

 

15

 

 

 

17

 

 

 

30

 

 

 

35

 

General corporate and unallocated

 

 

57

 

 

 

47

 

 

 

96

 

 

 

93

 

Total selling, general and administrative expenses

 

 

436

 

 

 

424

 

 

 

855

 

 

 

844

 

Segment profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology & Analytics Solutions

 

 

258

 

 

 

243

 

 

 

516

 

 

 

499

 

Research & Development Solutions

 

 

288

 

 

 

255

 

 

 

577

 

 

 

523

 

Contract Sales & Medical Solutions

 

 

16

 

 

 

18

 

 

 

25

 

 

 

31

 

Total segment profit

 

 

562

 

 

 

516

 

 

 

1,118

 

 

 

1,053

 

General corporate and unallocated

 

 

(57

)

 

 

(47

)

 

 

(96

)

 

 

(93

)

Depreciation and amortization

 

 

(294

)

 

 

(282

)

 

 

(589

)

 

 

(564

)

Restructuring costs

 

 

(14

)

 

 

(17

)

 

 

(26

)

 

 

(43

)

Total income from operations

 

$

197

 

 

$

170

 

 

$

407

 

 

$

353

 

19

Table of contents
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Revenues
Technology & Analytics Solutions$1,109  $1,102  $2,226  $2,177  
Research & Development Solutions1,235  1,435  2,676  2,851  
Contract Sales & Medical Solutions177  203  373  396  
Total revenues2,521  2,740  5,275  5,424  
Costs of revenue, exclusive of depreciation and amortization
Technology & Analytics Solutions655  656  1,321  1,289  
Research & Development Solutions898  971  1,886  1,917  
Contract Sales & Medical Solutions151  172  321  341  
Total costs of revenue1,704  1,799  3,528  3,547  
Selling, general and administrative expenses
Technology & Analytics Solutions178  188  361  372  
Research & Development Solutions175  176  360  357  
Contract Sales & Medical Solutions15  15  30  30  
General corporate and unallocated63  57  87  96  
Total selling, general and administrative expenses431  436  838  855  
Segment profit
Technology & Analytics Solutions276  258  544  516  
Research & Development Solutions162  288  430  577  
Contract Sales & Medical Solutions11  16  22  25  
Total segment profit449  562  996  1,118  
General corporate and unallocated(63) (57) (87) (96) 
Depreciation and amortization(308) (294) (624) (589) 
Restructuring costs(16) (14) (30) (26) 
Total income from operations$62  $197  $255  $407  


20

15.

Table of contents
14. Earnings Per Share

The following table presents 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 or the effect of including such stock-based awards in the computation would be anti-dilutive:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Shares subject to performance conditions

 

 

1.3

 

 

 

0.9

 

 

 

1.3

 

 

 

0.8

 

Shares subject to performance conditions1.1  1.3  1.2  1.3  

Shares subject to anti-dilutive stock-based awards

 

 

1.1

 

 

 

1.7

 

 

 

0.8

 

 

 

1.4

 

Shares subject to anti-dilutive stock-based awards1.8  1.1  1.4  0.8  
Dilutive shares excluded from dilutive earnings per shareDilutive shares excluded from dilutive earnings per share3.3  —  —  —  

Total shares excluded from diluted earnings per share

 

 

2.4

 

 

 

2.6

 

 

 

2.1

 

 

 

2.2

 

Total shares excluded from diluted earnings per share6.2  2.4  2.6  2.1  

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.


For the quarter ended June 30, 2020, all potentially dilutive securities were excluded from the diluted earnings per share calculation because the Company incurred a net loss for this period and their inclusion would be anti-dilutive.

21

Table of contents

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

Cautionary Statement for Forward-Looking Information

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20182019 (our “2018“2019 Form 10-K”).

In addition to historical condensed consolidated financial information, the following discussion contains or incorporates by reference forward-looking statements within the meaning of the federal securities laws that are not historical facts but reflect, among other things, our current expectations and 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 “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “forecasts,” “projects,” “should,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. We assume no obligation to update any such forward-looking information to reflect actual results or changes in our outlook or the factors affecting such forward-looking information.


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, thatbusiness disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) outbreak or international conflict or other disruptions outside of our control; our ability to accurately model or forecast the impact of the spread and/or containment of COVID-19, among other sources of business interruption, on our operations and financial results; 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 maintain large customers contracts or to enter into new contracts; 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; the historical indications of the relationship of our backlog to revenues may not be indicative of their future relationship; we may be unable to maintain our information systems or effectively update or protect them; customer or therapeutic concentration could harm our business; our business is subject to risks associated with international operations, including economic, political and other risks, such as compliance with a myriad of laws and regulations, complications from conducting clinical trials in multiple countries simultaneously and changes in exchange rates; 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 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 revenue; 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 scope of prescription 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 may be unableoperate, including financial market conditions and risks related to sales to government entities; the impact of changes in tax laws and regulations; and our ability to successfully developintegrate, and market new services or enter new markets;achieve expected benefits from, our failure to perform services in accordance with contractual requirements, regulatory standards and ethical considerations may subject us to significant costs or liability, which could also damage our reputation and cause us to lose existing business or not receive new business; our services are related to treatment of human patients, and we could face liability if a patient is harmed; we may be unable to successfully identify, acquire and integrate businesses, services and technologies; our investments in our customers’ businesses or drugs and our related commercial rights strategies could have a negative impact on our financial performance; we face risks arising from the restructuring of our operations; our restructuring plans may not result in the annualized cost savings we expect; and we have substantial indebtedness and may incur additional indebtedness in the future, which could adversely affect our financial condition.acquired businesses. For a further discussion of the risks relating to our business, see Part I—Item 1A—“Risk Factors” in our Annual Report on2019 Form 10-K, for the fiscal year ended December 31, 2018, as updated in thisour Quarterly Report on Form 10-Q.

10-Q for the quarter ended March 31, 2020 (the “1Q 2020 Form 10-Q”).

