What changed in this filing

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Item 1. Financial Statements

2020-07-23 compared with 2020-04-30 · 188 added, 103 removed, 479 unchanged (38% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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

(in millions, except per share data)

2020 2019 2020 2019

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

6 unchanged sentences

Interest expense 108 114 214 224

Other income, net ( 13 ) ( 7 )

Income before income taxes and equity in earnings of unconsolidated affiliates

Income tax expense 17 41

Income before equity in earnings of unconsolidated affiliates

Equity in earnings (loss) of unconsolidated affiliates 6 ( 1 )

Net income 91 67

Loss on extinguishment of debt 12 — 12 —

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

(Loss) Income before income taxes and equity in earnings of unconsolidated affiliates

( 25 ) 78 77 187

Income tax (benefit) expense ( 5 ) 8 12 49

(Loss) Income before equity in earnings of unconsolidated affiliates

( 20 ) 70 65 138

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

Net (loss) income ( 21 ) 71 70 138

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

Net income attributable to IQVIA Holdings Inc.

Earnings per share attributable to common stockholders:

Net (loss) income attributable to IQVIA Holdings Inc.

$ ( 23 ) $ 60 $ 59 $ 118

Loss (earnings) per share attributable to common stockholders:

Basic $ ( 0.12 ) $ 0.31 $ 0.31 $ 0.60

4 unchanged sentences

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

Table of co ntents

IQVIA HOLDINGS INC.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2020 2019 2020 2019

Net (loss) income

$ ( 21 ) $ 71 $ 70 $ 138

Comprehensive income (loss) adjustments:

Unrealized losses on derivative instruments, net of income tax benefit of ($ 7 ) and ($ 1 )

Foreign currency translation, net of income tax expense of $ 23 and $ 30

Unrealized gains (losses) on derivative instruments, net of income tax (benefit) expense of $( 3 ), $( 4 ), $( 11 ), $( 5 )

7 ( 13 ) ( 32 ) ( 18 )

Foreign currency translation, net of income tax (benefit) expense of $( 29 ), $( 22 ), $( 6 ), $ 8

45 62 ( 110 ) 31

Reclassification adjustments:

Losses (gains) on derivative instruments included in net income, net of income tax expense (benefit) of $ 0 and ($ 1 )

Comprehensive (loss) income

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

( 12 ) ( 3 ) 4 ( 4 )

Comprehensive income (loss)

19 117 ( 68 ) 147

Comprehensive income attributable to non-controlling interests

Comprehensive (loss) income attributable to IQVIA Holdings Inc.

( 1 ) ( 10 ) ( 6 ) ( 20 )

Comprehensive income (loss) attributable to IQVIA Holdings Inc.

$ 18 $ 107 $ ( 74 ) $ 127

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

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IQVIA HOLDINGS INC.

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

Current assets:

30 unchanged sentences

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;

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

253.0 shares issued and 192.3 shares outstanding at December 31, 2019

1 unchanged sentence

Retained earnings 1,057 998

Treasury stock, at cost, 62.8 and 60.7 shares at March 31, 2020 and December 31, 2019, respectively

Treasury stock, at cost, 62.8 and 60.7 shares at June 30, 2020 and December 31, 2019, respectively

( 6,065 ) ( 5,733 )

5 unchanged sentences

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

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IQVIA HOLDINGS INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in millions)

4 unchanged sentences

Stock-based compensation

(Earnings) loss from unconsolidated affiliates ( 6 ) 1

Loss (gain) on investments, net 8 ( 3 )

Earnings from unconsolidated affiliates ( 5 ) —

Gain on investments, net ( 14 ) ( 5 )

Benefit from deferred income taxes

2 unchanged sentences

Change in accounts receivable, unbilled services and unearned income

( 84 ) ( 76 )

Change in other operating assets and liabilities

14 unchanged sentences

Payment of debt issuance costs

( 33 ) ( 11 )

