IQVIA HOLDINGS INC. 10-Q

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, 2020 (our “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, 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 2020 Form 10-K, as updated in this Quarterly Report on Form 10-Q. Overview IQVIA is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology, big data resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility — enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve healthcare outcomes for patients. With approximately 74,000 employees, we conduct operations in more than 100 countries. 19 Table of contents 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 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 insights and services to our life science clients. Research & Development Solutions, which primarily serves biopharmaceutical 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 clients and the broader healthcare market. Sources of Revenue Total revenues are comprised of revenues from the provision of our services. We do not have material product revenues. Costs and Expenses Our costs and expenses are comprised primarily of our costs of revenue, which include reimbursed expenses, and selling, general and administrative expenses. Costs of revenue include compensation and benefits for billable employees and personnel involved in production, data management and delivery, and the costs of acquiring and processing data for our information offerings; costs of staff directly involved with delivering technology-related services offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements; costs related to facilities; costs related to training and expenses for information technology (“IT”), reimbursed expenses that are comprised principally of payments to investigators who oversee clinical trials and travel expenses for our clinical monitors and sales representatives; and other expenses directly related to service contracts such as courier fees, laboratory supplies, professional services and travel expenses. Selling, general and administrative expenses include costs related to sales, marketing, and administrative functions (including human resources, legal, finance and general management) for compensation and benefits, travel, professional services, facilities and training and expenses for IT. Foreign Currency Translation In the first six months of 2021, approximately 35% of our revenues were denominated in currencies other than the United States dollar, which represents approximately 60 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 revenues and expenses of our foreign operations are generally denominated in local currencies and translated into United States dollars for financial reporting purposes. Accordingly, exchange rate fluctuations will affect the translation of foreign results into United States dollars for purposes of reporting our condensed consolidated results. As a result, we believe that reporting results of operations that exclude the effects of foreign currency rate fluctuations on certain financial results can facilitate analysis of period-to-period comparisons. This constant currency information assumes the same foreign currency exchange rates that were in effect for the comparable prior-year period were used in translation of the current period results. Consolidated Results of Operations For information regarding our results of operations for Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical Solutions, refer to “Segment Results of Operations” later in this section. Revenues Three Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 3,438 $ 2,521 $ 917 36.4 % 20 Table of contents For the second quarter of 2021, our revenues increased $917 million, or 36.4%, as compared to the same period in 2020. This increase was comprised of constant currency revenue growth of approximately $838 million, or 33.2%, reflecting an $199 million increase in Technology & Analytics Solutions, a $626 million increase in Research & Development Solutions, and a $13 million increase in Contract Sales & Medical Solutions. Six Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 6,847 $ 5,275 $ 1,572 29.8 % For the first six months of 2021, our revenues increased $1,572 million, or 29.8%, as compared to the same period in 2020. This increase was comprised of constant currency revenue growth of approximately $1,426 million, or 27.0%. The constant currency revenue growth was comprised of a $390 million increase in Technology & Analytics Solutions, a $1,031 million increase in Research & Development Solutions, and a $5 million increase in Contract Sales & Medical Solutions . Costs of Revenue, exclusive of Depreciation and Amortization Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Costs of revenue, exclusive of depreciation and amortization $ 2,323 $ 1,704 $ 4,616 $ 3,528 % of revenues 67.6 % 67.6 % 67.4 % 66.9 % The $619 million increase in costs of revenue, exclusive of depreciation and