Overview

IQVIA Holdings Inc. (“IQVIA,” the “Company,” “we,” “our” and/or “us”) is a is a leading global provider of advanced analytics, technology solutions and contract research services to the life sciences industry. We applyIQVIA applies human data science – leveraging the analytic rigor and clarity of data science to the ever-expanding scope of human science – to enable companies to reimagine and develop new approaches to clinical development and commercialization, speed innovation, and accelerate improvements in healthcare outcomes. Powered by the IQVIA CORE™, we deliver unique and actionable insights at the intersection of large-scalelarge scale analytics, transformative technology and extensive domain expertise as well as execution capabilities. With approximately 61,00067,000 employees, we conduct operations in more than 100 countries.
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Table of contents

We manage our business through three reportable segments, Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical Solutions. Technology & Analytics Solutions provides critical information, technology solutions and real-world insights and services to our life science customers. Research & Development Solutions, which primarily serves biopharmaceutical customers, is engaged in research and development and provides clinical research and clinical trial services. Contract Sales & Medical Solutions provides contract sales to both biopharmaceutical customers and the broader healthcare market.


Recent Developments

As a result of the global spread of COVID-19 beginning in early March, we began to experience general business disruptions that impeded normal business activity including our ability to perform on-site monitoring, deliver offerings that rely on face-to-face interaction or in-person gatherings and execute sale of information offerings, analytics and consulting projects.
These disruptions have impacted all three of our reportable segments, with a disproportionate impact to our Research & Development Solutions business. During the second quarter, global site access improved from approximately 20 percent in April to 40 percent at the end of June. The average site accessibility for the second quarter was approximately 30 percent. These limitations on site accessibility impacted patient recruitment, patient study participation, and our ability to travel and access clinical research sites which resulted in reduced sample volumes in our clinical trial laboratory and research services business, all of which had a direct impact on revenue. We were able to implement remote and risk-based monitoring as a partial offset to these impacts. Additionally, new trial start-up activities have been delayed as a result of these sites being inaccessible; however, the Company has not experienced any material COVID-19 related trial cancellations. Patient recruitment for new trials has improved, but it still remains slightly above 25 percent of historical levels. Similarly, in our Technology & Analytics Solutions segment, the portion of our Real-World business that requires site monitoring activity also experienced limitations on site accessibility, which led to a reduction in the associated revenue. During the second quarter we had access to 70 percent of our global Real-World sites, on average. Further, certain of our aforementioned Technology & Analytics Solutions offerings that rely on face-to-face interactions or are dependent on in-person gatherings, events or conferences experienced significant disruption, and where we were unable to execute on our commitments due to COVID-19, we were not able to recognize the associated revenue in the period. During the second quarter, the sale of information offerings, analytics and consulting projects have resumed as clients have adjusted to working virtually. Activity within the Contract Sales and Medical Solutions business has also become more challenging due to a decline in sales rep visits, and physician attention diverted to the COVID-19 crisis.

We have accelerated and expanded a variety of cost containment actions to reduce the impact to profitability. We have activated business continuity plans, including remote delivery capabilities in technology and analytics, remote monitoring and virtual trials in Research & Development Solutions and virtual commercial activity with clients wherever possible. We anticipate an acceleration of business momentum when the crisis subsides as delayed trial activities will still need to be performed.

The Company continues to maintain strong liquidity. We do not expect COVID-19 to have a significant impact on our overall liquidity position and outlook. As of June 30, 2020, cash and cash equivalents were $1,109 million and the Company had no amounts drawn under its $1.5 billion revolving credit facility. At June 30, 2020, the Company was in compliance with the financial covenants under its debt agreements in all material respects and does not have material uncertainty about ongoing ability to meet the covenants of our credit arrangements.

To help ensure the safety and well-being of our employees, customers, partners and the broader community and continuity of our business operations, we continue to monitor health authority guidance on mitigating the spread of COVID-19 and managing positive cases. We manage our response to the pandemic through a combination of enterprise-wide and regional governance teams, with particular focus on the medical and scientific, information technology, human capital and financial impacts of the pandemic on our business. These teams met, and continue to meet, regularly as necessary based on the status of the pandemic. We closely monitor the impact of COVID-19 on our operations and report to our Board regularly on the progress of our response to the COVID-19 outbreak. We have established global workplace protocols that govern the return of our employees to our offices.
Sources of Revenue

Total revenues are comprised of revenues from the provision of our services. We do not have material product revenues.

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Costs and Expenses

Our costs and expenses are comprised primarily of our costs of revenue, which include reimbursed expenses, and selling, general and administrative expenses. Costs of revenue include compensation and benefits for billable employees and personnel involved in production, 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; costs related to facilities; costs related to training and expenses for information technology (“IT”), reimbursed expenses that are comprised principally of payments to investigators who oversee clinical trials and travel expenses for our clinical monitors and sales representatives; and other expenses directly related to service contracts such as courier fees, laboratory supplies, professional services and travel expenses. Selling, general and administrative expenses include costs related to sales, marketing, and administrative functions (including human resources, legal, finance and general management) for compensation and benefits, travel, professional services, facilities and training and expenses for IT.

Foreign Currency Translation

In the first six months of 2019,2020, approximately 40%35% 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 and our financial statements are reported in United States dollars, changes in foreign currency exchange rates can significantly affect our results of operations. The revenue 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 condensed consolidated results. As a result, we believe that reporting results of operations that exclude the effects of foreign currency rate fluctuations on certain financial results can facilitate analysis of period-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.

Consolidated Results of Operations

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

Revenues

 

Three Months Ended June 30,

 

 

Change

 

Three Months Ended June 30,Change

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

(in millions)20202019$%

Revenues

 

$

2,740

 

 

$

2,567

 

 

$

173

 

 

 

6.7

%

Revenues$2,521  $2,740  $(219) (8.0)%

For the second quarter of 2019,2020, our revenues increased $173decreased $219 million, or 6.7%8.0%, as compared to the same period in 2018.2019. This increasedecrease was comprised of constant currency revenue growthdecline of approximately $218$194 million, or 8.5%, offset by the negative impact of approximately $45 million from the effects of foreign currency fluctuations.7.1%. The constant currency revenue growthdecline was comprised of a $115$191 million increase in Technology & Analytics Solutions, a $101 million increasedecrease in Research & Development Solutions and a $2$25 million increasedecrease in Contract Sales & Medical Solutions, offset by a $22 million increase in Technology & Analytics Solutions.

 

 

Six Months Ended June 30,

 

 

Change

 

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

Revenues

 

$

5,424

 

 

$

5,130

 

 

$

294

 

 

 

5.7

%


Six Months Ended June 30,Change
(in millions)20202019$%
Revenues$5,275  $5,424  $(149) (2.7)%
For the first six months of 2019,2020, our revenues increased $294decreased $149 million, or 5.7%2.7%, as compared to the same period in 2018.2019. This increasedecrease was comprised of constant currency revenue growthdecline of approximately $402$96 million, or 7.8%, offset by the negative impact of approximately $108 million from the effects of foreign currency fluctuations.1.8%. The constant currency revenue growthdecline was comprised of a $242$157 million increase in Technology & Analytics Solutions and a $173 million increasedecrease in Research & Development Solutions offset byand a $13$20 million decrease in Contract Sales & Medical Solutions.

