IQVIA HOLDINGS INC.

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I—FINANCIAL INFORMATION			3

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Statements of Income for the three months ended March 31,~~, 20~~20 2021 and 20 1 92020	3

	Condensed Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31,~~, 20~~20 2021 and ~~201~~92020	4

	Condensed Consolidated Balance Sheets as of March 31 3 1 , 20202 201 and December 31, ~~201~~92020	5

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 20202 201 and ~~201~~2 902 0	6

	Condensed Consolidated Statements of Stockholders’ Equity for three months ended March 31 20, 202 201 and ~~201~~2 902 0	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2018

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2926

Item 4.	Controls and Procedures	2926


PART II—OTHER INFORMATION			3027

Item 1.	Legal Proceedings	3027

Item 1A.	Risk Factors	3027

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3027

Item 6.	Exhibits	3229

SIGNATURES			3330

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions, except per share data)	(in millions, except per share data)	2020		2019		(in millions, except per share data)	2021		2020
Revenues	Revenues	$	2,754	$	2,684	Revenues	$	3,409	$	2,754
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization	1,824		1,748		Costs of revenue, exclusive of depreciation and amortization	2,293		1,824
Selling, general and administrative expenses	Selling, general and administrative expenses	407		419		Selling, general and administrative expenses	442		407
Depreciation and amortization	Depreciation and amortization	316		295		Depreciation and amortization	323		316
Restructuring costs	Restructuring costs	14		12		Restructuring costs	9		14
Income from operations	Income from operations	193		210		Income from operations	342		193
Interest income	Interest income	(2)		(2)		Interest income	(1)		(2)
Interest expense	Interest expense	106		110		Interest expense	99		106

Loss on extinguishment of debt						Loss on extinguishment of debt	24		0
Other income, net	Other income, net	(13)		(7)		Other income, net	(37)		(13)
Income before income taxes and equity in earnings of unconsolidated affiliates	Income before income taxes and equity in earnings of unconsolidated affiliates	102		109		Income before income taxes and equity in earnings of unconsolidated affiliates	257		102
Income tax expense	Income tax expense	17		41		Income tax expense	44		17
Income before equity in earnings of unconsolidated affiliates	Income before equity in earnings of unconsolidated affiliates	85		68		Income before equity in earnings of unconsolidated affiliates	213		85
Equity in earnings (loss) of unconsolidated affiliates		6		(1)
Equity in earnings of unconsolidated affiliates						Equity in earnings of unconsolidated affiliates	4		6
Net income	Net income	91		67		Net income	217		91
Net income attributable to non-controlling interests	Net income attributable to non-controlling interests	(9)		(9)		Net income attributable to non-controlling interests	(5)		(9)
Net income attributable to IQVIA Holdings Inc.	Net income attributable to IQVIA Holdings Inc.	$	82	$	58	Net income attributable to IQVIA Holdings Inc.	$	212	$	82
Earnings per share attributable to common stockholders:	Earnings per share attributable to common stockholders:					Earnings per share attributable to common stockholders:
Basic	Basic	$	0.43	$	0.29	Basic	$	1.11	$	0.43
Diluted	Diluted	$	0.42	$	0.29	Diluted	$	1.09	$	0.42
Weighted average common shares outstanding:	Weighted average common shares outstanding:					Weighted average common shares outstanding:
Basic	Basic	191.6		197.0		Basic	191.5		191.6
Diluted	Diluted	195.7		201.7		Diluted	194.9		195.7

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

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Net income	Net income	$	91	$	67	Net income	$	217	$	91
Comprehensive income (loss) adjustments:	Comprehensive income (loss) adjustments:					Comprehensive income (loss) adjustments:
Unrealized losses on derivative instruments, net of income tax benefit of ($7) and ($1)		(39)		(5)
Foreign currency translation, net of income tax expense of $23 and $30		(155)		(31)
Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $1, $(7)						Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $1, $(7)	6		(39)
Foreign currency translation, net of income tax expense of $62, $23						Foreign currency translation, net of income tax expense of $62, $23	(178)		(155)
Reclassification adjustments:	Reclassification adjustments:					Reclassification adjustments:
Losses (gains) on derivative instruments included in net income, net of income tax expense (benefit) of $0 and ($1)		16		(1)
Comprehensive (loss) income		(87)		30
Losses on derivative instruments included in net income, net of income tax benefit of $1, $0						Losses on derivative instruments included in net income, net of income tax benefit of $1, $0	1		16
Comprehensive income (loss)						Comprehensive income (loss)	46		(87)
Comprehensive income attributable to non-controlling interests	Comprehensive income attributable to non-controlling interests	(5)		(10)		Comprehensive income attributable to non-controlling interests	(5)		(5)
Comprehensive (loss) income attributable to IQVIA Holdings Inc.		$	(92)	$	20
Comprehensive income (loss) attributable to IQVIA Holdings Inc.						Comprehensive income (loss) attributable to IQVIA Holdings Inc.	$	41	$	(92)

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

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in millions, except per share data)	(in millions, except per share data)	March 31, 2020		December 31, 2019		(in millions, except per share data)	March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	927	$	837	Cash and cash equivalents	$	2,305	$	1,814
Trade accounts receivable and unbilled services, net	Trade accounts receivable and unbilled services, net	2,634		2,582		Trade accounts receivable and unbilled services, net	2,361		2,410
Prepaid expenses	Prepaid expenses	173		138		Prepaid expenses	159		159
Income taxes receivable	Income taxes receivable	49		56		Income taxes receivable	64		56
Investments in debt, equity and other securities	Investments in debt, equity and other securities	63		62		Investments in debt, equity and other securities	97		88
Other current assets and receivables	Other current assets and receivables	431		451		Other current assets and receivables	593		563
Total current assets	Total current assets	4,277		4,126		Total current assets	5,579		5,090
Property and equipment, net	Property and equipment, net	445		458		Property and equipment, net	472		482
Operating lease right-of-use assets	Operating lease right-of-use assets	489		496		Operating lease right-of-use assets	437		471
Investments in debt, equity and other securities	Investments in debt, equity and other securities	72		65		Investments in debt, equity and other securities	74		78
Investments in unconsolidated affiliates	Investments in unconsolidated affiliates	71		87		Investments in unconsolidated affiliates	88		84
Goodwill	Goodwill	11,989		12,159		Goodwill	12,415		12,654
Other identifiable intangibles, net	Other identifiable intangibles, net	5,328		5,514		Other identifiable intangibles, net	4,915		5,205
Deferred income taxes	Deferred income taxes	120		119		Deferred income taxes	107		114
Deposits and other assets	Deposits and other assets	287		227		Deposits and other assets	380		386
Total assets	Total assets	$	23,078	$	23,251	Total assets	$	24,467	$	24,564
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	2,384	$	2,512	Accounts payable and accrued expenses	$	2,819	$	2,813
Unearned income	Unearned income	1,036		1,014		Unearned income	1,554		1,252
Income taxes payable	Income taxes payable	94		108		Income taxes payable	135		102
Current portion of long-term debt	Current portion of long-term debt	139		100		Current portion of long-term debt	144		149
Other current liabilities	Other current liabilities	254		211		Other current liabilities	216		242
Total current liabilities	Total current liabilities	3,907		3,945		Total current liabilities	4,868		4,558
Long-term debt	Long-term debt	11,894		11,545		Long-term debt	12,092		12,384
Deferred income taxes	Deferred income taxes	618		646		Deferred income taxes	337		338
Operating lease liabilities	Operating lease liabilities	366		396		Operating lease liabilities	347		371
Other liabilities	Other liabilities	491		456		Other liabilities	586		633
Total liabilities	Total liabilities	17,276		16,988		Total liabilities	18,230		18,284
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares authorized at March 31, 2020 and December 31, 2019, $0.01 par value, 253.8 shares issued and 191.0 shares outstanding at March 31, 2020; 253.0 shares issued and 192.3 shares outstanding at December 31, 2019		11,012		11,049
Common stock and additional paid-in capital, 400.0 shares authorized as of March 31, 2021 and December 31, 2020, $0.01 par value, 255.4 shares issued and 191.6 shares outstanding as of March 31, 2021; 254.7 shares issued and 191.2 shares outstanding as of December 31, 2020						Common stock and additional paid-in capital, 400.0 shares authorized as of March 31, 2021 and December 31, 2020, $0.01 par value, 255.4 shares issued and 191.6 shares outstanding as of March 31, 2021; 254.7 shares issued and 191.2 shares outstanding as of December 31, 2020	11,068		11,095
Retained earnings	Retained earnings	1,080		998		Retained earnings	1,489		1,277
Treasury stock, at cost, 62.8 and 60.7 shares at March 31, 2020 and December 31, 2019, respectively		(6,065)		(5,733)
Treasury stock, at cost, 63.8 and 63.5 shares as of March 31, 2021 and December 31, 2020, respectively						Treasury stock, at cost, 63.8 and 63.5 shares as of March 31, 2021 and December 31, 2020, respectively	(6,228)		(6,166)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(485)		(311)		Accumulated other comprehensive loss	(376)		(205)
Equity attributable to IQVIA Holdings Inc.’s stockholders	Equity attributable to IQVIA Holdings Inc.’s stockholders	5,542		6,003		Equity attributable to IQVIA Holdings Inc.’s stockholders	5,953		6,001
Non-controlling interests	Non-controlling interests	260		260		Non-controlling interests	284		279
Total stockholders’ equity	Total stockholders’ equity	5,802		6,263		Total stockholders’ equity	6,237		6,280
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	23,078	$	23,251	Total liabilities and stockholders’ equity	$	24,467	$	24,564