amortization, for the three months ended June 30, 2021 as compared to the same period in 2020 included a constant currency growth of approximately $536 million, or 31.5%, reflecting an $119 million increase in Technology & Analytics Solutions, a $412 million increase in Research & Development Solutions, and a $5 million increase in Contract Sales & Medical Solutions. The $1,088 million increase in costs of revenue, exclusive of depreciation and amortization, for the six months ended June 30, 2021 as compared to the same period in 2020 included a constant currency growth of approximately $946 million, or 26.8%, reflecting a $238 million increase in Technology & Analytics Solutions, a $717 million increase in Research & Development Solutions, and a $(9) million decrease in Contract Sales & Medical Solutions. Selling, General and Administrative Expenses Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Selling, general and administrative expenses $ 482 $ 431 $ 924 $ 838 % of revenues 14.0 % 17.1 % 13.5 % 15.9 % The $51 million increase in selling, general and administrative expenses for the three months ended June 30, 2021 as compared to the same period in 2020 included a constant currency growth of approximately $36 million, or 8.4%, reflecting a $7 million increase in Technology & Analytics Solutions, a $14 million increase in Research & Development Solutions, and a $17 million increase in general corporate and unallocated expenses, offset by a $(2) million decrease in Contract Sales & Medical Solutions. The $86 million increase in selling, general and administrative expenses for the six months ended June 30, 2021 as compared to the same period in 2020 included a constant currency growth of approximately $61 million, or 7.3%, reflecting a $6 million increase in Technology & Analytics Solutions, an $11 million increase in Research & Development Solutions, and a $48 million increase in general corporate and unallocated expenses, offset by a $(4) million decrease in Contract Sales & Medical Solutions. Depreciation and Amortization Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Depreciation and amortization 343 308 666 624 % of revenues 10.0 % 12.2 % 9.7 % 11.8 % 21 Table of contents The $35 million and $42 million increases in depreciation and amortization in the three and six months ended June 30, 2021 as compared to the same periods in 2020 was primarily due to higher intangible asset balances as a result of acquisitions occurring in 2020 and 2021, increased amortization due to higher capitalized software balances, and accelerated amortization related to intangibles impacted by the acquisition of Quest's non-controlling interest. Restructuring Costs Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Restructuring costs $ 4 $ 16 $ 13 $ 30 The restructuring costs incurred during 2021 were due to ongoing efforts to streamline our global operations. The remaining actions under these plans are expected to occur throughout 2021 and into 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 June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Interest income $ (1) $ (1) $ (2) $ (3) Interest expense $ 94 $ 108 $ 193 $ 214 Interest income includes interest received primarily from bank balances and investments. Interest expense during the three and six months ended June 30, 2021 was lower than the same periods in 2020 due to lower interest rates attributed to lower LIBOR rates and the redemption of the €1,425 million of 3.250% senior notes due 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 June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Loss on extinguishment of debt $ — $ 12 $ 24 $ 12 During the six months ended June 30, 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 Income, Net Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Other income, net $ (29) $ (32) $ (66) $ (45) Other income, net for the three months ended June 30, 2021 decreased as compared to the same period in the prior year, primarily due to less investment gain on marketable securities, offset by less foreign currency loss. Other income, net for the six months ended June 30, 2021 increased as compared to the same period in the prior year, primarily due to foreign currency gain, offset by less investment gain on marketable securities. 