23

Solutions, offset by a $81 million increase in Technology & Analytics Solutions.
See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the impact from COVID-19 on our business activity.


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Costs of Revenue, exclusive of Depreciation and Amortization

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Costs of revenue, exclusive of depreciation

and amortization

 

$

1,799

 

 

$

1,674

 

 

$

3,547

 

 

$

3,326

 

Costs of revenue, exclusive of depreciation and amortization$1,704  $1,799  $3,528  $3,547  

% of revenues

 

 

65.7

%

 

 

65.2

%

 

 

65.4

%

 

 

64.8

%

% of revenues67.6 %65.7 %66.9 %65.4 %

The $125$95 million increasedecrease in costs of revenues, exclusive of depreciation and amortization, for the three months ended June 30, 20192020 as compared to the same period in 20182019 included a constant currency increasedecrease of approximately $168$61 million, or 10.0%, and a positive impact of approximately $43 million from the effects of foreign currency fluctuations.3.4%. The constant currency increasedecrease consisted of a $90$52 million decrease in Research & Development Solutions and a $19 million decrease in Contract Sales & Medical Solutions, offset by a $10 million increase in Technology & Analytics Solutions a $74.
The $19 million increase in Research & Development Solutions and a $4 million increase in Contract Sales & Medical Solutions.

The $221 million increasedecrease in costs of revenues, exclusive of depreciation and amortization, for the six months ended June 30, 20192020 as compared to the same period in 20182019 included a constant currency increase of approximately $319$43 million, or 9.6%, and a positive impact of approximately $98 million from the effects of foreign currency fluctuations.1.2%. The constant currency increase consisted of a $196$51 million increase in Technology & Analytics Solutions and a $127$9 million increase in Research & Development Solutions offset by a $17 million decrease in Contract Sales & Medical Solutions.

Selling, General and Administrative Expenses
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Selling, general and administrative expenses$431  $436  $838  $855  
% of revenues17.1 %15.9 %15.9 %15.8 %
The $5 million decrease in selling, general and administrative expenses for the three months ended June 30, 2020 as compared to the same period in 2019 included a constant currency increase of approximately $5 million, or 1.1%. The constant currency increase primarily consisted of a $7 million increase in general corporate and unallocated expenses and a $2 million increase in Research & Development Solutions, offset by a $4 million decrease in Contract Sales & Medical Solutions.

Selling, General and Administrative Expenses

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Selling, general and administrative expenses

 

$

436

 

 

$

424

 

 

$

855

 

 

$

844

 

% of revenues

 

 

15.9

%

 

 

16.5

%

 

 

15.8

%

 

 

16.5

%

The $12 million increase in selling, general and administrative expenses for the three months ended June 30, 2019 as compared to the same period in 2018 included a constant currency increase of approximately $24 million, or 5.7%, and a positive impact of approximately $12 million from the effects of foreign currency fluctuations. The constant currency increase primarily consisted of a $8 million increase in Technology & Analytics Solutions, a $5Solutions.

The $17 million increase in Research & Development Solutions and a $12 million increase in general corporate and unallocated expenses offset by a $1 million decrease in Contract Sales & Medical Solutions.

The $11 million increase in selling, general and administrative expenses for the six months ended June 30, 20192020 as compared to the same period in 20182019 included a constant currency increasedecrease of approximately $42$2 million, or 5.0 %, and a positive impact of approximately $31 million from the effects of foreign currency fluctuations.0.2 %. The constant currency increasedecrease primarily consisted of a $20$7 million increasedecrease in general corporate and unallocated expenses, a $3 million decrease in Technology & Analytics Solutions, offset by a $19$8 million increase in Research & Development Solutions and a $7 million increase in general corporate and unallocated expenses offset by a $4 million decrease in Contract Sales & Medical Solutions.

Depreciation and Amortization

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Depreciation and amortization

 

$

294

 

 

$

282

 

 

$

589

 

 

$

564

 

Depreciation and amortization308  294  624  589  

% of revenues

 

 

10.7

%

 

 

11.0

%

 

 

10.9

%

 

 

11.0

%

% of revenues12.2 %10.7 %11.8 %10.9 %


The $12$14 million and $25$35 million increaseincreases in depreciation and amortization in the three and six months ended June 30, 2019,2020, respectively, as compared to the same periods in 2018, were2019 was primarily due to higher intangible asset balances as a result of acquisitions occurring in 20182019, increased amortization due to higher capitalized software balances, and 2019 offset by a decrease from foreign currency fluctuations.

24

accelerated depreciation on an internal-use software asset in the first quarter of 2020.

Restructuring Costs

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Restructuring costs

 

$

14

 

 

$

17

 

 

$

26

 

 

$

43

 

Restructuring costs$16  $14  $30  $26  

The restructuring costs incurred during 20192020 were due to ongoing efforts to streamline our global operations. The remaining actions under these plans are expected to occur throughout 20192020 and into 20202021 and are expected to consist of consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements.


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Table of contents
Interest Income and Interest Expense

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Interest income

 

$

(2

)

 

$

(1

)

 

$

(4

)

 

$

(3

)

Interest income$(1) $(2) $(3) $(4) 

Interest expense

 

$

114

 

 

$

107

 

 

$

224

 

 

$

203

 

Interest expense$108  $114  $214  $224  

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


Interest expense during the three and six months ended June 30, 20192020 was higherlower than the same periodperiods in 20182019 due to lower interest rates attributed to lower LIBOR rates and the redemption of the $800 million of 4.875% senior notes due 2023, partially offset by an increase in the average debt outstanding, primarily as a result of the June 2018 issuance of $1.63 billion of additional term B loans. 

outstanding.

Loss on Extinguishment of Debt

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Loss on extinguishment of debt

 

$

—

 

 

$

2

 

 

$

—

 

 

$

2

 


Three Months Ended June 30,Six Months Ended June 30,
(in millions)2020201920202019
Loss on extinguishment of debt$12  $—  $12  $—  
During the second quarter of 2018,2020, we recognized loss on extinguishment of debt for fees and expenses incurred related to the refinancing of our 3.500% senior secured credit facilities of $2 million.

notes due 2024.