Repayment of debt and principal payments on capital lease obligations

8 unchanged sentences

Contingent consideration and deferred purchase price payments

( 16 ) ( 20 )

Net cash provided by financing activities 34 28

3 unchanged sentences

Cash and cash equivalents at end of period

$ 1,109 $ 938

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

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IQVIA HOLDINGS INC.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

Retained Earnings

(in millions) Common

Shares Treasury

Shares Common

Stock Additional

Capital Retained Earnings Treasury

Stock Accumulated

Comprehensive

(Loss) Income

(Loss) Income Non-

Interests Total

Balance, December 31, 2019 253.0 ( 60.7 ) $ 3 $ 11,046 $ 998 $ ( 5,733 ) $ ( 311 ) $ 260 $ 6,263

8 unchanged sentences

Balance, March 31, 2020 253.8 ( 62.8 ) 3 11,009 1,080 ( 6,065 ) ( 485 ) 260 5,802

Issuance of common stock 0.3 — — 1 — — — — 1

Stock-based compensation — — — 30 — — — — 30

Net (loss) income — — — — ( 23 ) — — 2 ( 21 )

Unrealized losses on derivative instruments, net of tax

— — — — — — 7 — 7

Foreign currency translation, net of tax — — — — — — 46 ( 1 ) 45

Reclassification adjustments, net of tax — — — — — — ( 12 ) — ( 12 )

Balance, June 30, 2020 254.1 ( 62.8 ) $ 3 $ 11,040 $ 1,057 $ ( 6,065 ) $ ( 444 ) $ 261 $ 5,852

IQVIA HOLDINGS INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

11 unchanged sentences

Balance, March 31, 2019 252.2 ( 55.0 ) $ 3 $ 10,924 $ 865 $ ( 4,915 ) $ ( 262 ) $ 250 $ 6,865

Issuance of common stock 0.4 — — 8 — — — — 8

Repurchase of common stock — ( 1.8 ) — 0 — ( 236 ) — — ( 236 )

Stock-based compensation — — — 29 — — — — 29

Distribution to non-controlling interest — — — 0 — — — ( 2 ) ( 2 )

Net income — — — — 60 — — 11 71

Unrealized losses on derivative instruments, net of tax — — — — — — ( 13 ) — ( 13 )

Foreign currency translation, net of tax — — — — — — 63 ( 1 ) 62

Reclassification adjustments, net of tax — — — — — — ( 3 ) — ( 3 )

Balance, June 30, 2019 252.6 ( 56.8 ) $ 3 $ 10,961 $ 925 $ ( 5,151 ) $ ( 215 ) $ 258 $ 6,781

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

Table of co ntents

IQVIA HOLDINGS INC.

15 unchanged sentences

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.

As such, the results for the three and six months ended June 30, 2020 may not be indicative of results for the full year.

Recently Issued Accounting Standards

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The adoption of this new accounting guidance did not have a material effect on the Company’s consolidated financial statements.

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In January 2017, the FASB issued new accounting guidance that simplifies the measurement of goodwill by eliminating the step two impairment test.

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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 and 2019:

Three Months Ended March 31, 2020

The following tables represent revenues by geographic region and reportable segment for the three and six months ended June 30, 2020 and 2019:

Three Months Ended June 30, 2020

(in millions)

9 unchanged sentences

$ 1,109 $ 1,235 $ 177 $ 2,521

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Three Months Ended March 31, 2019

Three Months Ended June 30, 2019

(in millions)

9 unchanged sentences

$ 1,102 $ 1,435 $ 203 $ 2,740

No customer accounted for 10% or more of consolidated revenues for the three months ended March 31, 2020 or 2019.