22 Table of contents Income Tax Expense (Benefit) Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Income tax expense (benefit) $ 48 $ (5) $ 92 $ 12 Our effective income tax rate was 21.6% and 20.0% in the second quarter of 2021 and 2020, respectively, and 19.2% and 15.6% in the first six months of 2021 and 2020 . Our effective income tax rate in the second quarter and in the first six months of 2021 and 2020 was favorably impacted as a result of excess tax benefits recognized upon settlement of share-based compensation awards. For the second quarter of 2021 and 2020 this impact was $6 million and $5 million, respectively, and for the first six months of 2021 and 2020 this impact was $23 million and $26 million, respectively. Also, our effective income tax rate in the first six months of 2020 was unfavorably impacted by a $10 million discrete tax expense related to change in the measurement of U.S. tax on undistributed foreign earnings. Equity in Earnings (Loss) of Unconsolidated Affiliates Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Equity in earnings (loss) of unconsolidated affiliates $ 1 $ (1) $ 5 $ 5 Equity in earnings (loss) of unconsolidated affiliates for the three and six months ended June 30, 2021 remained relatively consistent with the same periods in the prior year. Net Income Attributable to Non-controlling Interests Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Net income attributable to non-controlling interests $ — $ (2) $ (5) $ (11) Net income attributable to non-controlling interests included Quest Diagnostics Incorporated’s interest in Q 2 Solutions. On April 1, 2021 the Company acquired the 40% non-controlling interest in Q 2 Solutions from Quest Diagnostics Incorporated which resulted in a decrease in the net income attributable to non-controlling interests for the three and six months ended June 30, 2021 as compared to prior periods. See Note 9 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 June 30, 2021 and 2020 Segment Revenues Segment Profit (in millions) 2021 2020 2021 2020 Technology & Analytics Solutions $ 1,353 $ 1,109 $ 352 $ 276 Research & Development Solutions 1,891 1,235 343 162 Contract Sales & Medical Solutions 194 177 20 11 Total 3,438 2,521 715 449 General corporate and unallocated (82) (63) Depreciation and amortization (343) (308) Restructuring costs (4) (16) Consolidated $ 3,438 $ 2,521 $ 286 $ 62 23 Table of contents Six Months Ended June 30, 2021 and 2020 Segment Revenues Segment Profit (in millions) 2021 2020 2021 2020 Technology & Analytics Solutions $ 2,701 $ 2,226 $ 701 $ 544 Research & Development Solutions 3,759 2,676 705 430 Contract Sales & Medical Solutions 387 373 40 22 Total 6,847 5,275 1,446 996 General corporate and unallocated (139) (87) Depreciation and amortization (666) (624) Restructuring costs (13) (30) Consolidated $ 6,847 $ 5,275 $ 628 $ 255 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 June 30, Change (in millions) 2021 2020 $ % Revenues $ 1,353 $ 1,109 $ 244 22.0 % Costs of revenue, exclusive of depreciation and amortization 808 655 153 23.4 Selling, general and administrative expenses 193 178 15 8.4 Segment profit $ 352 $ 276 $ 76 27.5 % Six Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 2,701 $ 2,226 $ 475 21.3 % Costs of revenue, exclusive of depreciation and amortization 1,620 1,321 299 22.6 Selling, general and administrative 380 361 19 5.3 Segment profit $ 701 $ 544 $ 157 28.9 % Revenues Technology & Analytics Solutions’ revenues were $1,353 million for the second quarter of 2021, an increase of $244 million, or 22.0%, over the same period in 2020. This increase was comprised of constant currency revenue growth of approximately $199 million, or 17.9%, reflecting revenue growth across all regions. Technology & Analytics Solutions’ revenues were $2,701 million for the first six months of 2021, an increase of $475 million, or 21.3%, over the same period in 2020. This increase was comprised of constant currency revenue growth of approximately $390 million, or 17.5%, reflecting revenue growth across all regions. The revenue growth for the three months ended June 30, 2021 was driven by higher technology, real-world and analytical services and COVID-19 related work. The revenue growth for the six months ended June 30, 2021 was driven by higher real-world and analytical services and COVID-19 related work. Costs of Revenue, exclusive of Depreciation and Amortization Technology & Analytics Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $153 million, or 23.4%, in the second quarter of 2021 over the same period in 2020. This increase included a constant currency increase of approximately $119 million, or 18.2%. 24 Table of contents Technology & Analytics Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $299 million, or 22.6%, in the first six months of 2021 over the same period in 2020. This increase included a constant currency increase of approximately $238 million, or 18.0%. The constant currency increase for the three and six months ended June 30, 2021 was primarily related to an increase in compensation and related expenses to support revenue growth. Selling, General and Administrative Expenses Technology & Analytics Solutions’ selling, general and administrative expenses increased $15 million, or 8.4%, in the second quarter of 2021 as compared to the same period in 2020, which included a constant currency increase of approximately $7 million, or 3.9%. Technology & Analytics Solutions’ selling, general and administrative expenses increased $19 million, or 5.3%, in the first six months of 2021 as compared to the same period in 2020, which included a constant currency increase