Other (Income) Expense (Income), Net

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Other expense (income), net

 

$

7

 

 

$

(26

)

 

$

—

 

 

$

(22

)

Other (income) expense, netOther (income) expense, net$(32) $7  $(45) $—  

Other expense (income),income, net for the three and six months ended June 30, 20192020 increased as compared to the same periodperiods in the prior year, primarily asdue to a resultdecrease in fair value of acquisition-related contingent consideration, mark-to-market gains on equity securities, a decrease in foreign currency losses, in 2019 rather than the foreign currency gains that occurred in 2018, partially offset by gainsand a gain on investments recognized in the first three months of 2019 that did not occur in 2018.

mutual funds.

Income Tax Expense

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Income tax expense

 

$

8

 

 

$

24

 

 

$

49

 

 

$

43

 

Income tax expense$(5) $8  $12  $49  


Our effective income tax rate was 10.3%20.0% and 27.3%10.3% in the second quarter of 20192020 and 2018,2019, respectively, and 26.2%15.6% and 24.9%26.2% in the first six months of 2020 and 2019, respectively. Our effective income tax rate in the second quarter and 2018,first six months of 2020 and 2019 was favorably impacted as a result of excess tax benefits recognized upon settlement of share-based compensation awards. For the second quarter of 2020 and 2019, this impact was $5 million and $8 million, respectively, and for the first six months of 2020 and 2019, this impact was $26 million and $17 million, respectively. Also, our effective income tax rate in the first six months of 2020 was unfavorably impacted by a $10 million discrete tax expense related to a change in the measurement of the U.S. tax on undistributed foreign earnings.

In the first quartersix months of 2019, the U.S. Treasury Department issued final regulations on the transition tax and proposed regulations on Foreign Derived Intangible Income (“FDII”) which we analyzed.. While the final regulations related to the transition tax did not have a material impact on us, the proposed guidance foron FDII had an unfavorable impact. Although the proposed guidance for FDII iswas not authoritative and subject to change in the regulatory review process, we reversed a portion of the tax benefit recorded in 2019 by recording a tax expense of $20 million in the first quarter of 2019, as our best estimate offor this impact. In the second quarterJuly of 20192020, the U.S. Treasury Department issued final regulations onregarding FDII and Global Intangible Low TaxedLow-Taxed Income (“GILTI”) which we have analyzed and determined did not have a material. We are in the process of reviewing these regulations to determine if there will be an impact on us.

25

the effective income tax rate in the subsequent period.

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Table of contents
Equity in Earnings of Unconsolidated Affiliates

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Equity in earnings of unconsolidated affiliates

 

$

1

 

 

$

4

 

 

$

—

 

 

$

11

 

Equity in (loss) earnings of unconsolidated affiliatesEquity in (loss) earnings of unconsolidated affiliates$(1) $1  $5  $—  

Equity in earnings of unconsolidated affiliates for the three and six months ended June 30, 20192020 decreased as compared to the same periodsperiod in the prior year, primarily related to losses from our investment in unconsolidated affiliates.
Equity in earnings of unconsolidated affiliates for the six months ended June 30, 2020 increased as a result ofcompared to the same period in the prior year, primarily related to higher earnings from our investment in NovaQuest Pharma Opportunities Fund III that were recognized in 2018 that did not reoccur in 2019.

III.

Net Income Attributable to Non-controlling Interests

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Three Months Ended June 30,Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Net income attributable to non-controlling interests

 

$

(11

)

 

$

(7

)

 

$

(20

)

 

$

(11

)

Net income attributable to non-controlling interests$(2) $(11) $(11) $(20) 

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

Segment Results of Operations

The Company’s revenues and profit by segment are as follows:

Three Months Ended June 30, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2020 and 2019Three Months Ended June 30, 2020 and 2019

 

Segment Revenues

 

 

Segment Profit

 

Segment RevenuesSegment Profit

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

(in millions)2020201920202019

Technology & Analytics Solutions

 

$

1,102

 

 

$

1,011

 

 

$

258

 

 

$

243

 

Technology & Analytics Solutions$1,109  $1,102  $276  $258  

Research & Development Solutions

 

 

1,435

 

 

 

1,350

 

 

 

288

 

 

 

255

 

Research & Development Solutions1,235  1,435  162  288  

Contract Sales & Medical Solutions

 

 

203

 

 

 

206

 

 

 

16

 

 

 

18

 

Contract Sales & Medical Solutions177  203  11  16  

Total

 

 

2,740

 

 

 

2,567

 

 

 

562

 

 

 

516

 

Total2,521  2,740  449  562  

General corporate and unallocated

 

 

 

 

 

 

 

 

 

 

(57

)

 

 

(47

)

General corporate and unallocated(63) (57) 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

(294

)

 

 

(282

)

Depreciation and amortization(308) (294) 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

(14

)

 

 

(17

)

Restructuring costs(16) (14) 

Consolidated

 

$

2,740

 

 

$

2,567

 

 

$

197

 

 

$

170

 

Consolidated$2,521  $2,740  $62  $197  

Six Months Ended June 30, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues

 

 

Segment Profit

 

(in millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Technology & Analytics Solutions

 

$

2,177

 

 

$

1,996

 

 

$

516

 

 

$

499

 

Research & Development Solutions

 

 

2,851

 

 

 

2,715

 

 

 

577

 

 

 

523

 

Contract Sales & Medical Solutions

 

 

396

 

 

 

419

 

 

 

25

 

 

 

31

 

Total

 

 

5,424

 

 

 

5,130

 

 

 

1,118

 

 

 

1,053

 

General corporate and unallocated

 

 

 

 

 

 

 

 

 

 

(96

)

 

 

(93

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

(589

)

 

 

(564

)

Restructuring costs

 

 

 

 

 

 

 

 

 

 

(26

)

 

 

(43

)

Consolidated

 

$

5,424

 

 

$

5,130

 

 

$

407

 

 

$

353

 

Six Months Ended June 30, 2020 and 2019
Segment RevenuesSegment Profit
(in millions)2020201920202019
Technology & Analytics Solutions$2,226  $2,177  $544  $516  
Research & Development Solutions2,676  2,851  430  577  
Contract Sales & Medical Solutions373  396  22  25  
Total5,275  5,424  996  1,118  
General corporate and unallocated(87) (96) 
Depreciation and amortization(624) (589) 
Restructuring costs(30) (26) 
Consolidated$5,275  $5,424  $255  $407  
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 related to integration activities and acquisitions. We also do not allocate depreciation and amortization or impairment charges to our segments. Prior period segment results have been recast to conform to changes to management reporting in 2019. The recast impacts the allocation
27
Table of selling, general and administrative expenses for 2018.contents