Six Months Ended June 30, 2020

(in millions) Technology & Analytics Solutions Research & Development Solutions Contract Sales & Medical Solutions Total

Americas $ 1,148 $ 1,198 $ 171 $ 2,517

Europe and Africa 797 803 90 1,690

Asia-Pacific 281 675 112 1,068

Total revenues $ 2,226 $ 2,676 $ 373 $ 5,275

Six Months Ended June 30, 2019

(in millions) Technology &

Analytics Solutions Research &

Development Solutions Contract Sales &

Medical Solutions Total

Americas $ 1,142 $ 1,283 $ 194 $ 2,619

Europe and Africa 759 904 100 1,763

Asia-Pacific 276 664 102 1,042

Total revenues $ 2,177 $ 2,851 $ 396 $ 5,424

No customer accounted for 10% or more of consolidated revenues for the three and six months ended June 30, 2020 or 2019.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2020, approximately $ 22.0 billion of revenue is expected to be recognized in the future from remaining performance obligations.

As of June 30, 2020, approximately $ 22.6 billion of revenue is expected to be recognized in the future from remaining performance obligations.

The Company expects to recognize revenue on approximately 35 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

3 unchanged sentences

(in millions)

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Trade accounts receivable:

7 unchanged sentences

Unbilled services and unearned income were as follows:

(in millions) March 31, 2020 December 31, 2019 Change

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

Unbilled services

3 unchanged sentences

$ 224 $ 272 $ ( 48 )

Unbilled services, which is comprised of approximately equal parts of unbilled receivables and contract assets as of March 31, 2020, increased by $ 55 million as compared to December 31, 2019.

Unbilled services, which is comprised of approximately 60 % of unbilled receivables and 40 % of contract assets as of June 30, 2020, decreased by $ 1 million as compared to December 31, 2019.

Contract assets are unbilled services for which invoicing is based on the timing of certain milestones related to service contracts for clinical research whereas unbilled receivables are billable upon the passage of time.

Unearned income increased by $ 22 million over the same period resulting in an increase of $ 33 million in the net balance of unbilled services and unearned income between December 31, 2019 and March 31, 2020.

Growth in the net balance is driven by the difference in timing of revenue recognition in accordance with 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 and 2019.

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Unearned income increased by $ 47 million over the same period resulting in a decrease of $ 48 million in the net balance of unbilled services and unearned income between December 31, 2019 and June 30, 2020.

The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, 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 and six months ended June 30, 2020 and 2019.

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.

These operating leases expire at various dates through 2029 with options to cancel certain leases at various intervals.

The Company also has finance leases for office and lab spaces that expire in 2044.

Based on the timing of payments on the finance leases the cash flow impact is not material for the three and six months ended June 30, 2020.

In determining the lease term at lease commencement, the Company includes the noncancellable term and the periods which the Company deems it is reasonably certain to exercise or not to exercise a renewal or cancellation option.

The components of lease expense were as follows:

(in millions)

Classification

Three Months Ended March 31, 2020 Three Months Ended March 31, 2019

(in millions) Classification Three Months Ended June 30, 2020 Three Months Ended June 30, 2019

Operating lease cost (1)

Selling, general and administrative expenses $ 53 $ 47

Finance lease cost (1)

Depreciation and amortization, and Interest expense 1 —

Total lease cost $ 54 $ 47

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

Operating lease cost (1)

Selling, general and administrative expenses $ 102 $ 95

Finance lease cost (1)

Depreciation and amortization, and Interest expense 1 —

Total lease cost $ 103 $ 95

(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

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

Supplemental Cash Flow:

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Finance leases 3.18 % —

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

Future minimum lease payments under non-cancellable leases as of June 30, 2020 were as follows:

(in millions) Operating Leases Finance Leases

4 unchanged sentences

Total $ 556 $ 120

Reported as of March 31, 2020:

Reported as of June 30, 2020:

Other current liabilities $ 154 $ —

2 unchanged sentences

Total $ 556 $ 120

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

The following is a summary of goodwill by reportable segment for the six months ended June 30, 2020:

(in millions)

6 unchanged sentences

( 51 ) ( 48 ) 3 ( 96 )