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

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Operating activities:	Operating activities:					Operating activities:
Net income	Net income	$	91	$	67	Net income	$	217	$	91
Adjustments to reconcile net income to cash provided by operating activities:	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	Depreciation and amortization	316		295		Depreciation and amortization	323		316
Amortization of debt issuance costs and discount	Amortization of debt issuance costs and discount	3		3		Amortization of debt issuance costs and discount	5		3
Stock-based compensation	Stock-based compensation	—		26		Stock-based compensation	32		0
(Earnings) loss from unconsolidated affiliates		(6)		1
Loss (gain) on investments, net		8		(3)
(Earnings) from unconsolidated affiliates						(Earnings) from unconsolidated affiliates	(4)		(6)
Gain on investments, net						Gain on investments, net	3		8
Benefit from deferred income taxes	Benefit from deferred income taxes	(40)		(12)		Benefit from deferred income taxes	(39)		(40)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Change in accounts receivable, unbilled services and unearned income	Change in accounts receivable, unbilled services and unearned income	(84)		(76)		Change in accounts receivable, unbilled services and unearned income	342		(84)
Change in other operating assets and liabilities	Change in other operating assets and liabilities	(125)		(188)		Change in other operating assets and liabilities	(12)		(125)
Net cash provided by operating activities	Net cash provided by operating activities	163		113		Net cash provided by operating activities	867		163
Investing activities:	Investing activities:					Investing activities:
Acquisition of property, equipment and software	Acquisition of property, equipment and software	(141)		(141)		Acquisition of property, equipment and software	(149)		(141)
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	(14)		(175)		Acquisition of businesses, net of cash acquired	(19)		(14)
Purchases of marketable securities, net	Purchases of marketable securities, net	(7)		(2)		Purchases of marketable securities, net	(7)		(7)
Investments in unconsolidated affiliates, net of payments received	Investments in unconsolidated affiliates, net of payments received	17		2		Investments in unconsolidated affiliates, net of payments received	(1)		17
Investments in equity securities	Investments in equity securities	(6)		—		Investments in equity securities	(1)		(6)
Other	Other	1		1		Other	1		1
Net cash used in investing activities	Net cash used in investing activities	(150)		(315)		Net cash used in investing activities	(176)		(150)
Financing activities:	Financing activities:					Financing activities:
Proceeds from issuance of debt	Proceeds from issuance of debt	800		—		Proceeds from issuance of debt	1,751		800
Payment of debt issuance costs	Payment of debt issuance costs	(11)		—		Payment of debt issuance costs	(32)		(11)
Repayment of debt and principal payments on capital lease obligations	Repayment of debt and principal payments on capital lease obligations	(25)		(25)		Repayment of debt and principal payments on capital lease obligations	(1,758)		(25)
Proceeds from revolving credit facility	Proceeds from revolving credit facility	990		790		Proceeds from revolving credit facility	0		990
Repayment of revolving credit facility	Repayment of revolving credit facility	(1,250)		(385)		Repayment of revolving credit facility	0		(1,250)
(Payments) proceeds related to employee stock option plans		(41)		9
(Payments) related to employee stock option plans						(Payments) related to employee stock option plans	(56)		(41)
Repurchase of common stock	Repurchase of common stock	(345)		(145)		Repurchase of common stock	(62)		(345)
Distributions to non-controlling interest, net		(5)		—
Distributions to non-controlling interests, net						Distributions to non-controlling interests, net	0		(5)
Contingent consideration and deferred purchase price payments	Contingent consideration and deferred purchase price payments	(6)		(16)		Contingent consideration and deferred purchase price payments	(11)		(6)
Net cash provided by financing activities		107		228
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(168)		107
Effect of foreign currency exchange rate changes on cash	Effect of foreign currency exchange rate changes on cash	(30)		19		Effect of foreign currency exchange rate changes on cash	(32)		(30)
Increase in cash and cash equivalents	Increase in cash and cash equivalents	90		45		Increase in cash and cash equivalents	491		90
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	837		891		Cash and cash equivalents at beginning of period	1,814		837
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	927	$	936	Cash and cash equivalents at end of period	$	2,305	$	927

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

IQVIA HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


(in millions)	(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		(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, 2019		253.0	(60.7)	$	3	$	11,046	$	998	$	(5,733)	$	(311)	$	260	$	6,263
Balance, December 31, 2020																		Balance, December 31, 2020	254.7	(63.5)	$	3	$	11,092	$	1,277	$	(6,166)	$	(205)	$	279	$	6,280
Issuance of common stock	Issuance of common stock	0.8	—	—		(44)		—		—		—		—		(44)		Issuance of common stock	0.7	—	—		(57)		—		—		—		—		(57)
Repurchase of common stock	Repurchase of common stock	—	(2.1)	—		—		—		(332)		—		—		(332)		Repurchase of common stock	—	(0.3)	—		—		—		(62)		—		—		(62)
Stock-based compensation	Stock-based compensation	—	—	—		7		—		—		—		—		7		Stock-based compensation	—	—	—		30		—		—		—		—		30
Distributions to non-controlling interests		—	—	—		—		—		—		—		(5)		(5)
Distributions to non-controlling interests, net																		Distributions to non-controlling interests, net	—	—	—		—		—		—		—		—		0
Net income	Net income	—	—	—		—		82		—		—		9		91		Net income	—	—	—		—		212		—		—		5		217
Unrealized losses on derivative instruments, net of tax		—	—	—		—		—		—		(39)		—		(39)
Unrealized gains on derivative instruments, net of tax																		Unrealized gains on derivative instruments, net of tax	—	—	—		—		—		—		6		—		6
Foreign currency translation, net of tax	Foreign currency translation, net of tax	—	—	—		—		—		—		(151)		(4)		(155)		Foreign currency translation, net of tax	—	—	—		—		—		—		(178)		0		(178)
Reclassification adjustments, net of tax	Reclassification adjustments, net of tax	—	—	—		—		—		—		16		—		16		Reclassification adjustments, net of tax	—	—	—		—		—		—		1		—		1

Balance, March 31, 2020		253.8	(62.8)	$	3	$	11,009	$	1,080	$	(6,065)	$	(485)	$	260	$	5,802
Balance, March 31, 2021																		Balance, March 31, 2021	255.4	(63.8)	$	3	$	11,065	$	1,489	$	(6,228)	$	(376)	$	284	$	6,237

(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, 2018 251.5 (54) $ 3 $ 10,898 $ 807 $ (4,770) $ (224) $ 240 $ 6,954
Issuance of common stock 0.7 — — 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, 2019 252.2 (55) $ 3 $ 10,924 $ 865 $ (4,915) $ (262) $ 250 $ 6,865


(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, 2019	253.0	(60.7)	$	3	$	11,046	$	998	$	(5,733)	$	(311)	$	260	$	6,263
Issuance of common stock	0.8	—	—		(44)		—		—		—		—		(44)
Repurchase of common stock	—	(2.1)	—		—		—		(332)		—		—		(332)
Stock-based compensation	—	—	—		7		—		—		—		—		7
Distributions to non-controlling interests, net	—	—	—		—		—		—		—		(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, 2020	253.8	(62.8)	$	3	$	11,009	$	1,080	$	(6,065)	$	(485)	$	260	$	5,802

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

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~~clinical research services to the life sciences industry. With approximately ~~67,000~~72,000 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, ~~2020.~~2021. 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, ~~2019.~~2020. The balance sheet atas of December 31, ~~2019~~2020 has been derived from the audited consolidated financial statements of the Company but does not include all the disclosures required by GAAP.

~~Additionally, t~~he outbreak of the novel coronavirus, or COVID-19, and the various governmental, industry and consumer actions related thereto, could have a material and adverse effect on our business, financial condition and results of operations. These effects, which largely depend on future developments that cannot be accurately predicted and are uncertain, could include a negative impact on the availability of our key personnel, temporary closures of our facilities or the facilities of our business partners, customers, suppliers, third party service providers or other vendors, an increased risk of customer defaults or delays in payments or purchasing decisions, and the interruption of domestic and global supply chains, distribution channels, liquidity and capital or financial markets.As COVID-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 months ended March 31, 2020 may not be indicative of results for the full year.

Recently Issued Accounting Standards

Accounting pronouncements adopted

In ~~August 2018,~~March 2020, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued new accounting guidance that ~~clarifies~~provides optional expedients and ~~aligns~~exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The new accounting guidance became effective for the ~~accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.~~Company as of March 12, 2020 through December 31, 2022. The Company adopted this new accounting guidance on January 1, ~~2020.~~2021. The adoption of this new accounting guidance did not 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. This new accounting guidance also modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Company adopted this new accounting guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material effect on the Company’s consolidated financial statements.

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 on January 1, 2020. The adoption of this new accounting guidance did not 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 Company 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 Company adopted this new accounting guidance ~~will be effective for the Company~~ on January 1, ~~2021 on a prospective basis. Early~~2021. The adoption ~~is permitted. The Company is currently evaluating the impact~~ of this new accounting guidance did not have a material effect on ~~its~~the Company’s consolidated financial statements.