of approximately $6 million, or 1.7%. The constant currency increase for the three and six months ended June 30, 2021 was primarily related to an increase in compensation and related expenses. Research & Development Solutions Three Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 1,891 $ 1,235 $ 656 53.1 % Costs of revenue, exclusive of depreciation and amortization 1,355 898 457 50.9 Selling, general and administrative expenses 193 175 18 10.3 Segment profit $ 343 $ 162 $ 181 111.7 % Six Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 3,759 $ 2,676 $ 1,083 40.5 % Costs of revenue, exclusive of depreciation and amortization 2,676 1,886 790 41.9 Selling, general and administrative expenses 378 360 18 5.0 Segment profit $ 705 $ 430 $ 275 64.0 % Backlog Research & Development Solutions’ contracted backlog increased from $22.6 billion as of December 31, 2020 to $23.9 billion as of June 30, 2021 and we expect approximately $6.6 billion of this backlog to convert to revenue in the next twelve months. Revenues Research & Development Solutions’ revenues were $1,891 million in the second quarter of 2021, an increase of $656 million, or 53.1%, over the same period in 2020. This increase was comprised of constant currency revenue increase of approximately $626 million, or 50.7%, reflecting revenue growth across all regions. Research & Development Solutions’ revenues were $3,759 million in the first six months of 2021, an increase of $1,083 million, or 40.5%, over the same period in 2020. This increase was comprised of constant currency revenue increase of approximately $1,031 million, or 38.5%, reflecting revenue growth across all regions. The revenue growth for the three and six months ended June 30, 2021 was primarily the result of volume-related increases in clinical services and lab testing, including incremental revenue from large COVID-19 vaccine clinical trials. 25 Table of contents Costs of Revenue, exclusive of Depreciation and Amortization Research & Development Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $457 million, or 50.9%, in the second quarter of 2021 over the same period in 2020. This increase included a constant currency increase of approximately $412 million, or 45.9%. Research & Development Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $790 million, or 41.9%, in the first six months of 2021 over the same period in 2020. This increase included a constant currency increase of approximately $717 million, or 38.0%. The constant currency increase for the three and six months ended June 30, 2021 was primarily related to an increase in compensation and related expenses 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 $18 million, or 10.3% in the second quarter of 2021 as compared to the same period in 2020, and included a constant currency increase of approximately $14 million, or 8.0%. Research & Development Solutions’ selling, general and administrative expenses increased $18 million, or 5.0% in the first six months of 2021 as compared to the same period in 2020, and included a constant currency increase of approximately $11 million, or 3.1%. The constant currency increase for the three and six months ended June 30, 2021 was primarily related to an increase in compensation and related expenses. Contract Sales & Medical Solutions Three Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 194 $ 177 $ 17 9.6 % Costs of revenue, exclusive of depreciation and amortization 160 151 9 6.0 Selling, general and administrative expenses 14 15 (1) (6.7) Segment profit $ 20 $ 11 $ 9 81.8 % Six Months Ended June 30, Change (in millions) 2021 2020 $ % Revenues $ 387 $ 373 $ 14 3.8 % Costs of revenue, exclusive of depreciation and amortization 320 321 (1) (0.3) Selling, general and administrative expenses 27 30 (3) (10.0) Segment profit $ 40 $ 22 $ 18 81.8 % Revenues Contract Sales & Medical Solutions’ revenues were $194 million in the second quarter of 2021, an increase of $17 million, or 9.6%, over the same period in 2020. This increase included a constant currency revenue increase of approximately $13 million, or 7.3%. Contract Sales & Medical Solutions’ revenues were $387 million in the first six months of 2021, an increase of $14 million, or 3.8%, over the same period in 2020. This increase included a constant currency revenue increase of approximately $5 million, or 1.3%. The revenue growth for the three and six months ended June 30, 2021 was largely due to a volume increase in the Asia-Pacific region. 26 Table of contents Costs of Revenue, exclusive of Depreciation and Amortization Contract Sales & Medical Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $9 million, or 6.0%, in the second quarter of 2021 as compared to the same period in 2020. This increase included a constant currency increase of approximately $5 million, or 3.3%, primarily as a result of an increase in compensation and related expenses. Contract Sales & Medical Solutions’ costs of revenue, exclusive of depreciation and amortization, decreased $(1) million, or (0.3)%, in the first six months of 2021 as compared to the same period in 2020. This decrease included a constant currency decrease of approximately $(9) million, or (2.8)%, primarily as a result of a decrease in compensation and related expenses. Selling, General and Administrative Expenses Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $(1) million, or (6.7)%, in the second quarter of 2021 as compared to the same period in 2020. This decrease included a constant currency decrease of approximately $(2) million, or (13.3)%. Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $(3) million, or (10.0)%, in the first six months of 2021 as compared to the same period in 2020. This decrease included a constant currency decrease of approximately $(4) million, or (13.3)%. The constant currency decrease for the three and six months ended June 30, 2021 was primarily related to 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 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 $1,807 million as of June 30, 2021 ( $924 million of which was in the United States), a decrease from $1,814 million as of December 31, 2020. Based on our current operating plan, we believe that our available cash and cash equivalents, future cash flows from operations and our ability to access funds under our revolving 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. 27 Table of contents Equity Repurchase Program During the six months ended June 30, 2021, we repurchased 459,309 shares of our common stock for $95.5 million under the Repurchase Program. See Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding the Repurchase Program. As of June 30, 2021, we have remaining authorization to repurchase up to approximately $0.8 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 Notes On March 3, 2021, we completed the issuance and sale of €1,450,000,000 in gross proceeds of the Issuer's (i) €550,000,000 aggregate principal amount of its 1.750% Senior Notes due 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 Notes offering were used to redeem all of the 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 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional details regarding our credit arrangements. As of June 30, 2021, we had $12.4 billion of total indebtedness, excluding $1.5 billion of additional available borrowings under our revolving credit facility. Our long-term debt arrangements contain customary restrictive covenants and, as of June 30, 2021, we believe we were in compliance with our restrictive covenants in all material respects. Six months ended June 30, 2021 and 2020 Cash Flow from Operating Activities Six Months Ended June 30, (in millions) 2021 2020 Net cash provided by operating activities $ 1,406 $ 635 Cash provided by operating activities increased $771 million during the first six months of 2021 as compared to the same period in 2020. The increase was primarily due to higher cash related net income ($474 million), an increase in cash collections from unearned income ($298 million) and higher cash from other operating assets and liabilities ($24 million), offset by a decrease in cash from accounts receivable and unbilled services ($25 million). Cash Flow from Investing Activities Six Months Ended June 30, (in millions) 2021 2020 Net cash used in investing activities $ (361) $ (369) Cash used in investing activities decreased $8 million during the first six months of 2021 as compared to the same period in 2020 primarily driven by less cash used for acquisitions of businesses ($27 million), offset by lower payments received from unconsolidated affiliates ($18 million). Cash Flow from Financing Activities Six Months Ended June 30, (in millions) 2021 2020 Net cash (used in) provided by financing activities $ (1,031) $ 34 28 Table of contents Cash used in financing activities increased $1,065 million during the first six months of 2021 as compared to the same period in 2020 primarily due to an increase in debt and principal payments ($1,039 million), cash payments for the acquisition of Quest's non-controlling interest ($756 million), an increase in cash payments on contingent consideration and deferred purchase price accruals ($22 million), and an increase in cash payments related to employee stock option plans ($14 million), offset by a decrease in cash used in repayments of revolving credit facilities, net of proceeds ($360 million), a decrease in cash used to repurchase common stock ($239 million), an increase in cash provided by proceeds from debt issuances, net of repayments and debt issuance costs ($162 million), and a decrease in cash distributions to non-controlling interests ($5 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 notes disclosed in Note 7 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 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 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 2020 Form 10-K.