Balance as of March 31, 2020 $ 10,251 $ 1,598 $ 140 $ 11,989

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

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:

1 unchanged sentence

Balance Sheet Classification

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

Derivatives designated as hedging instruments:

5 unchanged sentences

— 60 1,800 — 27 875

Interest rate caps

Deposits and other assets

Derivatives not designated as hedging instruments:

5 unchanged sentences

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 June 30, Six Months Ended June 30,

(in millions)

2020 2019 2020 2019

Foreign exchange forward contracts

$ — $ ( 5 ) $ ( 6 ) $ ( 4 )

Interest rate derivatives

( 10 ) ( 15 ) ( 33 ) ( 24 )

The amount of foreign exchange gains 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 was $ 114 million.

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$ ( 10 ) $ ( 20 ) $ ( 39 ) $ ( 28 )

The amount of foreign exchange losses related to the net investment hedge included in the cumulative translation adjustment component of accumulated other comprehensive loss (“AOCI”) for the six months ended June 30, 2020 was $ 8 million.

Fair Value Measurements

10 unchanged sentences

This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values at March 31, 2020 and December 31, 2019 due to their short-term nature.

At March 31, 2020 and December 31, 2019, the fair value of total debt approximated $ 11,751 million and $ 11,925 million, respectively, as determined under Level 1 and Level 2 measurements for these financial instruments.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values at June 30, 2020 and December 31, 2019 due to their short-term nature.

At June 30, 2020 and December 31, 2019, the fair

value of total debt approximated $ 12,135 million and $ 11,925 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:

The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of June 30, 2020:

(in millions) Level 1 Level 2 Level 3 Total

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

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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:

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

Contingent Consideration

5 unchanged sentences

Revaluations included in earnings and foreign currency translation adjustments

Balance as of March 31 $ 98 $ 137

Balance as of June 30 $ 111 $ 108

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

Unobservable Input Weighted average probability of target achievement Range of potential payment

Revenue target 86 % 0 %- 100 %

2 unchanged sentences

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.

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.

Credit Arrangements

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

The following is a summary of the Company’s revolving credit facilities at June 30, 2020:

Interest Rates

$ 1,500 million (revolving credit facility)

LIBOR in the relevant currency borrowed plus a margin of 1.50 % at March 31, 2020

LIBOR in the relevant currency borrowed plus a margin of 1.50 % at June 30, 2020

$ 25 million (receivables financing facility)

LIBOR Market Index Rate (1.89% at March 31, 2020) plus 0.90 %

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

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

Bank’s base rate of 0.10% at March 31, 2020 plus 1 %

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Bank’s base rate of 0.10 % at June 30, 2020 plus 1 %

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

(in millions) March 31, 2020 December 31, 2019

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

Senior Secured Credit Facilities:

24 unchanged sentences

2.25 % Senior Notes due 2028—Euro denominated

2.875 % Senior Notes due 2028—Euro denominated

Receivables financing facility due 2022—U.S.

4 unchanged sentences

Long-term debt $ 11,965 $ 11,545

Contractual maturities of long-term debt are as follows at March 31, 2020:

Contractual maturities of long-term debt are as follows at June 30, 2020:

(in millions)

1 unchanged sentence

Thereafter 8,024

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

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At June 30, 2020, there were bank guarantees totaling approximately £ 0.9 million (approximately $ 1.1 million) issued against the availability of the general banking facility.

Senior Secured Credit Facilities

At March 31, 2020, 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, which consisted of $ 6,140 million principal amounts of debt outstanding (as detailed in the table above), $ 3 million of standby letters of credit and $ 1,397 million of available borrowing capacity on the $ 1,500 million revolving credit facility.

At June 30, 2020, 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 $ 7.6 billion, which consisted of $ 6.1 billion principal amounts of debt outstanding (as detailed in the table above), $ 1.5 billion of available borrowing capacity on the revolving credit facility and standby letters of credit.