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 Company adopted this new accounting guidance ~~will be effective for the Company~~ on January 1, 2021. ~~Early~~The adoption ~~is permitted. The Company is currently evaluating the impact~~ of this new accounting guidance did not have a material effect on ~~its~~the Company’s 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 months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


		Three Months Ended March 31, 2020																Three Months Ended March 31, 2021
(in millions)	(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total		(in millions)	Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:	Revenues:										Revenues:
Americas	Americas		$	581	$	670	$	91	$	1,342	Americas	$	600	$	1,034	$	78	$	1,712
Europe and Africa	Europe and Africa		396		428		50		874		Europe and Africa	590		443		49		1,082
Asia-Pacific	Asia-Pacific		140		343		55		538		Asia-Pacific	158		391		66		615
Total revenues	Total revenues		$	1,117	$	1,441	$	196	$	2,754	Total revenues	$	1,348	$	1,868	$	193	$	3,409


		Three Months Ended March 31, 2019																Three Months Ended March 31, 2020
(in millions)	(in millions)		Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total		(in millions)	Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Total
Revenues:	Revenues:										Revenues:
Americas	Americas		$	553	$	642	$	94	$	1,289	Americas	$	581	$	670	$	91	$	1,342
Europe and Africa	Europe and Africa		383		456		51		890		Europe and Africa	396		428		50		874
Asia-Pacific	Asia-Pacific		139		318		48		505		Asia-Pacific	140		343		55		538
Total revenues	Total revenues		$	1,075	$	1,416	$	193	$	2,684	Total revenues	$	1,117	$	1,441	$	196	$	2,754

NoNaN customer accounted for 10% or more of consolidated revenues for the three months ended March 31, ~~2020~~2021 or ~~2019.~~2020.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, ~~2020,~~2021, approximately ~~$22.0~~$26.1 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.

3. Trade Accounts Receivable, Unbilled Services and Unearned Income

Trade accounts receivables and unbilled services consist of the following:


(in millions)	(in millions)	March 31, 2020		December 31, 2019		(in millions)	March 31, 2021		December 31, 2020
Trade accounts receivable:	Trade accounts receivable:					Trade accounts receivable:
Billed	Billed	$	1,309	$	1,312	Billed	$	1,159	$	1,181
Unbilled services	Unbilled services	1,341		1,286		Unbilled services	1,233		1,263
Trade accounts receivable and unbilled services	Trade accounts receivable and unbilled services	2,650		2,598		Trade accounts receivable and unbilled services	2,392		2,444
Allowance for doubtful accounts	Allowance for doubtful accounts	(16)		(16)		Allowance for doubtful accounts	(31)		(34)
Trade accounts receivable and unbilled services, net	Trade accounts receivable and unbilled services, net	$	2,634	$	2,582	Trade accounts receivable and unbilled services, net	$	2,361	$	2,410

Unbilled services and unearned income were as follows:


(in millions)	(in millions)	March 31, 2020		December 31, 2019		Change		(in millions)	March 31, 2021		December 31, 2020		Change
Unbilled services	Unbilled services	$	1,341	$	1,286	$	55	Unbilled services	$	1,233	$	1,263	$	(30)
Unearned income	Unearned income	(1,036)		(1,014)		(22)		Unearned income	(1,554)		(1,252)		(302)
Net balance	Net balance	$	305	$	272	$	33	Net balance	$	(321)	$	11	$	(332)

Unbilled services, which is comprised of approximately ~~equal parts~~60% of unbilled receivables and 40% of contract assets as of March 31, ~~2020, increased~~2021, decreased by ~~$55~~$30 million as compared to December 31, ~~2019.~~2020. Contract assets are unbilled services for which invoicing is based on the timing of certain milestones related to service contracts for clinical research whereas unbilled receivables are billable upon the passage of time. Unearned income increased by ~~$22~~$302 million over the same period resulting in ~~an increase~~a decrease of ~~$33~~$332 million in the net balance of unbilled services and unearned income between December 31, ~~2019~~2020 and March 31, ~~2020. Growth~~2021. The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ~~ASC~~Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, related to the Company’s Research & Development Solutions contracts (which is based on the percentage of costs incurred) versus the timing of invoicing, which is based on certain milestones.

Bad debt expense recognized on the Company’s receivables and unbilled services was not material for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

4. ~~Leases~~

The Company has operating leases for corporate offices, datacenters, motor vehicles and certain equipment, many of which contain renewal and escalation clauses. The leases expire at various dates through 2029 with options to cancel certain leases at various intervals. The Company also has a finance lease for office and lab space that expires in 2044. Based on the timing of when the finance lease commenced, the associated income statement and cash flow impact is not material for the three months ended March 31, 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.

~~The components of lease expense were as follows:~~

(in millions) Classification Three Months Ended March 31, 2020 Three Months Ended March 31, 2019
Operating lease cost ⁽¹⁾
Selling, general and administrative expenses $ 49 $ 48

~~(1)Includes variable lease costs, which are immaterial.~~

~~Other information related to leases was as follows:~~

(in millions) Three Months Ended March 31, 2020 Three Months Ended March 31, 2019
Supplemental Cash Flow:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 46 $ 53
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 32 $ 20
Finance leases $ 58 $ —
Weighted Average Remaining Lease Term:
Operating leases 4.75 years 5.11 years
Finance leases 24.75 years —
Weighted Average Discount Rate:
Operating leases 4.20 % 4.31 %
Finance leases 3.41 % —

~~Future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows:~~

(in millions) Operating Leases Finance Leases
Remainder of 2020 $ 146 $ —
2021 143 —
2022 113 3
2023 82 3
2024 53 3
2025 41 3
Thereafter 41 79
Total future minimum lease payments 619 91
Less imputed interest (79) (33)
Total $ 540 $ 58
Reported as of March 31, 2020:
Other current liabilities $ 174 $ —
Operating lease liabilities 366 —
Other liabilities — 58
Total $ 540 $ 58

5. Goodwill

The following is a summary of goodwill by reportable segment for the three months ended March 31, ~~2020:~~2021:


(in millions)	(in millions)	Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Consolidated		(in millions)	Technology & Analytics Solutions		Research & Development Solutions		Contract Sales & Medical Solutions		Consolidated
Balance as of December 31, 2019		$	10,374	$	1,646	$	139	$	12,159
Balance as of December 31, 2020										Balance as of December 31, 2020	$	10,864	$	1,646	$	144	$	12,654
Business combinations	Business combinations	12		—		—		12		Business combinations	15		0		0		15
Impact of foreign currency fluctuations and other	Impact of foreign currency fluctuations and other	(135)		(48)		1		(182)		Impact of foreign currency fluctuations and other	(264)		(4)		14		(254)
Balance as of March 31, 2020		$	10,251	$	1,598	$	140	$	11,989
Balance as of March 31, 2021										Balance as of March 31, 2021	$	10,615	$	1,642	$	158	$	12,415

6.5. 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:


(in millions)	Balance Sheet Classification	March 31, 2021						December 31, 2020
		Assets		Liabilities		Notional		Assets		Liabilities		Notional
Derivatives designated as hedging instruments:
Foreign exchange forward contracts	Other current assets and liabilities	$	3	$	0	$	64	$	5	$	0	$	70
Interest rate swaps	Other assets and liabilities	0		44		1,800		0		55		1,800

Derivatives not designated as hedging instruments:
Interest rate swaps	Other liabilities	0		0		0		0		1		356
Total derivatives		$	3	$	44			$	5	$	56

(in millions) Balance Sheet Classification March 31, 2020 December 31, 2019
Assets Liabilities Notional Assets Liabilities Notional
Derivatives designated as hedging instruments:
Foreign exchange forward contracts Other current assets and liabilities $ 1 $ 3 $ 131 $ 4 $ — $ 148
Interest rate swaps Other assets and liabilities — 50 1,500 — 27 875
Interest rate caps Deposits and other assets — — — — — —
Derivatives not designated as hedging instruments:
Interest rate swaps Other liabilities — 2 319 — 3 325
Total derivatives $ 1 $ 55 $ 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 March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Foreign exchange forward contracts	Foreign exchange forward contracts	$	(6)	$	1	Foreign exchange forward contracts	$	(2)	$	(6)
Interest rate derivatives	Interest rate derivatives	(23)		(9)		Interest rate derivatives	11		(23)
Total	Total	$	(29)	$	(8)	Total	$	9	$	(29)

The amount of foreign exchange ~~gains~~losses related to the net investment hedge included in the cumulative translation adjustment component of accumulated other comprehensive loss (“AOCI”) for the three months ended March 31, ~~2020~~2021 was ~~$114~~$285 million.

7.6. Fair Value Measurements

The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values atas of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 due to their short-term nature. AtAs of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the fair value of total debt approximated ~~$11,751~~$12,392 million and ~~$11,925~~$12,746 million, respectively, as determined under Level 1 and Level 2 measurements for these financial instruments.

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 March 31, ~~2020:~~2021:


(in millions)	(in millions)	Level 1		Level 2		Level 3		Total		(in millions)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Marketable securities	Marketable securities	80		$	—	$	—	$	80	Marketable securities	$	126	$	0	$	0	$	126
Derivatives	Derivatives	—		$	1	—		1		Derivatives	0		3		0		3
Total	Total	$	80	$	1	$	—	$	81	Total	$	126	$	3	$	0	$	129
Liabilities:	Liabilities:									Liabilities:
Derivatives	Derivatives	$	—	$	55	$	—	$	55	Derivatives	$	0	$	44	$	0	$	44
Contingent consideration	Contingent consideration	—		—		98		98		Contingent consideration	0		0		109		109
Total	Total	$	—	$	55	$	98	$	153	Total	$	0	$	44	$	109	$	153

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~~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.

~~Table~~ Based on the assessments of co ~~ntents~~the probability of achieving specific targets, the Company has accrued approximately 84% of the maximum contingent consideration payments that could potentially become payable.

The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the three months ended March 31:

Contingent Consideration
(in millions) 2020 2019
Balance as of January 1 $ 113 $ 123
Business combinations 8 29
Contingent consideration paid (10) (16)
Revaluations included in earnings and foreign currency translation adjustments (13) 1
Balance as of March 31 $ 98 $ 137

~~The Company used the following key assumptions when estimating the fair value of contingent considerations:~~

~~Unobservable Input~~

~~Probability of target achievement~~

~~Range of potential payment~~

~~Revenue target~~

~~100%~~

~~0%-100%~~

~~EBITDA target~~

~~100%~~

~~0%-100%~~

~~Operational target~~

~~50%~~

~~0%-100%~~


	Contingent Consideration
(in millions)	2021		2020
Balance as of January 1	$	119	$	113
Business combinations	5		8
Contingent consideration paid	(9)		(10)
Revaluations included in earnings and foreign currency translation adjustments	(6)		(13)
Balance as of March 31	$	109	$	98

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 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.

8.7. Credit Arrangements

The following is a summary of the Company’s revolving credit facilities atas of March 31, ~~2020:~~2021:


Facility						Interest Rates
$1,500 million (revolving credit facility)						LIBOR in the relevant currency borrowed plus a margin of 1.50% atas of March 31, ~~2020~~2021
$25 million (receivables financing facility)						LIBOR Market Index Rate ~~(1.89% at~~(0.11% as of March 31, ~~2020)~~2021) plus 0.90%
£10 million (approximately ~~$12~~$14 million) (general banking facility)						Bank’s base rate of 0.10% atas of March 31, ~~2020~~2021 plus 1%

1412

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


(in millions)	(in millions)	March 31, 2020		December 31, 2019		(in millions)	March 31, 2021		December 31, 2020
Senior Secured Credit Facilities:	Senior Secured Credit Facilities:					Senior Secured Credit Facilities:
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 2.95%		$	760	$	770
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 3.45%		800		—
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 1.70%						Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 1.70%	$	718	$	728
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%	755		766
Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%	Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%	374		387		Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%	377		400
Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 2.74%		535		535
Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 1.86%						Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 1.86%	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%	1,277		1,306		Term B Loan due 2024—Euro LIBOR at average floating rates of 2.00%	1,347		1,413
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 2.74%		731		733
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 3.20%		933		936
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.86%						Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.86%	724		726
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.95%						Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.95%	924		926
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%	630		644		Term B Loan due 2025—Euro LIBOR at average floating rates of 2.00%	665		697
Revolving Credit Facility due 2023:
U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average floating rates of 2.49%		100		154
Japanese Yen denominated borrowings—Japanese Yen LIBOR at average floating rates of 1.50%		—		212
5.0% Senior Notes due 2027—U.S. Dollar denominated	5.0% Senior Notes due 2027—U.S. Dollar denominated	1,100		1,100		5.0% Senior Notes due 2027—U.S. Dollar denominated	1,100		1,100
5.0% Senior Notes due 2026—U.S. Dollar denominated	5.0% Senior Notes due 2026—U.S. Dollar denominated	1,050		1,050		5.0% Senior Notes due 2026—U.S. Dollar denominated	1,050		1,050
2.875% Senior Notes due 2025—Euro denominated	2.875% Senior Notes due 2025—Euro denominated	462		471		2.875% Senior Notes due 2025—Euro denominated	493		515
3.25% Senior Notes due 2025—Euro denominated	3.25% Senior Notes due 2025—Euro denominated	1,568		1,598		3.25% Senior Notes due 2025—Euro denominated	0		1,748
3.5% Senior Notes due 2024—Euro denominated		688		701
2.25% Senior Notes due 2028—Euro denominated	2.25% Senior Notes due 2028—Euro denominated	792		808		2.25% Senior Notes due 2028—Euro denominated	844		883
Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.89%		300		300
2.875% Senior Notes due 2028—Euro denominated						2.875% Senior Notes due 2028—Euro denominated	834		872
1.750% Senior Notes due 2026—Euro denominated						1.750% Senior Notes due 2026—Euro denominated	645		0
2.250% Senior Notes due 2029—Euro denominated						2.250% Senior Notes due 2029—Euro denominated	1,056		0
Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.01%						Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.01%	240		240
Principal amount of debt	Principal amount of debt	12,100		11,705		Principal amount of debt	12,307		12,600
Less: unamortized discount and debt issuance costs	Less: unamortized discount and debt issuance costs	(67)		(60)		Less: unamortized discount and debt issuance costs	(71)		(67)
Less: current portion	Less: current portion	(139)		(100)		Less: current portion	(144)		(149)
Long-term debt	Long-term debt	$	11,894	$	11,545	Long-term debt	$	12,092	$	12,384

Contractual maturities of long-term debt are as follows atas of March 31, ~~2020:~~2021:


(in millions)	(in millions)		(in millions)
Remainder of 2020		104
2021		139
Remainder of 2021			Remainder of 2021	$	107
2022	2022	439	2022	388
2023	2023	1,790	2023	1,700
2024	2024	2,473	2024	1,868
2025			2025	3,560
Thereafter	Thereafter	7,155	Thereafter	4,684
		12,100		$	12,307

AtAs of March 31, ~~2020,~~2021, there were bank guarantees totaling approximately £0.8 million (approximately $1.1 million) issued against the availability of the general banking facility.

Senior Secured Credit Facilities

AtAs of March 31, ~~2020,~~2021, the Company’s Fourth Amended and Restated Credit Agreement, as amended (the “Credit Agreement”) provided financing through several senior secured credit facilities (collectively, the “senior secured credit facilities”) of up to approximately ~~$7,540 million,~~$7.5 billion, which consisted of ~~$6,140 million~~$6.0 billion principal amounts of debt outstanding (as detailed in the table above), ~~$3 million of standby letters of credit~~ and ~~$1,397 million~~$1.5 billion of available borrowing capacity on the ~~$1,500 million~~ revolving credit ~~facility.~~facility and standby letters of credit.

Senior Notes

On March ~~11, 2020,~~3, 2021, IQVIA Inc. (the “Issuer”), a wholly owned subsidiary of the Company, ~~entered into Amendment No. 7 to~~completed the ~~Credit Agreement to borrow $900 million~~issuance and sale of €1,450,000,000 in ~~additional U.S. Dollar denominated term A loans~~gross proceeds of the Issuer's (i) €550,000,000 aggregate principal amount of its 1.750% Senior Notes due ~~2023~~2026 (the ~~“TLA-2 Loans”~~“2026 Notes”) and (ii) €900,000,000 aggregate principal amount of its 2.250% Senior Notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The Notes were issued pursuant to an Indenture, dated March 3, 2021, among the Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors. The 2026 Notes are unsecured obligations of the Issuer, will mature on March ~~30, 2020, entered into Amendment No. 8 to~~15, 2026 and bear interest at the ~~Credit Agreement to amend certain terms~~rate of 1.750% per year, with interest payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2021. The 2029 Notes are unsecured obligations of the ~~TLA-2 Loans. The TLA-2 Loans~~Issuer, will mature on March 15, 2029 and bear interest ~~based~~at the rate of 2.250% per year, with interest payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2021. The Issuer may redeem (i) the ~~U.S. Dollar LIBOR plus~~2026 Notes prior to their final stated maturity, subject to a ~~margin ranging~~customary make-whole premium, at any time prior to March 15, 2023 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from ~~1.50%~~0.875% to ~~2.25%, with~~0.000% and (ii) the 2029 Notes prior to their final stated maturity, subject to a ~~U.S. Dollar LIBOR floor of 1.00% per annum.~~customary make-whole premium, at any time prior to March 15, 2024 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 1.125% to 0.000%. The Issuer may choose to redeem the 2026 Notes and the 2029 Notes, either together or separately, on a non-ratable basis. The proceeds from the ~~TLA-2 Loans~~Notes offering 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~~redeem all of the ~~TLA-2 loans.~~

~~Based~~Issuer’s outstanding 3.250% senior notes due 2025 (the “3.250% Notes”), including the payment of premiums in respect thereof and to pay fees and expenses related to the Notes offering. On February 16, 2021, the Issuer issued a conditional notice of redemption with respect to the 3.250% Notes, for a total redemption price equal to the sum of the principal amount of the 3.250% Notes, accrued and unpaid interest on ~~our current operating plan,~~the 3.250% Notes to the redemption date and ~~after considering~~ the ~~likely future impacts~~applicable redemption premium. The Issuer’s obligations with respect to the 3.250% Notes were discharged on the same day as the Issuer completed the issuance 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.~~Notes.

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. AtAs of March 31, ~~2020,~~2021, the Company was in compliance in all material respects 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 the Company's credit~~Company’s financing arrangements.

9.8. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 1.0 million shares of preferred stock, $0.01 per share par value. NaN shares of preferred stock were issued or outstanding as of March 31, ~~2020~~2021 or December 31, ~~2019.~~2020.

Equity Repurchase Program

During the three months ended March 31, ~~2020,~~2021, the Company repurchased ~~2,106,403~~265,809 shares of its common stock for ~~approximately $321.4~~$50.5 million under the Repurchase Program. These amounts include 1,000,000 shares of our common stock repurchased from certain of the Company’s stockholders (the “Selling Stockholders”) in a private transaction for an aggregate purchase price of approximately $164.3 million. As of March 31, ~~2020,~~2021, the Company has remaining authorization to repurchase up to approximately ~~$1.0~~$0.9 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.

~~10.~~9. Restructuring

The Company has continued to take restructuring actions in ~~2020~~2021 to align its resources and reduce overcapacity to adapt to changing market conditions and integrate acquisitions. These actions include consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements. These restructuring actions are expected to continue into ~~2021.~~2022.

1614

The following amounts were recorded for the restructuring plans:


(in millions)	(in millions)	Severance and Related Costs		Facility Exit Costs		Total		(in millions)	Severance and Related Costs		Facility Exit Costs		Total
Balance at December 31, 2019		$	64	$	3	$	67
Balance as of December 31, 2020								Balance as of December 31, 2020	$	51	$	2	$	53
Expense, net of reversals	Expense, net of reversals	15		(1)		14		Expense, net of reversals	9		0		9
Payments	Payments	(17)		(1)		(18)		Payments	(14)		0		(14)
Foreign currency translation and other	Foreign currency translation and other	(1)		1		—		Foreign currency translation and other	(2)		0		(2)
Balance at March 31, 2020		$	61	$	2	$	63
Balance as of March 31, 2021								Balance as of March 31, 2021	$	44	$	2	$	46

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 atas of March 31, ~~2020~~2021 will be paid in ~~2020~~2021 and ~~2021.~~2022.

~~11.~~10. Income Taxes

The effective income tax rate was ~~16.7%~~17.1% and ~~37.6%~~16.7% in the first quarter of ~~2020~~2021 and ~~2019,~~2020, respectively. The effective income tax rate in the first quarter of ~~2020~~2021 and ~~2019~~2020 was favorably impacted by ~~$21~~$17 million and ~~$9.4~~$21 million, respectively, as a result of excess tax benefits recognized upon settlement of ~~shared-based~~share-based compensation awards. Also, the effective income tax rate in the first quarter 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 quarter of 2019 the U.S. Treasury Department issued final regulations on the transition tax and proposed regulations on Foreign Derived Intangible Income (“FDII”). While the final regulations related to the transition tax did not have a material impact on the Company, the proposed guidance on FDII had an unfavorable impact. Although the proposed guidance for FDII is 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 for this impact. It is expected that during 2020 the U.S. Treasury Department will issue final regulations on FDII.

~~12.~~11. Comprehensive Income (Loss)

Below is a summary of the components of AOCI:


(in millions)	(in millions)	Foreign Currency Translation		Derivative Instruments		Defined Benefit Plans		Income Taxes		Total		(in millions)	Foreign Currency Translation		Derivative Instruments		Defined Benefit Plans		Income Taxes		Total
Balance at December 31, 2019		$	(430)	$	(21)	$	(16)	$	156	$	(311)
Balance as of December 31, 2020												Balance as of December 31, 2020	$	(395)	$	(48)	$	(85)	$	323	$	(205)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(128)		(46)		—		(16)		(190)		Other comprehensive income (loss) before reclassifications	(116)		7		0		(63)		(172)
Reclassification adjustments	Reclassification adjustments	—		16		—		—		16		Reclassification adjustments	0		2		0		(1)		1
Balance at March 31, 2020		$	(558)	$	(51)	$	(16)	$	140	$	(485)
Balance as of March 31, 2021												Balance as of March 31, 2021	$	(511)	$	(39)	$	(85)	$	259	$	(376)

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:


(in millions)	(in millions)	Affected Financial Statement Line Item	Three Months Ended March 31,							(in millions)	Affected Financial Statement Line Item			Three Months Ended March 31,
					2020		2019						2021			2020
Derivative instruments:	Derivative instruments:							Derivative instruments:
Interest rate swaps and caps								Interest rate swaps and caps	Interest expense		$	4		$	0
Foreign exchange forward contracts	Foreign exchange forward contracts	Revenues	$	2	$	1		Foreign exchange forward contracts	Revenues		(2)			2
Foreign exchange forward contracts	Foreign exchange forward contracts	Other expense (income), net	14		(3)			Foreign exchange forward contracts	Other income, net		0			14
Total before income taxes	Total before income taxes		16		(2)			Total before income taxes			2			16
Income tax (benefit) expense			—		(1)
Income tax benefit								Income tax benefit			1			0
Total net of income taxes	Total net of income taxes		$	16	$	(1)		Total net of income taxes			$	1		$	16

~~13.~~12. Segments

The following table presents the Company’s operations by reportable segment. The Company is managed through 3 reportable segments, Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical 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. 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 March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Revenues	Revenues					Revenues
Technology & Analytics Solutions	Technology & Analytics Solutions	$	1,117	$	1,075	Technology & Analytics Solutions	$	1,348	$	1,117
Research & Development Solutions	Research & Development Solutions	1,441		1,416		Research & Development Solutions	1,868		1,441
Contract Sales & Medical Solutions	Contract Sales & Medical Solutions	196		193		Contract Sales & Medical Solutions	193		196
Total revenues	Total revenues	2,754		2,684		Total revenues	3,409		2,754
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization					Costs of revenue, exclusive of depreciation and amortization
Technology & Analytics Solutions	Technology & Analytics Solutions	666		633		Technology & Analytics Solutions	812		666
Research & Development Solutions	Research & Development Solutions	988		946		Research & Development Solutions	1,321		988
Contract Sales & Medical Solutions	Contract Sales & Medical Solutions	170		169		Contract Sales & Medical Solutions	160		170
Total costs of revenue	Total costs of revenue	1,824		1,748		Total costs of revenue	2,293		1,824
Selling, general and administrative expenses	Selling, general and administrative expenses					Selling, general and administrative expenses
Technology & Analytics Solutions	Technology & Analytics Solutions	183		184		Technology & Analytics Solutions	187		183
Research & Development Solutions	Research & Development Solutions	185		181		Research & Development Solutions	185		185
Contract Sales & Medical Solutions	Contract Sales & Medical Solutions	15		15		Contract Sales & Medical Solutions	13		15
General corporate and unallocated	General corporate and unallocated	24		39		General corporate and unallocated	57		24
Total selling, general and administrative expenses	Total selling, general and administrative expenses	407		419		Total selling, general and administrative expenses	442		407
Segment profit	Segment profit					Segment profit
Technology & Analytics Solutions	Technology & Analytics Solutions	268		258		Technology & Analytics Solutions	349		268
Research & Development Solutions	Research & Development Solutions	268		289		Research & Development Solutions	362		268
Contract Sales & Medical Solutions	Contract Sales & Medical Solutions	11		9		Contract Sales & Medical Solutions	20		11
Total segment profit	Total segment profit	547		556		Total segment profit	731		547
General corporate and unallocated	General corporate and unallocated	(24)		(39)		General corporate and unallocated	(57)		(24)
Depreciation and amortization	Depreciation and amortization	(316)		(295)		Depreciation and amortization	(323)		(316)
Restructuring costs	Restructuring costs	(14)		(12)		Restructuring costs	(9)		(14)
Total income from operations	Total income from operations	$	193	$	210	Total income from operations	$	342	$	193

~~14.~~13. 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 March 31,				Three Months Ended March 31,
(in millions)	(in millions)	2020	2019	(in millions)	2021	2020
Shares subject to performance conditions	Shares subject to performance conditions	1.4	1.3	Shares subject to performance conditions	0.7	1.4
Shares subject to anti-dilutive stock-based awards	Shares subject to anti-dilutive stock-based awards	1.0	0.6	Shares subject to anti-dilutive stock-based awards	0.3	1.0

Total shares excluded from diluted earnings per share	Total shares excluded from diluted earnings per share	2.4	1.9	Total shares excluded from diluted earnings per share	1.0	2.4

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.

14. Subsequent Events

On April 1, 2021 the Company acquired the 40% non-controlling interest in Q2 Solutions from Quest Diagnostics Incorporated for $760 million, financed with cash on hand. The transaction will result in the Company having 100% ownership in Q2 Solutions. The Company previously held a controlling interest in, and consolidated the financial results of the joint venture. The transaction will be recorded in the second quarter of 2021.

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, ~~2019~~2020 (our ~~“2019~~“2020 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, business 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;~~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 enter into new contracts; the market for our services may not grow as we expect; we may be unable to successfully develop and market new services or enter new markets; imposition of restrictions on our use of data by data suppliers or their refusal to license data to us; any failure by us to comply with contractual, regulatory or ethical requirements under our contracts, including current or 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 operate, 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 integrate, and achieve expected benefits from, our acquired businesses. For a further discussion of the risks relating to our business, see Part I—Item 1A—“Risk Factors” in our ~~2019~~2020 Form 10-K, as updated in this Quarterly Report on 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~~clinical research services to the life sciences industry. IQVIA ~~applies human~~creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data ~~science – leveraging~~resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility — enabling customers to accelerate 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~~of innovative medical treatments that improve healthcare outcomes. Powered by the IQVIA CORE™, we deliver unique and actionable insights at the intersection of large scale analytics, transformative technology and extensive domain expertise as well as execution capabilities.outcomes for patients. With approximately ~~67,000~~72,000 employees, we conduct operations in more than 100 countries.

We are a global leader in protecting individual patient privacy. We use a wide variety of privacy-enhancing technologies and safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better

outcomes. Our insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances, in an effort to advance their path toward cures.

We ~~manage our business~~are managed 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~~real world insights and services to our life science ~~customers.~~ clients. Research & Development Solutions, which primarily serves biopharmaceutical ~~customers,~~clients, 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~~clients and the broader healthcare market.

~~Recent Developments~~

IQVIA began 2020 with the same financial and operational momentum with which it closed 2019, with all three of the Company’s reportable segments performing to expectations in January and February. 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 selling 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 impacted all three of our reportable segments, with a disproportionate impact to our Research & Development Solutions business. Research & Development Solutions exited the first quarter of 2020, with approximately 70 percent of global sites being temporarily inaccessible. This led to a reduction in on-site monitoring visits from the expected activity in the period pre-COVID-19 and operational disruption to the clinical research sites which impacted patient recruitment, patient study participation, limitations on our ability to travel and access clinical research sites and 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 the impact. Additionally, new trial start-up activities have been delayed as a result of these sites being inaccessible; however, the Company has not experienced any COVID-19 related trial cancellations. Similarly, in our Technology & Analytics Solutions segment, the portion of our Real-World business that requires site monitoring activity also experienced a decline in the month of March as a result of sites being inaccessible, which led to a reduction in the associated revenue. 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. 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. However, for the first quarter of 2020, the impact to Contract Sales and Medical Solutions revenue was immaterial.

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 March 31, 2020, cash and cash equivalents were $$927 million and the Company had available borrowing capacity of $1.4 billion under its $1.5 billion revolving credit facility. At March 31, 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 the Company's credit arrangements.

Sources of Revenue

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

Table of ~~the impact from COVID-19 on first quarter business activity.~~contents

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 three months of ~~2020,~~2021, approximately 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 March 31,						Change							Three Months Ended March 31,			Change
(in millions)	(in millions)	2020		2019		$		%		(in millions)	2021		2020		$		%
Revenues	Revenues	$	2,754	$	2,684	$	70	2.6	%	Revenues	$	3,409	$	2,754	$	655	23.8

For the first quarter of ~~2020,~~2021, our revenues increased ~~$70~~$655 million, or ~~2.6%~~23.8%, as compared to the same period in ~~2019.~~2020. This increase was comprised of constant currency revenue growth of approximately ~~$98~~$588 million, or ~~3.7%. The constant currency revenue growth was comprised of~~21.4%, reflecting a ~~$59 million increase in Technology & Analytics Solutions, a $34~~$405 million increase in Research & Development Solutions, ~~and a $5~~an $8 million ~~increase~~decrease in Contract Sales & Medical ~~Solutions. See Part I—Item 2—“Recent Developments"~~Solutions, and a $191 million increase in ~~this Quarterly Report on Form 10-Q for a discussion~~Technology & Analytics Solutions.

Costs of Revenue, exclusive of Depreciation and Amortization


		Three Months Ended March 31,										Three Months Ended March 31,
(in millions)	(in millions)	2020			2019			(in millions)	2021			2020
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization	$	1,824		$	1,748		Costs of revenue, exclusive of depreciation and amortization	$	2,293		$	1,824
% of revenues	% of revenues	66.2		%	65.1		%	% of revenues	67.3		%	66.2		%

The ~~$76~~$469 million increase in costs of revenues, exclusive of depreciation and amortization, for the three months ended March 31, ~~2020~~2021 as compared to the same period in ~~2019~~2020 included a constant currency ~~increase~~growth of approximately ~~$104~~$410 million, or ~~5.9%. The constant currency increase consisted of~~22.5%, reflecting a ~~$41 million increase in Technology & Analytics Solutions, a $61~~$305 million increase in Research & Development Solutions, ~~and~~ a $2$14 million ~~increase~~decrease in Contract Sales & Medical Solutions, and an $119 million increase in Technology & Analytics Solutions.

Selling, General and Administrative Expenses


		Three Months Ended March 31,										Three Months Ended March 31,
(in millions)	(in millions)	2020			2019			(in millions)	2021			2020
Selling, general and administrative expenses	Selling, general and administrative expenses	$	407		$	419		Selling, general and administrative expenses	$	442		$	407
% of revenues	% of revenues	14.8		%	15.6		%	% of revenues	13.0		%	14.8		%

The ~~$12~~$35 million ~~decrease~~increase in selling, general and administrative expenses for the three months ended March 31, ~~2020~~2021 as compared to the same period in ~~2019~~2020 included a constant currency ~~decline~~growth of approximately $7$25 million, or ~~1.7%. The constant currency decline primarily consisted of~~6.1%, reflecting a ~~$14~~$3 million decrease in Research & Development Solutions, an $1 million decrease in Technology & Analytics Solutions, a $2 million decrease in Contract Sales & Medical Solutions, offset by a $31 million increase in general corporate and unallocated ~~expenses, offset by a $1 million increase in Technology & Analytics Solutions, and a $6 million increase in Research & Development Solutions.~~expenses.

Depreciation and Amortization


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Depreciation and amortization	Depreciation and amortization	316		295		Depreciation and amortization	323		316
% of revenues	% of revenues	11.5	%	11.0	%	% of revenues	9.5	%	11.5	%

The ~~$21~~$7 million increase in depreciation and amortization in the three months ended March 31, ~~2020~~2021 as compared to the same ~~periods~~period in ~~2019~~2020 was primarily due to higher intangible asset balances as a result of acquisitions occurring in ~~2019,~~2020 and increased amortization due to higher capitalized software ~~balances, and accelerated depreciation on an internal-use software asset.~~balances.

Restructuring Costs


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Restructuring costs	Restructuring costs	$	14	$	12	Restructuring costs	$	9	$	14

The restructuring costs incurred during ~~2020~~2021 were due to ongoing efforts to streamline our global operations. The remaining actions under these plans are expected to occur throughout ~~2020~~2021 and into ~~2021~~2022 and are expected to consist of consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements.

Interest Income and Interest Expense


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Interest income	Interest income	$	(2)	$	(2)	Interest income	$	(1)	$	(2)
Interest expense	Interest expense	$	106	$	110	Interest expense	$	99	$	106

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

Interest expense during the three months ended March 31, ~~2020~~2021 was lower than the same ~~periods~~period in ~~2019~~2020 due to lower interest rates attributed to lower LIBOR rates and the redemption of the ~~$800~~€1,425 million of ~~4.875%~~3.250% senior notes due ~~2023,~~2025, partially offset by an increase in the average debt outstanding. See “Liquidity and Capital Resources” for more information on this transaction.

Loss on Extinguishment of Debt


	Three Months Ended March 31,
(in millions)	2021		2020
Loss on extinguishment of debt	$	24	$	—

During the three months ended March 31, 2021, we recognized a loss on extinguishment of debt for fees and expenses incurred related to the refinancing of our 3.250% senior notes due 2025.

Other ~~Expense (Income),~~Income, Net


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Other income, net	Other income, net	$	(13)	$	(7)	Other income, net	$	(37)	$	(13)

Other income, net for the three months ended March 31, ~~2020~~2021 increased as compared to the same ~~periods~~period in the prior year, primarily due to foreign currency gain, ~~partially offset by loss~~as well as gain on investments in mutual funds.

Income Tax Expense


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Income tax expense	Income tax expense	$	17	$	41	Income tax expense	$	44	$	17

Our effective income tax rate was ~~16.7%~~17.1% and ~~37.6%~~16.7% in the first quarter of ~~2020~~2021 and ~~2019,~~2020, respectively. Our effective income tax ~~expense~~rate in the first quarter of ~~2020~~2021 and ~~2019~~2020 was favorably impacted by ~~$21~~$17 million and ~~$9.4~~$21 million, respectively, as a result of excess tax benefits onrecognized upon settlement of share-based compensation awards. Also, our effective income tax rate in the first quarter 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 quarter of 2019 the U.S. Treasury Department issued final regulations on the transition tax and proposed regulations on Foreign Derived Intangible Income (“FDII”). While the final regulations related to the transition tax did not have a material impact on us, the proposed guidance on FDII had an unfavorable impact. Although the proposed guidance for FDII is 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 for this impact. It is expected that during 2020 the U.S. Treasury Department will issue final regulations on FDII.

Equity in Earnings of Unconsolidated Affiliates


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Equity in earnings (loss) of unconsolidated affiliates		$	6	$	(1)
Equity in earnings of unconsolidated affiliates						Equity in earnings of unconsolidated affiliates	$	4	$	6

Equity in earnings of unconsolidated affiliates for the three months ended March 31, ~~2020 increased as compared to~~2021 remained relatively consistent with the same ~~periods~~period in the prior ~~year, primarily related to higher earnings from our investment in NovaQuest Pharma Opportunities Fund III.~~year.

Net Income Attributable to Non-controlling Interests


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Net income attributable to non-controlling interests	Net income attributable to non-controlling interests	$	(9)	$	(9)	Net income attributable to non-controlling interests	$	(5)	$	(9)

Net income attributable to non-controlling interests ~~primarily~~ included Quest Diagnostics Incorporated’s interest in Q² Solutions. On April 1, 2021 the Company acquired the 40% non-controlling interest in Q2 Solutions from Quest Diagnostics Incorporated which will result in a decrease in the net income attributable to non-controlling interests in future periods. See Note 14 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding this transaction.