26

Technology & Analytics Solutions
Three Months Ended June 30,Change
(in millions)20202019$%
Revenues$1,109  $1,102  $7  0.6  
Costs of revenue, exclusive of depreciation and amortization655  656  (1) (0.2) 
Selling, general and administrative178  188  (10) (5.3) 
Segment profit$276  $258  $18  7.0  

 

Three Months Ended June 30,

 

 

Change

 

Six Months Ended June 30,Change

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

(in millions)20202019$%

Revenues

 

$

1,102

 

 

$

1,011

 

 

$

91

 

 

 

9.0

%

Revenues$2,226  $2,177  $49  2.3  

Costs of revenue, exclusive of depreciation and amortization

 

 

656

 

 

 

582

 

 

 

74

 

 

 

12.7

 

Costs of revenue, exclusive of depreciation and amortization1,321  1,289  32  2.5  

Selling, general and administrative

 

 

188

 

 

 

186

 

 

 

2

 

 

 

1.1

 

Selling, general and administrative361  372  (11) (3.0) 

Segment profit

 

$

258

 

 

$

243

 

 

$

15

 

 

 

6.2

%

Segment profit$544  $516  $28  5.4  

 

 

Six Months Ended June 30,

 

 

Change

 

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

Revenues

 

$

2,177

 

 

$

1,996

 

 

$

181

 

 

 

9.1

%

Costs of revenue

 

 

1,289

 

 

 

1,129

 

 

 

160

 

 

 

14.2

 

Selling, general and administrative

 

 

372

 

 

 

368

 

 

 

4

 

 

 

1.1

 

Segment profit

 

$

516

 

 

$

499

 

 

$

17

 

 

 

3.4

%

Revenues

Revenues

Technology & Analytics Solutions’ revenues were $1,102$1,109 million for the second quarter of 2019, an2020, a increase of $91$7 million, or 9.0%0.6%, over the same period in 2018.2019. This increase was comprised of constant currency revenue growth of approximately $115$22 million, or 11.4%, and a negative impact of approximately $24 million from the effects of foreign currency fluctuations.

2.0%.


Technology & Analytics Solutions’ revenues were $2,177$2,226 million for the first six months of 2019,2020, an increase of $181$49 million, or 9.1%2.3%, over the same period in 2018.2019. This increase was comprised of constant currency revenue growth of approximately $242$81 million, or 12.1%, and a negative impact of approximately $61 million from the effects of foreign currency fluctuations.

3.7%.


The constant currency growth for both the three and six months ended June 30, 20192020 resulted primarily from revenue growth in the Americas region as well as the Europe and Africa region. The revenue growth in these regionsthis region was driven by higher real-world and analytical services as well as incremental revenueservices. See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the impact from acquisitions.

COVID-19 on Technology & Analytics Solutions business activity.

Costs of Revenue, exclusive of Depreciation and Amortization

Technology & Analytics Solutions’ costs of revenue decreased $1 million, or 0.2%, in the second quarter of 2020 over the same period in 2019. This decrease included a constant currency increase of approximately $10 million, or 1.5%.
Technology & Analytics Solutions’ costs of revenue increased $74$32 million, or 12.7%2.5%, in the second quarterfirst six months of 20192020 over the same period in 2018.2019. This increase included a constant currency increase of approximately $90$51 million, or 15.5%, and a positive impact of approximately $16 million from the effects of foreign currency fluctuations.

Technology & Analytics Solutions’ costs of revenue increased $160 million, or 14.2%, in the first six months of 2019 over the same period in 2018. This increase included a constant currency increase of approximately $196 million, or 17.4%, and a positive impact of approximately $36 million from the effects of foreign currency fluctuations.

4.0%.

The constant currency increase for both the three and six months ended June 30, 20192020 was primarily due to an increase in compensation and related expenses from higher headcount to support revenue growth and incremental costs from acquisitions.

growth.

Selling, General and Administrative Expenses

Technology & Analytics Solutions’ selling, general and administrative expenses increased $2decreased $10 million, or 1.1%5.3%, in the second quarter of 20192020 as compared to the same period in 2018,2019, which included a constant currency increasedecrease of approximately $8$4 million, or 4.3%, and a positive impact of approximately $6 million from the effects of foreign currency fluctuations.

2.1%.

Technology & Analytics Solutions’ selling, general and administrative expenses increased $4decreased $11 million, or 1.1%3.0%, in the first six months of 20192020 as compared to the same period in 2018,2019, which included a constant currency increasedecrease of approximately $20$3 million, or 5.4%, and a positive impact of approximately $16 million from the effects of foreign currency fluctuations.

0.8%.

The constant currency increasedecrease for both the three and six months ended June 30, 20192020 was primarily related to an increase in compensation and related expenses from higher headcount to support growth and incremental costs from acquisitions.

27

cost saving initiatives.
28

Table of contents
Research & Development Solutions
Three Months Ended June 30,Change
(in millions)20202019$%
Revenues$1,235  $1,435  $(200) (13.9)%
Costs of revenue, exclusive of depreciation and amortization898  971  (73) (7.5)%
Selling, general and administrative expenses175  176  (1) (0.6)%
Segment profit$162  $288  $(126) (43.8)%

 

Three Months Ended June 30,

 

 

Change

 

Six Months Ended June 30,Change

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

(in millions)20202019$%

Revenues

 

$

1,435

 

 

$

1,350

 

 

$

85

 

 

 

6.3

%

Revenues$2,676  $2,851  $(175) (6.1)%

Costs of revenue, exclusive of depreciation and amortization

 

 

971

 

 

 

921

 

 

 

50

 

 

 

5.4

 

Costs of revenue, exclusive of depreciation and amortization1,886  1,917  (31) (1.6)%

Selling, general and administrative expenses

 

 

176

 

 

 

174

 

 

 

2

 

 

 

1.1

 

Selling, general and administrative expenses360  357  3  0.8 %

Segment profit

 

$

288

 

 

$

255

 

 

$

33

 

 

 

12.9

%

Segment profit$430  $577  $(147) (25.5)%

 

 

Six Months Ended June 30,

 

 

Change

 

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

Revenues

 

$

2,851

 

 

$

2,715

 

 

$

136

 

 

 

5.0

%

Costs of revenue

 

 

1,917

 

 

 

1,844

 

 

 

73

 

 

 

4.0

 

Selling, general and administrative expenses

 

 

357

 

 

 

348

 

 

 

9

 

 

 

2.6

 

Segment profit

 

$

577

 

 

$

523

 

 

$

54

 

 

 

10.3

%

Backlog

Backlog

Research & Development Solutions’ contracted backlog increased from $17.13$19.0 billion at December 31, 20182019 to $18.03$20.5 billion at June 30, 20192020 and we expect approximately $4.9$5.4 billion of this backlog to convert to revenue in the next twelve months.

Revenues

Research & Development Solutions’ revenues were $1,435$1,235 million in the second quarter of 2019, an increase2020, a decrease of $85$200 million, or 6.3%13.9%, over the same period in 2018.2019. This increasedecrease was comprised of constant currency revenue growthdecline of approximately $101$191 million, or 7.5%, and a negative impact of approximately $16 million from the effects of foreign currency fluctuations.

13.3%.

Research & Development Solutions’ revenues were $2,851$2,676 million in the first six months of 2019, an increase2020, a decrease of $136$175 million, or 5.0%6.1%, over the same period in 2018.2019. This increasedecrease was comprised of constant currency revenue growthdecline of approximately $173$157 million, or 6.4%, and a negative impact of approximately $37 million from the effects of foreign currency fluctuations.

5.5%.

The constant currency growth decline for both the three and six months ended June 30, 20192020 primarily included volume-related increasesdecreases in clinical services data management, lifecycle safety and lab testing volumes as well as incremental revenuetesting. See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the impact from acquisitions.

COVID-19 on Research & Development Solutions business activity.

Costs of Revenue, exclusive of Depreciation and Amortization

Research & Development Solutions’ costs of revenue increased $50decreased $73 million, or 5.4%7.5%, in the second quarter of 20192020 over the same period in 2018.2019. This increasedecrease included a constant currency decrease of approximately $52 million, or 5.4%. The constant currency decrease for the three months ended June 30, 2020 was primarily due to a decrease in compensation and related expenses as a result of reduced volume in clinical services and lab testing.
Research & Development Solutions’ costs of revenue decreased $31 million, or 1.6%, in the first six months of 2020 over the same period in 2019. This decrease included a constant currency increase of approximately $74$9 million, or 8.0%, offset by a positive impact of approximately $24 million from the effects of foreign currency fluctuations. The constant currency increase for the three months ended June 30, 2019 was primarily due to an increase in compensation and related expenses, as well as incremental costs from acquisitions closed in 2018. This increase was partially offset by a decrease in reimbursed expenses. Compensation and related expenses increased as a result of headcount to support revenue growth.

Research & Development Solutions’ costs of revenue increased $73 million, or 4.0%, in the first six months of 2019 over the same period in 2018. This increase included a constant currency increase of approximately $127 million, or 6.9%, offset by a positive impact of approximately $54 million from the effects of foreign currency fluctuations.0.5%. The constant currency increase for the six months ended June 30, 20192020 was primarily duerelated to an increase in compensation and related expenses as well as incremental costs from acquisitions. Compensation and related expenses increased as a result of higher headcount to support revenue growth.

28

expenses.

Selling, General and Administrative Expenses
Research & Development Solutions’ selling, general and administrative expenses remained flat, in the second quarter of 2020 as compared to the same period in 2019, which included a constant currency increase of approximately $2 million, or 1.1%.
29
Table of contents

Research & Development Solutions’ selling, general and administrative expenses increased $2$3 million, or 1.1%0.8%, in the second quarterfirst six months of 20192020 as compared to the same period in 2018,2019, which includesincluded a constant currency increase of approximately $5$8 million, or 2.9%, offset by a positive impact of approximately $3 million from the effects of foreign currency fluctuations

Research & Development Solutions’ selling, general and administrative expenses increased $9 million, or 2.6%, in the first six months of 2019 as compared to the same period in 2018, which includes a constant currency increase of approximately $19 million, or 5.5%, offset by a positive impact of approximately $10 million from the effects of foreign currency fluctuations.

2.2%.

The constant currency increase for both the three and six months ended June 30, 20192020 was primarily related to an increase in compensation and related expenses from higher headcount to support growth and incremental costs from acquisitions.

expenses.

Contract Sales & Medical Solutions

 

Three Months Ended June 30,

 

 

Change

 

Three Months Ended June 30,Change

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

(in millions)20202019$%

Revenues

 

$

203

 

 

$

206

 

 

$

(3

)

 

 

(1.5

)%

Revenues$177  $203  $(26) (12.8)%

Costs of revenue, exclusive of depreciation and amortization

 

 

172

 

 

 

171

 

 

 

1

 

 

 

0.6

 

Costs of revenue, exclusive of depreciation and amortization151  172  (21) (12.2)%

Selling, general and administrative expenses

 

 

15

 

 

 

17

 

 

 

(2

)

 

 

(11.8

)

Selling, general and administrative expenses15  15  —  —  

Segment profit

 

$

16

 

 

$

18

 

 

$

(2

)

 

 

(11.1

)%

Segment profit$11  $16  $(5) (31.3)%

 

 

Six Months Ended June 30,

 

 

Change

 

(in millions)

 

2019

 

 

2018

 

 

$

 

 

%

 

Revenues

 

$

396

 

 

$

419

 

 

$

(23

)

 

 

(5.5

)%

Costs of revenue

 

 

341

 

 

 

353

 

 

 

(12

)

 

 

(3.4

)

Selling, general and administrative expenses

 

 

30

 

 

 

35

 

 

 

(5

)

 

 

(14.3

)

Segment profit

 

$

25

 

 

$

31

 

 

$

(6

)

 

 

(19.4

)%


Six Months Ended June 30,Change
(in millions)20202019$%
Revenues$373  $396  $(23) (5.8)%
Costs of revenue, exclusive of depreciation and amortization321  341  (20) (5.9)%
Selling, general and administrative expenses30  30  —  — %
Segment profit$22  $25  $(3) (12.0)%
Revenues
Revenues

Contract Sales & Medical Solutions’ revenues were $203$177 million in the second quarter of 2019,2020, a decrease of $3$26 million, or 1.5%12.8%, over the same period in 2018. This decrease includes a negative impact of approximately $5 million from the effects of foreign currency fluctuations partially offset by a constant currency revenue increase of approximately $2 million, or 1.0%. The constant currency increase for the three months ended June 30, 2019 was largely due to volume increases in the Americas region offset by decreases in the Europe and Africa region.

Contract Sales & Medical Solutions’ revenues were $396 million in the first six months of 2019, a decrease of $23 million, or 5.5%, over the same period in 2018.2019. This decrease included a constant currency revenue decline of approximately $13$25 million, or 3.1%12.3%.


Contract Sales & Medical Solutions’ revenues were $373 million in the first six months of 2020, a decrease of $23 million, or 5.8%, andover the same period in 2019. This decrease included a negative impactconstant currency revenue decline of approximately $10$20 million, from the effects of foreign currency fluctuations. or 5.1%.

The constant currency decline for three and six months ended June 30, 20192020 was largely due to a volume decreasesdecrease in the Americas region, partially offset by a volume increase in the Asia-Pacific as well asregions. See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the Europe and Africa region offset by volume increases in the Americas region.  

impact from COVID-19 on Contract Sales & Medical Solutions business activity.

Costs of Revenue, exclusive of Depreciation and Amortization

Contract Sales & Medical Solutions’ costs of revenue increased $1 million, or 0.6%, in the second quarter of 2019 as compared to the same period in 2018. This increase included a constant currency increase of approximately $4 million, or 2.3%, and a positive impact of approximately $3 million from the effects of foreign currency fluctuations. The constant currency increase for the three months ended June 30, 2019 was due to an increase in compensation and related expenses resulting from an increase in billable headcount.

Contract Sales & Medical Solutions’ costs of revenue decreased $12$21 million, or 3.4%12.2%, in the second quarter of 2020 as compared to the same period in 2019. This decrease included a constant currency decrease of approximately $19 million, or 11.0%.
Contract Sales & Medical Solutions’ costs of revenue decreased $20 million, or 5.9%, in the first six months of 20192020 as compared to the same period in 2018.2019. This decrease included a constant currency decline of approximately $4$17 million, or 1.1%, and a positive impact of approximately $8 million from the effects of foreign currency fluctuations. Cost of revenue on a5.0%.
The constant currency basisdecrease for the three and billable headcount were approximately flatsix months ended June 30, 2020 was due to a decrease in compensation and related expenses as a result of reduced volume in the first six months of 2019 as compared to the same period in 2018.  

29

Americas region.

Selling, General and Administrative Expenses

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $2 million, or 11.8%, in the second quarter of 2019 as compared to the same period in 2018, which includes a constant currency decrease of approximately $1 million, or 5.9% and a positive impact of approximately $1 million from the effects of foreign currency fluctuations

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $5 million, or 14.3%, in the first six months of 2019 as compared to the same period in 2018, which includes a constant currency decrease of approximately $4 million, or 11.4%, and a positive impact of approximately $1 million from the effects of foreign currency fluctuations.

The constant currency decreaseremained flat for both the three and six months ended June 30, 2019 was primarily related2020 as compared to cost saving initiatives.  

the same period in 2019.

30
Table of contents

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 financingother credit facilities and access to the capital markets.

We do not expect to have a significant impact on our overall liquidity position and outlook as a result of COVID-19.

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 $938$1,109 million at June 30, 20192020 ($294501 million of which was in the United States), an increase from $891$837 million at December 31, 2018.

2019. We also had $1.5 billion of additional available borrowings under our revolving credit facility at June 30, 2020.


Based on our current operating plan, and after considering the likely future impacts of COVID-19, 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 financingother credit facilities will enable us to fund our operating requirements and capital expenditures 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


Since the COVID-19 outbreak became a pandemic in March, the company temporarily suspended share repurchase activity. During the six months ended June 30, 2019,2020, we repurchased 2,752,2472,106,403 shares of our common stock for approximately $376.7$321.4 million under the Repurchase Program. These amounts include 1,000,000 shares of our common stock which we repurchased directly from underwriterscertain Selling Stockholders in connection with a secondary public offering of shares of our common stock held by certain of our remaining private equity sponsors transaction for an aggregate purchase price of $140.8approximately $164.3 million. See Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding the Repurchase Program.

As of June 30, 2019,2020, we have remaining authorization to repurchase up to approximately $1.9$1.0 billion 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.

30

Debt

Senior Notes

DuringSecured Facilities


On March 11, 2020, we entered into an amendment to the second quarter of 2019, we issued $1.1 billion of senior notesCredit Agreement to borrow $900 million in additional U.S. Dollar denominated term A loans due 2027.2023. The senior notes mature on May 15, 2027 and bear an interest rate of 5.00%, which is paid semi-annually on May 15 and November 15 of each year, beginning on November 15, 2019. The net proceeds from the senior notes due 2027additional term A loans were used to repay outstanding revolving credit loans under our senior secured credit facilities. On March 30, 2020, we prepaid $100 million of the additional
31
Table of contents
term A loans. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding our credit arrangements.
Senior Notes
On June 24, 2020, we completed the issuance and sale of €711,000,000 in gross proceeds of the Issuer’s 2.875% senior notes due 2028 (the “2.875% Notes”). The proceeds from the 2.875% Notes offering were used to redeem all of the Issuer’s outstanding 3.500% senior notes due 2024 (the “3.500% Notes”), including the payment of premiums in respect thereof, to repay a portion of the existing borrowings under ourthe Issuer’s revolving credit facility and to pay fees and expenses related to the notesNotes offering. See Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding our credit arrangements.

As of June 30, 2019,2020, we had $11.5$12.2 billion of total indebtedness, excluding $1.5 billion of additional available borrowings under our revolving credit facility.

Our long-term debt arrangements contain customary restrictive covenants and, as of June 30, 2019,2020, we believe we were in compliance with our restrictive covenants in all material respects.

We do not have material uncertainty about ongoing ability to meet the covenants of our credit arrangements.

Six months ended June 30, 20192020 and 2018

2019

Cash Flow from Operating Activities

 

Six Months Ended June 30,

 

Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

(in millions)20202019

Net cash provided by operating activities

 

$

504

 

 

$

493

 

Net cash provided by operating activities$635  $504  


Cash provided by operating activities increased $11$131 million during the first six months of 20192020 as compared to the same period in 2018.2019. The increase iswas primarily due to higher cash-related net income of $93 million partially offset by normal fluctuationsan increase in cash collections from clients and the impact of COVID-19 resulting in a decrease in accounts payable.

receivable and unbilled services compared to an increase in the prior period ($260 million), partially offset by lower cash-related net income ($105 million).

Cash Flow from Investing Activities

 

Six Months Ended June 30,

 

Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

(in millions)20202019

Net cash used in investing activities

 

$

(510

)

 

$

(450

)

Net cash used in investing activities$(369) $(510) 

Cash used in investing activities increased $60decreased $141 million during the first six months of 20192020 as compared to the same period in 2018.2019. This increasedecrease was comprised primarily of higher cash used for the acquisition of property, equipment and software ($98 million), partially offsetdriven by lower cash used for the acquisition of businesses, net of cash acquired ($26109 million) and investments in equity securities ($10 million).

Cash Flow from Financing Activities

 

Six Months Ended June 30,

 

Six Months Ended June 30,

(in millions)

 

2019

 

 

2018

 

(in millions)20202019

Net cash provided by (used in) financing activities

 

$

28

 

 

$

(93

)

Net cash provided by financing activitiesNet cash provided by financing activities$34  $28  

Cash provided by financing activities increased $121$6 million during the first six months of 20192020 as compared to the same period in 2018.2019. The increase in cash provided by financing activities was primarily due to an increase in cash provided by proceeds from revolving credit facilities, net of repayments ($260 million), and a decrease in cash used to repurchase common stock ($28735 million), partially offset by lessa decrease in cash provided by proceeds from debt issuances, net of repayments and debt issuance costs ($191237 million) and less cash from employee stock option plans ($53 million).

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

31

32

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Contractual Obligations and Commitments

We have various contractual obligations, which are recorded as liabilities in our consolidated financial statements. Prior to the implementation of Accounting Standards Codification 842, Leases, operating lease obligations were not recognized as liabilities in our condensed consolidated financial statements. Effective January 1, 2019, operating leases are included in operating lease right-of-use assets, other current liabilities and operating lease liabilities on our condensed consolidated balance sheets.

With the exception of new senior notessecured credit facilities and senior note disclosed in Note 8 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, therethere have been no material changes, outside of the ordinary course of business, to our contractual obligations as previously disclosed in our Annual Report on2019 Form 10-K for the fiscal year ended December 31, 2018.

10-K.

Application of Critical Accounting Policies

There have been no material changes to our critical accounting policies as previously disclosed in our Annual Report on2019 Form 10-K for the fiscal year ended December 31, 2018.

10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on2019 Form 10-K for the fiscal year ended December 31, 2018.

10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are party to legal proceedings incidental to our business. While the outcome of these matters could differ from management’s expectations, we do not believe that the resolution of these matters is reasonably likely to have a material adverse effect to our financial statements.

Item 1A. Risk Factors


For a discussion of the risks relating to our business, see Part I—Item 1A—“Risk Factors” of our Annual Report on2019 Form 10-K, for the fiscal year ended December 31, 2018. as updated in our 1Q 2020 Form 10-Q. There have been no material changes from the risk factors previously disclosed in our Annual Report.

1Q 2020 Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

Not applicable.

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Use of Proceeds from Registered Securities

Not applicable.

Purchases of Equity Securities by the Issuer

On October 30, 2013, our Board of Directors (the “Board”) approved the Repurchase Program authorizing the repurchase of up to $125.0 million of either our common stock or vested in-the-money employee stock options, or a combination thereof. Our Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of our common stock by $600 million, $1.5 billion, $2.0 billion, $1.5 billion and $2.0 billion in 2015, 2016, 2017, 2018 and February 2019, respectively, which increased the total amount that has been authorized under the Repurchase Program to $7.725 billion. 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, 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. The Repurchase Program for common stock does not have an expiration date.

From inception of the Repurchase Program through June 30, 2019,2020, we have repurchased a total of $5.8$6.7 billion of our securities under the Repurchase Program.


During the six months ended June 30, 2019,2020, we repurchased 2,752,2472,106,403 shares of our common stock for approximately $376.7$321.4 million under the Repurchase Program. These amounts include 1,000,000 shares of our common stock which we repurchased directly from underwriterscertain Selling Stockholders in connection with a secondary public offering of shares of our common stock held by certain of our remaining private equity sponsors transaction for an aggregate purchase price of $140.8approximately $164.3 million. See Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding the Repurchase Program.

As of June 30, 2019,2020, we have remaining authorization to repurchase up to approximately $1.9$1.0 billion 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.

Since the merger between Quintiles and IMS Health, we have repurchased 59.265.0 million shares of our common stock at an average market price per share of $91.36$96.64 for an aggregate purchase price of $5.4$6.3 billion both under and outside of the Repurchase Program. This includes shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award 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.

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The following table summarizes the monthly equity repurchase program activity for the three months ended June 30, 20192020 and the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program.

(in millions, except per share data)

 

Total Number of Shares Purchased

 

 

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

 

April 1, 2019 — April 30, 2019

 

 

—

 

 

$

—

 

 

 

—

 

 

$

2,144

 

May 1, 2019 — May 31, 2019

 

 

1.2

 

 

$

134.14

 

 

 

1.2

 

 

$

1,988

 

June 1, 2019 — June 30, 2019

 

 

0.6

 

 

$

135.68

 

 

 

0.6

 

 

$

1,908

 

 

 

 

1.8

 

 

 

 

 

 

 

1.8

 

 

 

 

 

(in millions, except per share data)Total Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
April 1, 2020 — April 30, 2020— — — $1,019 
May 1, 2020 — May 30, 2020— — — $1,019 
June 1, 2020 — June 30, 2020— — — $1,019 
— — 

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Item 6. Exhibits

The exhibits below are filed or furnished as a part of this report and are incorporated herein by reference.

Incorporated by Reference

Exhibit

Number

Exhibit Description

Filed

Herewith

Form

File No.

Exhibit

Filing Date

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) Condensed Consolidated Statements of Income (unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (unaudited), (iii) Condensed Consolidated Balance Sheets (unaudited), (iv) Condensed Consolidated Statements of Cash Flows (unaudited), (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements (unaudited). The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

X

Incorporated by Reference
Exhibit
Number		Exhibit DescriptionFiled
Herewith		FormFile No.ExhibitFiling Date
4.18-K001-359074.1June 24, 2020
31.1X
31.2X
32.1X
32.2X
101Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Statements of Income (unaudited), (ii) Condensed Consolidated Statements of Comprehensive Income (unaudited), (iii) Condensed Consolidated Balance Sheets (unaudited), (iv) Condensed Consolidated Statements of Cash Flows (unaudited), (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements (unaudited). 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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized on July 24, 2019.

23, 2020.

IQVIA HOLDINGS INC.

/s/ Michael R. McDonnell

Michael R. McDonnell

Executive Vice President and Chief Financial Officer

(On behalf of the Registrant and as Principal Financial Officer)

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