On March 11, 2020, the Company entered into Amendment No.

7 unchanged sentences

On March 30, 2020, the Company prepaid $ 100 million of the TLA-2 loans.

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.

On June 24, 2020, IQVIA Inc.

(the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and sale of € 711,000,000 in gross proceeds of the Issuer’s 2.875 % senior notes due 2028 (the “ 2.875 % Notes”).

The 2.875 % Notes were issued pursuant to an Indenture, dated June 24, 2020, among the Issuer, U.S.

Bank National Association, as trustee of the Notes, and certain subsidiaries of the Issuer as guarantors.

The 2.875 % Notes are unsecured obligations of the Issuer, will mature on June 15, 2028 and bear interest at the rate of 2.875 % per year, with interest payable semiannually on June 15 and December 15 of each year, beginning on December 15, 2020.

The Issuer may redeem the 2.875 % Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to June 15, 2023 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 1.438 % to 0.000 %.

The proceeds from the 2.875 % Notes offering were used to redeem all of the Issuer’s outstanding 3.500 % senior notes due 2024 (the “ 3.500 % Notes”), including the payment of premiums in respect thereof, to repay a portion of the existing borrowings under the Issuer’s revolving credit facility and to pay fees and expenses related to the offering.

The Issuer’s obligations with respect to the 3.500 % Notes were discharged on the same day as the Issuer completed the issuance of the 2.875 % Notes, and the 3.500 % Notes were redeemed on July 9, 2020.

Restrictive Covenants

2 unchanged sentences

The Company’s long-term debt arrangements contain other usual and customary restrictive covenants that, among other things, place limitations on the Company’s ability to declare dividends.

At 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.

At June 30, 2020, the Company was in compliance with the financial covenants under its debt agreements in all material respects and does not have material uncertainty about ongoing ability to meet the covenants of the Company's credit arrangements.

Stockholders’ Equity

1 unchanged sentence

The Company is authorized to issue 1.0 million shares of preferred stock, $ 0.01 per share par value.

No shares of preferred stock were issued or outstanding as of March 31, 2020 or December 31, 2019.

No shares of preferred stock were issued or outstanding as of June 30, 2020 or December 31, 2019.

Equity Repurchase Program

During the three months ended March 31, 2020, the Company repurchased 2,106,403 shares of its common stock for approximately $ 321.4 million under the Repurchase Program.

Since the COVID-19 outbreak became a pandemic in March, the company temporarily suspended share repurchase activity.

During the six months ended June 30, 2020, the Company repurchased 2,106,403 shares of its common stock for approximately $ 321.4 million under the Repurchase Program.

These amounts include 1,000,000 shares of our common stock repurchased from certain of the Company’s stockholders (the “Selling Stockholders”) in a private transaction for an aggregate purchase price of approximately $ 164.3 million.

As of March 31, 2020, the Company has remaining authorization to repurchase up to approximately $ 1.0 billion of its common stock under the Repurchase Program.

As of June 30, 2020, the Company has remaining authorization to repurchase up to approximately $ 1.0 billion of its common stock under the Repurchase Program.

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

3 unchanged sentences

These restructuring actions are expected to continue into 2021.

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The following amounts were recorded for the restructuring plans:

6 unchanged sentences

Foreign currency translation and other

Balance at March 31, 2020 $ 61 $ 2 $ 63

( 2 ) — ( 2 )

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

Restructuring costs are not allocated to the Company’s reportable segments as they are not part of the segment performance measures regularly reviewed by management.

The Company expects that the majority of the restructuring accruals at March 31, 2020 will be paid in 2020 and 2021.

The effective income tax rate was 16.7 % and 37.6 % in the first quarter of 2020 and 2019, respectively.

The effective income tax rate in the first quarter of 2020 and 2019 was favorably impacted by $ 21 million and $ 9.4 million, respectively, as a result of excess tax benefits recognized upon settlement of shared-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.