Segment Results of Operations

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


Three Months Ended March 31, 2020 and 2019
Three Months Ended March 31, 2021 and 2020										Three Months Ended March 31, 2021 and 2020
		Segment Revenues						Segment Profit							Segment Revenues				Segment Profit
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2021		2020		2021		2020
Technology & Analytics Solutions	Technology & Analytics Solutions	$	1,117	$	1,075	$	268	$	258	Technology & Analytics Solutions	$	1,348	$	1,117	$	349	$	268
Research & Development Solutions	Research & Development Solutions	1,441		1,416		268		289		Research & Development Solutions	1,868		1,441		362		268
Contract Sales & Medical Solutions	Contract Sales & Medical Solutions	196		193		11		9		Contract Sales & Medical Solutions	193		196		20		11
Total	Total	2,754		2,684		547		556		Total	3,409		2,754		731		547
General corporate and unallocated	General corporate and unallocated					(24)		(39)		General corporate and unallocated					(57)		(24)
Depreciation and amortization	Depreciation and amortization					(316)		(295)		Depreciation and amortization					(323)		(316)
Restructuring costs	Restructuring costs					(14)		(12)		Restructuring costs					(9)		(14)
Consolidated	Consolidated	$	2,754	$	2,684	$	193	$	210	Consolidated	$	3,409	$	2,754	$	342	$	193

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.

Technology & Analytics Solutions


		Three Months Ended March 31,						Change						Three Months Ended March 31,			Change
(in millions)	(in millions)	2020		2019		$		%	(in millions)	2021		2020		$		%
Revenues	Revenues	$	1,117	$	1,075	$	42	3.9	Revenues	$	1,348	$	1,117	$	231	20.7
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization	666		633		33		5.2	Costs of revenue, exclusive of depreciation and amortization	812		666		146		21.9
Selling, general and administrative		183		184		(1)		(0.5)
Selling, general and administrative expenses									Selling, general and administrative expenses	187		183		4		2.2
Segment profit	Segment profit	$	268	$	258	$	10	3.9	Segment profit	$	349	$	268	$	81	30.2

Revenues

Technology & Analytics Solutions’ revenues were ~~$1,117~~$1,348 million for the first quarter of ~~2020,~~2021, an increase of ~~$42~~$231 million, or ~~3.9%~~20.7%, over the same period in ~~2019.~~2020. This increase was comprised of constant currency revenue growth of approximately ~~$59~~$191 million, or ~~5.5%. The constant currency growth for the three months ended March 31, 2020 resulted primarily from~~17.1%, reflecting revenue growth ~~in the Americas region as well as the Europe and Africa region.~~across all regions. The revenue growth in these regions was driven by higher real-world and analytical ~~services. See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the impact from~~services and COVID-19 ~~on first quarter Technology & Analytics Solutions business activity.~~related work.

Costs of Revenue, exclusive of Depreciation and Amortization

Technology & Analytics Solutions’ costs of revenue increased ~~$33~~$146 million, or ~~5.2%~~21.9%, in the first quarter of ~~2020~~2021 over the same period in ~~2019.~~2020. This increase included a constant currency increase of approximately ~~$41~~$119 million, or ~~6.5%.~~

~~The constant currency increase for the three ended March 31, 2020 was primarily due to~~17.9%, reflecting an increase in compensation and related expenses to support revenue growth.

Selling, General and Administrative Expenses

Technology & Analytics Solutions’ selling, general and administrative expenses ~~decreased $(1)~~increased $4 million, or ~~(0.5)%~~2.2%, in the first quarter of ~~2020~~2021 as compared to the same period in ~~2019,~~2020, which included a ~~positive impact of approximately $2 million from the effects of foreign currency fluctuations.~~

~~The~~ constant currency decrease ~~for~~of approximately $1 million, or (0.5)%, reflecting the ~~three months ended March 31, 2020 was primarily related to~~impact of on-going cost ~~saving initiatives.~~containment actions.

Research & Development Solutions


		Three Months Ended March 31,						Change							Three Months Ended March 31,			Change
(in millions)	(in millions)	2020		2019		$		%		(in millions)	2021		2020		$		%
Revenues	Revenues	$	1,441	$	1,416	$	25	1.8	%	Revenues	$	1,868	$	1,441	$	427	29.6
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization	988		946		42		4.4	%	Costs of revenue, exclusive of depreciation and amortization	1,321		988		333		33.7
Selling, general and administrative expenses	Selling, general and administrative expenses	185		181		4		2.2	%	Selling, general and administrative expenses	185		185		—		—
Segment profit	Segment profit	$	268	$	289	$	(21)	(7.3)	%	Segment profit	$	362	$	268	$	94	35.1

Backlog

Research & Development Solutions’ contracted backlog increased from ~~$19.0~~$22.6 billion atas of December 31, ~~2019~~2020 to ~~$19.6~~$23.2 billion atas of March 31, ~~2020~~2021 and we expect approximately ~~$4.9~~$6.5 billion of this backlog to convert to revenue in the next twelve months.

Table of ~~the impact from COVID-19 on first quarter Contract Sales & Medical Solutions business activity.~~contents

Revenues

Research & Development Solutions’ revenues were ~~$1,441~~$1,868 million in the first quarter of ~~2020,~~2021, an increase of ~~$25~~$427 million, or ~~1.8%~~29.6%, over the same period in ~~2019.~~2020. This increase was comprised of constant currency revenue ~~growth~~increase of approximately ~~$34~~$405 million, or ~~2.4%. The constant currency growth for the three months ended March 31, 2020 primarily included~~28.1%, reflecting volume-related increases in clinical services ~~data management, global functional resourcing~~ and lab ~~testing. See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion of the impact~~testing, including incremental revenue from large COVID-19 ~~on first quarter Research & Development Solutions business activity.~~vaccine clinical trials.

Costs of Revenue, exclusive of Depreciation and Amortization

Research & Development Solutions’ costs of revenue increased ~~$42~~$333 million, or ~~4.4%~~33.7%, in the first quarter of ~~2020~~2021 over the same period in ~~2019.~~2020. This increase included a constant currency increase of approximately ~~$61~~$305 million, or ~~6.4%.~~

~~The constant currency increase for the three months ended March 31, 2020 was primarily related to~~30.9%, reflecting an increase in compensation and related expenses ~~to support revenue growth.~~as a result of volume-related increases in clinical services and lab testing.

Selling, General and Administrative Expenses

Research & Development Solutions’ selling, general and administrative expenses ~~increased $4 million, or 2.2%,~~remained flat in the first quarter of ~~2020~~2021 as compared to the same period in ~~2019, which includes~~2020, and included a constant currency ~~increase~~decrease of approximately $6$3 million, or ~~3.3%~~(1.6)%.

~~The constant currency increase for the three months ended March 31, 2020 was primarily related to an increase in compensation and related expenses from higher headcount to support growth.~~

Contract Sales & Medical Solutions


		Three Months Ended Three Months Ended March 31,						Change							Three Months Ended March 31,			Change
(in millions)	(in millions)	2020		2019		$		%		(in millions)	2021		2020		$		%
Revenues	Revenues	$	196	$	193	$	3	1.6	%	Revenues	$	193	$	196	$	(3)	(1.5)
Costs of revenue, exclusive of depreciation and amortization	Costs of revenue, exclusive of depreciation and amortization	170		169		1		0.6	%	Costs of revenue, exclusive of depreciation and amortization	160		170		(10)		(5.9)
Selling, general and administrative expenses	Selling, general and administrative expenses	15		15		—		—		Selling, general and administrative expenses	13		15		(2)		(13.3)
Segment profit	Segment profit	$	11	$	9	$	2	22.2	%	Segment profit	$	20	$	11	$	9	81.8

Revenues

Contract Sales & Medical Solutions’ revenues were ~~$196~~$193 million in the first quarter of ~~2020, an increase~~2021, a decrease of $3 million, or ~~1.6%~~(1.5)%, over the same period in ~~2019.~~2020. This ~~increase includes~~decrease included a constant currency revenue ~~increase~~decrease of approximately $5$8 million, or ~~2.6%. The constant currency~~(4.1)%, reflecting a volume decrease in the Americas region, partially offset by a volume increase ~~for the three months ended March 31, 2020 was largely due to volume increases~~ in the Asia-Pacific region. ~~See Part I—Item 2—“Recent Developments" in this Quarterly Report on Form 10-Q for a discussion~~

Costs of Revenue, exclusive of Depreciation and Amortization

Contract Sales & Medical Solutions’ costs of revenue ~~increased $1~~decreased $10 million, or ~~0.6%~~(5.9)%, in the first quarter of ~~2020~~2021 as compared to the same period in ~~2019.~~2020. This ~~increase~~decrease included a constant currency ~~increase~~decrease of approximately $2$14 million, or ~~1.2%. The constant currency increase for the three months ended March 31, 2020 was due to an increase~~(8.2)%, reflecting a decrease in compensation and related expenses ~~to support revenue growth.~~as a result of reduced volume in the Americas region.

Selling, General and Administrative Expenses

Contract Sales & Medical Solutions’ selling, general and administrative expenses ~~remained flat~~decreased $2 million, or (13.3)%, in the first quarter of ~~2020~~2021 as compared to the same period in ~~2019.~~2020. This decrease included a constant currency decrease of approximately $2 million, or (13.3)%, reflecting a decrease in compensation and related expenses.

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 and other 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 ~~$927~~$2,305 million atas of March 31, ~~2020~~2021 ($~~342~~933 million of which was in the United States), an increase from ~~$837~~$1,814 million atas of December 31, ~~2019.~~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 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. 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.

On April 1, 2021 the Company acquired the 40% non-controlling interest in Q2 Solutions from Quest Diagnostics Incorporated for $760 million, financed with cash on hand. See Note 14 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding this transaction.

Equity Repurchase Program

During the three months ended March 31, ~~2020,~~2021, we repurchased ~~2,106,403~~265,809 shares of our common stock for ~~approximately $321.4~~$50.5 million under the Repurchase Program. ~~These amounts include 1,000,000 shares of our common stock repurchased from certain Selling Stockholders in a private transaction for an aggregate purchase price of approximately $164.3 million.~~ See Note 98 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 March 31, ~~2020,~~2021, we have remaining authorization to repurchase up to approximately ~~$1.0~~$0.9 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.

Debt

Senior ~~Secured Facilities~~

Notes

On March ~~11, 2020,~~3, 2021, we ~~entered into an amendment to~~completed the ~~Credit Agreement to borrow $900 million~~issuance and sale of €1,450,000,000 in ~~additional U.S. Dollar denominated term A loans~~gross proceeds of the Issuer's (i) €550,000,000 aggregate principal amount of its 1.750% Senior Notes due ~~2023.~~2026 (the “2026 Notes”) and (ii) €900,000,000 aggregate principal amount of its 2.250% Senior Notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The proceeds from the ~~additional term A loans~~Notes offering were used to ~~repay outstanding revolving credit loans under our senior secured credit facilities. On March 30, 2020, we prepaid $100 million~~redeem all of the ~~additional term A loans.~~Issuer’s outstanding 3.250% senior notes due 2025 (the “3.250% Notes”), including the payment of premiums in respect thereof and to pay fees and expenses related to the Notes offering. See Note 87 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 March 31, ~~2020,~~2021, we had ~~$12.1~~$12.3 billion of total indebtedness, excluding ~~$1.4~~$1.5 billion of additional available borrowings under our revolving credit facility.

Our long-term debt arrangements contain customary restrictive covenants and, as of March 31, ~~2020,~~2021, 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.~~

Three months ended March 31, ~~2020~~2021 and ~~2019~~2020

Cash Flow from Operating Activities


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Net cash provided by operating activities	Net cash provided by operating activities	$	163	$	113	Net cash provided by operating activities	$	867	$	163

Cash provided by operating activities increased ~~$50~~$704 million during the first three months of ~~2020~~2021 as compared to the same period in ~~2019.~~2020. The increase iswas primarily due to ~~higher receipts associated with loyalty card programs we administer on behalf of our~~an increase in cash collections from clients ~~and normal fluctuations~~resulting in a decrease in accounts ~~payable.~~receivable and unbilled services ($132 million), an increase in unearned income ($294 million), higher cash related net income ($165 million) and higher cash from other operating assets and liabilities ($113 million).

Cash Flow from Investing Activities


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Net cash used in investing activities	Net cash used in investing activities	$	(150)	$	(315)	Net cash used in investing activities	$	(176)	$	(150)

Cash used in investing activities ~~decreased $165~~increased $26 million during the first three months of ~~2020~~2021 as compared to the same period in ~~2019. This decrease was comprised~~2020 primarily ofdriven by lower payments received from unconsolidated affiliates ($18 million) and increased cash used for the ~~acquisition~~purchase of ~~businesses, net of cash acquired~~property and equipment ($~~160~~8 million).

Cash Flow from Financing Activities


		Three Months Ended March 31,							Three Months Ended March 31,
(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Net cash provided by financing activities		$	107	$	228
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	$	(168)	$	107

Cash ~~provided by~~used in financing activities ~~decreased $121~~increased $275 million during the first three months of ~~2020~~2021 as compared to the same period in ~~2019. The decrease in cash provided by financing activities was~~2020 primarily due to an increase in cash used in repayment of revolving credit facility, net of proceeds ($665 million), an increase in cash used to repurchase common stock ($200 million) and less cash from employee stock option plans ($50 million) partially offset by an increasea decrease in cash provided by proceeds from debt issuances, net of repayments and debt issuance costs ($~~789~~803 million) and an increase in cash payments related to employee stock option plans ($15 million), offset by a decrease in cash used in repayments of revolving credit facilities, net of proceeds ($260 million), and a decrease in cash used to repurchase common stock ($283 million).

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations and Commitments

We have various contractual obligations, which are recorded as liabilities in our consolidated financial statements.

With the exception of new senior ~~secured credit facilities~~notes disclosed in Note 87 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes, outside of the ordinary course of business, to our contractual obligations as previously disclosed in our ~~2019~~2020 Form 10-K.

Application of Critical Accounting Policies

There have been no material changes to our critical accounting policies as previously disclosed in our ~~2019~~2020 Form 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 ~~2019~~2020 Form 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.

2926

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 ~~2019~~2020 Form 10-K. There have been no material changes from the risk factors previously disclosed in our ~~Annual Report, except as set forth below. The risk factor set forth below updates, and should be read together with, the risk factors disclosed in “Item 1A. Risk Factors,” in our 2019~~2020 Form 10-K.

~~Our business and operations may be adversely affected by the novel coronavirus (COVID-19) pandemic.~~

The outbreak of the novel coronavirus, or COVID-19, and the various governmental, industry and consumer actions related thereto, could have a material and adverse effect on our business, financial condition and results of operations. These effects, which largely depend on future developments that cannot be accurately predicted and are uncertain, could include a negative impact on the availability of our key personnel, temporary closures of our facilities or the facilities of our business partners, customers, suppliers, third party service providers or other vendors, an increased risk of customer defaults or delays in payments or purchasing decisions, and the interruption of domestic and global supply chains, distribution channels, liquidity and capital or financial markets.

~~As COVID-19 continues to spread, we have and may continue to experience disruptions that could severely impact our business, including:~~

•~~closure or inaccessibility of clinical site locations;~~

•~~delays or difficulties in enrolling patients in our clinical trials and starting new clinical trials;~~

•~~delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;~~

•~~interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others;~~

•~~delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; and~~

•~~significant disruption in our businesses that rely on face-to-face interactions or are dependent on in-person gatherings, events or conferences.~~

In addition, we have directed a substantial portion of our workforce to work from home while the outbreak persists in order to help minimize the risk of COVID-19 to our employees. Having a significant portion of our workforce working from home could cause an increased risk of loss of productivity, greater cybersecurity risk, and increased risk to our system of internal controls over financial reporting.

~~Further, the effects of the pandemic may also increase our cost of capital or make additional capital more difficult or available only on terms less favorable to us.~~

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

Recent Sales of Unregistered Securities

Not applicable.

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~~an equity repurchase program (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~~$2 billion, $1.5 billion, and $2.0 billion in 2015, 2016, 2017, 2018, and 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, extended, suspended or discontinued at any time. The timing and amount of repurchases are determined by our management based on a variety of factors such as the market price of our common stock, our corporate requirements, and overall market conditions. Purchases of our common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or in privately negotiated transactions. The Repurchase Program for common stock does not have an expiration date. 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.

From inception of the Repurchase Program through March 31, ~~2020,~~2021, we have repurchased a total of ~~$6.7~~$6.4 billion of our securities under the Repurchase Program.

As of March 31, ~~2020,~~2021, we have remaining authorization to repurchase up to approximately ~~$1.0~~$0.9 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 ~~65.0~~65.9 million shares of our common stock at an average market price per share of ~~$96.64~~$97.66 for an aggregate purchase price of ~~$6.3~~$6.4 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.

The following table summarizes the monthly equity repurchase program activity for the three months ended March 31, ~~2020~~2021 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
January 1, 2020 — January 31, 2020 — $ — — $ 1,341
February 1, 2020 — February 29, 2020 1.7 $ 162.78 1.7 $ 1,065
March 1, 2020 — March 31, 2020 0.4 $ 110.53 0.4 $ 1,019
2.1 2.1


(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
January 1, 2021 — January 31, 2021	—	—	—	$	918
February 1, 2021 — February 28, 2021	—	—	—	$	918
March 1, 2021 — March 31, 2021	0.3	189.95	0.3	$	867
	0.3		0.3

3128

Amendment No. 7 to Fourth Amended and Restated Credit Agreement, dated March 11, 2020, among IQVIA Inc., IQVIA Holdings Inc., the other guarantors party thereto, Bank of America, N.A. as administrative agent and collateral agent, and the Incremental Term A-2 Dollar Lenders.

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~~

~~10.1~~

~~10.2~~

Amendment No. 8 to Fourth Amended and Restated Credit Agreement, dated March 30, 2020, among IQVIA Inc., IQVIA Holdings Inc., the other guarantors party thereto, Bank of America, N.A. as administrative agent and collateral agent, and the Incremental Term A-2 Dollar Lenders.

~~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.~~

~~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.~~

~~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.~~

~~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.~~

~~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.

~~104~~

~~Cover 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.~~

Incorporated by Reference

Exhibit
Number

Exhibit Description

Filed
Herewith

Form

File No.

Exhibit

Filing Date

3.1

Amended and Restated Certificate of Incorporation of IQVIA Holdings Inc., effective April 13, 2021.

8-K

001-35907

3.1

April 16, 2021

4.1

Indenture, dated March 3, 2021, among IQVIA Inc., as Issuer, U.S. Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer, as guarantors.

8-K

001-35907

4.1

March 3, 2021

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.

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.

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.

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.

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 (unaudited) 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.

104

Cover 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.

3229