The Company expects that the majority of the restructuring accruals at June 30, 2020 will be paid in 2020 and 2021.

The effective income tax rate was 20.0 % and 10.3 % in the second quarter of 2020 and 2019, respectively, and 15.6 % and 26.2 % in the first six months of 2020 and 2019, respectively.

The effective income tax rate in the second quarter and first six months of 2020 and 2019 was favorably impacted as a result of excess tax benefits recognized upon settlement of share-based compensation awards.

For the second quarter of 2020 and 2019 this impact was $ 5 million and $ 8 million, respectively, and for the first six months of 2020 and 2019 this impact was $ 26 million and $ 17 million, respectively.

Also, the effective income tax rate in the first six months of 2020 was unfavorably impacted by a $ 10 million discrete tax expense related to change in the measurement of the U.S.

tax on undistributed foreign earnings.

In the first quarter of 2019 the U.S.

In the first six months 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.

Although the proposed

guidance for FDII was 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.

In July of 2020, the U.S.

Treasury Department issued final regulations regarding FDII and Global Intangible Low-Taxed Income (“GILTI”).

The Company is in the process of reviewing these regulations to determine if there will be an impact on the effective income tax rate in the subsequent period.

Comprehensive Income (Loss)

5 unchanged sentences

Reclassification adjustments

Balance at March 31, 2020 $ ( 558 ) $ ( 51 ) $ ( 16 ) $ 140 $ ( 485 )

— 5 — ( 1 ) 4

Balance at June 30, 2020 $ ( 541 ) $ ( 59 ) $ ( 16 ) $ 172 $ ( 444 )

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

1 unchanged sentence

Affected Financial Statement

Three Months Ended March 31,

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

2020 2019 2020 2019

Derivative instruments:

Foreign exchange forward contracts

$ 3 $ — $ 5 $ 1

Foreign exchange forward contracts

Other expense (income), net

( 14 ) ( 3 ) — ( 6 )

Total before income taxes

( 11 ) ( 3 ) 5 ( 5 )

Income tax (benefit) expense

Total net of income taxes

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$ ( 12 ) $ ( 3 ) $ 4 $ ( 4 )

The following table presents the Company’s operations by reportable segment.

8 unchanged sentences

The Company’s reportable segment information is presented below:

Three Months Ended March 31,

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

(in millions)

2020 2019 2020 2019

Technology & Analytics Solutions

1 unchanged sentence

Research & Development Solutions

1,235 1,435 2,676 2,851

Contract Sales & Medical Solutions

177 203 373 396

Total revenues

2,521 2,740 5,275 5,424

Costs of revenue, exclusive of depreciation and amortization

Technology & Analytics Solutions

655 656 1,321 1,289

Research & Development Solutions

898 971 1,886 1,917

Contract Sales & Medical Solutions

151 172 321 341

Total costs of revenue

1,704 1,799 3,528 3,547

Selling, general and administrative expenses

Technology & Analytics Solutions

178 188 361 372

Research & Development Solutions

175 176 360 357

Contract Sales & Medical Solutions

1 unchanged sentence

Total selling, general and administrative expenses

431 436 838 855

Segment profit

Technology & Analytics Solutions

276 258 544 516

Research & Development Solutions

162 288 430 577

Contract Sales & Medical Solutions

Total segment profit

449 562 996 1,118

General corporate and unallocated

5 unchanged sentences

Total income from operations

Table of co ntents

$ 62 $ 197 $ 255 $ 407

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 June 30, Six Months Ended June 30,

(in millions)

2020 2019 2020 2019

Shares subject to performance conditions 1.1 1.3 1.2 1.3

Shares subject to anti-dilutive stock-based awards 1.8 1.1 1.4 0.8

Dilutive shares excluded from dilutive earnings per share 3.3 — — —

Total shares excluded from diluted earnings per share 6.2 2.4 2.6 2.1

2 unchanged sentences

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.

Table of co ntents

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements