What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-16 compared with 2021-02-12 · 342 added, 459 removed, 1172 unchanged (41% of the section changed)

23 unchanged sentences

We have audited the accompanying consolidated balance sheets of IQVIA Holdings Inc.

and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

1 unchanged sentence

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

32 unchanged sentences

Loss on extinguishment of debt 26 13 24

Other (income) expense, net ( 65 ) ( 37 ) 5

Income before income taxes and equity in earnings of unconsolidated affiliates 373 352 328

Other income, net ( 130 ) ( 65 ) ( 37 )

Income before income taxes and equity in earnings (losses) of unconsolidated affiliates 1,128 373 352

Income tax expense 163 72 116

4 unchanged sentences

Net income attributable to IQVIA Holdings Inc.

$ 966 $ 279 $ 191

Earnings per share attributable to common stockholders:

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31,

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Comprehensive income adjustments:

Unrealized (losses) gains on derivative instruments, net of income tax expense (benefit) of $( 10 ), $ 4 and $( 5 )

Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $ 2 , $( 10 ) and $ 4

9 ( 30 ) ( 15 )

Defined benefit plan adjustments, net of income tax (benefit) expense of

$( 15 ), $ 5 and $( 4 )

Defined benefit plan adjustments, net of income tax expense (benefit) of $ 21 , $( 15 ) and $ 5

69 ( 54 ) ( 30 )

2 unchanged sentences

Reclassification adjustments:

Losses (gains) on derivative instruments included in net income, net of

income tax benefit of $ 3 , $ — and $ 1

10 ( 1 ) ( 12 )

Amortization of actuarial losses and prior service costs included in net income

Losses (gains) on derivative instruments included in net income, net of income tax benefit of $ 4 , $ 3 and $ —

Comprehensive income 780 417 142

Comprehensive income attributable to non-controlling interests ( 5 ) ( 32 ) ( 38 )

Comprehensive income (loss) attributable to IQVIA Holdings Inc.

Comprehensive income attributable to IQVIA Holdings Inc.

$ 775 $ 385 $ 104

35 unchanged sentences

Stockholders’ equity:

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

December 31, 2020 and 2019, $ 0.01 par value, 254.7 shares issued and 191.2 shares

outstanding at December 31, 2020;

253.0 shares issued and 192.3 shares outstanding

at December 31, 2019

Common stock and additional paid-in capital, 400.0 shares authorized as of December 31, 2021 and 2020, $ 0.01 par value, 255.8 shares issued and 190.6 shares outstanding as of December 31, 2021;

254.7 shares issued and 191.2 shares outstanding as of December 31, 2020

10,777 11,095

Retained earnings 2,243 1,277

Treasury stock, at cost, 63.5 and 60.7 shares at December 31, 2020 and 2019, respectively

Treasury stock, at cost, 65.2 and 63.5 shares as of December 31, 2021 and 2020, respectively

( 6,572 ) ( 6,166 )

18 unchanged sentences

(Earnings) loss from unconsolidated affiliates ( 6 ) ( 7 ) 9

(Gain) loss on investments, net ( 25 ) ( 43 ) 3

Gain on investments, net ( 16 ) ( 25 ) ( 43 )

Benefit from deferred income taxes ( 138 ) ( 176 ) ( 157 )

8 unchanged sentences

Acquisition of property, equipment and software ( 640 ) ( 616 ) ( 582 )

Net cash paid for acquisition of businesses ( 177 ) ( 588 ) ( 309 )

Acquisition of businesses, net of cash acquired ( 1,458 ) ( 177 ) ( 588 )

Purchases of marketable securities, net ( 10 ) ( 9 ) ( 3 )

Investments in unconsolidated affiliates, net of payments received ( 5 ) 10 —

(Investments in) proceeds from sale of equity securities ( 2 ) ( 22 ) ( 23 )

Proceeds from sale of (investments in) equity securities 5 ( 2 ) ( 22 )

Other 5 ( 2 ) 5

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Distributions to non-controlling interest, net — ( 13 ) ( 18 )

Acquisition of Quest's non-controlling interest ( 758 ) — —

Contingent consideration and deferred purchase price payments ( 42 ) ( 22 ) ( 20 )

1 unchanged sentence

Effect of foreign currency exchange rate changes on cash ( 52 ) 31 ( 5 )

Increase (decrease) in cash and cash equivalents 977 ( 54 ) ( 68 )

(Decrease) increase in cash and cash equivalents ( 448 ) 977 ( 54 )

Cash and cash equivalents at beginning of period 1,814 837 891

7 unchanged sentences

Issuance of common stock 1.5 — — 11 — — — — 11

2.0 — 1 10 — — — — 11

Repurchase of common stock — ( 6.7 ) — — — ( 963 ) — — ( 963 )

— ( 12.6 ) — — — ( 1,396 ) — — ( 1,396 )

Stock-based compensation — — — 137 — — — — 137

— — — 108 — — — — 108

Distributions to non-controlling interest

— — — — — — — ( 31 ) ( 31 )

— — — — 259 — — 25 284

Unrealized gain on derivative instruments, net of tax

— — — — — — 1 — 1

Distributions to non-controlling interest, net — — — — — — — ( 18 ) ( 18 )

Net income — — — — 191 — — 36 227

Unrealized losses on derivative instruments, net of tax — — — — — — ( 15 ) — ( 15 )

Defined benefit plan adjustments, net of tax — — — — — — ( 30 ) — ( 30 )

1 unchanged sentence

Reclassification adjustments, net of tax — — — — — — ( 1 ) — ( 1 )

Other — — — — 10 — — — 10

Balance, December 31, 2019 253 ( 60.7 ) 3 11,046 998 ( 5,733 ) ( 311 ) 260 6,263

2 unchanged sentences

Stock-based compensation — — — 90 — — — — 90

Distributions to non-controlling interest — — — — — — — ( 18 ) ( 18 )

Distributions to non-controlling interest, net — — — — — — — ( 13 ) ( 13 )

Net income — — — — 279 — — 29 308

1 unchanged sentence

Defined benefit plan adjustments, net of tax — — — — — — ( 54 ) — ( 54 )

— — — — — — ( 30 ) — ( 30 )

Foreign currency translation, net of tax — — — — — — 180 3 183

— — — — — — ( 41 ) 2 ( 39 )

Reclassification adjustments, net of tax — — — — — — 10 — 10

— — $ — $ — $ — $ — $ ( 1 ) $ — $ ( 1 )

Balance, December 31, 2020 254.7 ( 63.5 ) 3 11,092 1,277 ( 6,166 ) ( 205 ) 279 6,280

2 unchanged sentences

Stock-based compensation — — — 157 — — — — 157

Distributions to non-controlling interests, net — — — — — — — ( 13 ) ( 13 )

Acquisition of Quest's non-controlling interest, net of tax — — — ( 416 ) — — ( 10 ) ( 284 ) ( 710 )

Net income — — — — 966 — — 5 971

Unrealized losses on derivative instruments, net of tax — — — — — — ( 30 ) — ( 30 )

Unrealized gain on derivative instruments, net of tax — — — — — — 9 — 9

Defined benefit plan adjustments, net of tax — — — — — — 69 — 69

— — — — — — ( 54 ) — ( 54 )

Foreign currency translation, net of tax — — — — — — ( 281 ) — ( 281 )

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Accordingly, exchange rate fluctuations during this period may affect the Company’s profitability with respect to such contracts.

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

Cash Equivalents

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Changes in the fair values of derivative instruments that are not an effective hedge are recognized in earnings.

When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies gains or losses that were accumulated in AOCI to earnings in other expense (income), net for foreign exchange derivatives and interest expense for interest rate derivatives on the consolidated statements of income.

When it is probable that a hedged forecasted transaction will not occur, the Company discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies gains or losses that were accumulated in AOCI to earnings for foreign exchange derivatives and interest expense for interest rate derivatives on the consolidated statements of income.

Cash flows are classified consistent with the underlying hedged item.

The Company has entered, and may in the future enter, into derivative contracts (caps, swaps, forwards, calls or puts, warrants, for example) related to its debt and forecasted foreign currency transactions.

The Company designates its foreign currency denominated debt as a hedge of its net investment in certain foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with respect to the United States dollar, which is accounted for as a cash flow hedge.

The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in the cumulative translation adjustment component of AOCI with the related offset in long-term debt.

Those amounts would be reclassified from AOCI to earnings upon the sale or substantial liquidation of these net investments.

Business Combinations

The Company uses the acquisition method to account for business combinations, and accordingly, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date of the acquisition.

The Company uses significant judgments, estimates and assumptions in determining the estimated fair value of assets acquired, liabilities assumed and non-controlling interest including expected future cash flows, discount rates that reflect the risk associated with the expected future cash flows and estimated useful lives.

The Company uses significant judgments, estimates and assumptions in determining the estimated fair value of assets acquired, liabilities assumed and non-controlling interest including expected future cash flows, and discount rates that reflect the risk associated with the expected future cash flows and estimated useful lives.

The Company records and allocates to its reporting units the excess of the cost over the fair value of the net assets acquired, known as goodwill.

6 unchanged sentences

Transportation equipment

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

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

Trademarks and trade names 1 - 17 years

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The Company recognized $ 211 million, $ 267 million and $ 196 million of amortization expense in 2021, 2020 and 2019, respectively, related to software and related assets.

The carrying values of property, equipment and intangible and other long-lived assets are reviewed for recoverability if the facts and circumstances suggest that a potential impairment may have occurred.

The carrying values of property, equipment and intangible and other long-lived assets are reviewed for recoverability at the asset grouping level to determine if the facts and circumstances suggest that a potential impairment may have occurred.

If this review indicates that carrying values will not be recoverable, as determined based on undiscounted cash flow projections, the Company will record an impairment charge to reduce carrying values to estimated fair value.

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This cost-based method of revenue recognition requires the Company to make estimates of costs to complete its projects on an ongoing basis.

Significant judgment is required to evaluate

assumptions related to these estimates.

Significant judgment is required to evaluate assumptions related to these estimates.

The effect of revisions to estimates related to the transaction price or costs to complete a project are recorded in the period in which the estimate is revised.

1 unchanged sentence

however, in the event of termination, most contracts require payment for services rendered through the date of termination, as well as for subsequent services rendered to close out the contract.

The majority of revenue in our Contract Sales & Medical Solutions segment is from contract sales to the biopharmaceutical industry and broader healthcare market and recognized over time using a single measure of progress dependent on the performance obligation.

The majority of revenue in our Contract Sales & Medical Solutions segment is from contract salesforce to the biopharmaceutical industry and broader healthcare market and recognized over time using a single measure of progress dependent on the performance obligation.

Some of our Contract Sales & Medical Solutions contracts contain multiple performance obligations with distinct promises including recruiting, sales force automation and deployment of sales representatives.

5 unchanged sentences

Variable Consideration

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as performance incentives (including royalty payments or penalty clauses that can either increase or decrease the transaction price).

In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events, such as performance incentives (including royalty payments, bonuses, or penalty clauses that can either increase or decrease the transaction price).

Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration.

Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and reevaluated each reporting period.

The estimate of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company's anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and reevaluated each reporting period.

Reimbursed Expenses

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As the contracted services are subsequently performed and the associated revenue is recognized, the unearned income balance is reduced by the amount of the revenue recognized during the period.

Unearned income is classified as a current liability on the condensed consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year.

Unearned income is classified as a current liability on our consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year.

Restructuring Costs

Restructuring costs, which primarily include termination benefits and facility closure costs, are recorded at estimated value.

Restructuring costs, which primarily include termination benefits, are recorded at estimated value.

Key assumptions in determining the restructuring costs include the terms and payments that may be negotiated to terminate certain contractual obligations and the timing of employees leaving the Company.

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While the outcome of these matters could differ from management’s expectations, the Company does not believe the resolution of these matters will have a material adverse effect to the Company’s financial statements.

Certain items of income and expense are not recognized on the Company’s income tax returns and financial statements in the same year, which creates timing differences.

The income tax effect of these timing differences results in (1) deferred income tax assets that create a reduction in future income taxes and (2) deferred income tax liabilities that create an increase in future income taxes.

Recognition of deferred income tax assets is based on management’s belief that it is more likely than not that the income tax benefit associated with certain temporary differences, income tax operating loss and capital loss carryforwards and income tax credits, would be realized.

The provision for income taxes includes federal, state, local and foreign taxes.

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled.

The Company records U.S.

deferred taxes based on the Federal corporate income tax rate of 21%.

The Company accounts for tax related to Global Intangible Low-Taxed Income (“GILTI”) as a period cost when incurred.

Recognition of deferred income tax assets is based on management’s belief that it is more likely than not that the income tax benefit associated with certain temporary differences, income tax operating loss, capital loss carryforwards, and income tax credits, would be realized.

The Company records a valuation allowance to reduce its deferred income tax assets for those deferred income tax items for which it was more likely than not that realization would not occur.

3 unchanged sentences

Income tax expense is based on the distribution of profit before income tax among the various taxing jurisdictions in which we operate, adjusted as required by the income tax laws of each taxing jurisdiction.

Changes in the distribution of profits and losses

among taxing jurisdictions may have a significant impact on our effective income tax rate.

Changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on our effective income tax rate.

The Company does not consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States.

11 unchanged sentences

The Company values its stock-based compensation for restricted stock awards and restricted stock units based on the closing market price of the Company’s common stock on the date of grant.

The Company accounts for its stock-based compensation for performance awards based on the closing market price of the Company’s common stock on the date of grant and for performance awards that include market conditions based upon the Monte Carlo simulation model.

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

The Company determines if an arrangement is a lease at inception and reassesses if there are changes in terms and conditions of the contract.

Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

Finance leases are included in deposits and other assets, other current liabilities, and other liabilities on our consolidated balance sheets.

Lease assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

The operating lease ROU asset also includes any lease payments made before lease commencement and initial direct costs and excludes lease incentives.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease assets also include any lease payments made before lease commencement and initial direct costs and excludes lease incentives.

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

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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

On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method as of the beginning of the period of adoption.

Therefore, on January 1, 2019, the Company recognized and measured leases without revising the historical comparative period information or disclosures.

Earnings Per Share

2 unchanged sentences

Potentially dilutive securities include outstanding stock options and unvested restricted stock units, restricted stock and performance awards.

Employee equity share options, restricted stock units, restricted stock, performance awards and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share.

Diluted shares outstanding are calculated based on the average share price for each fiscal period using the treasury stock method.

Under the treasury stock method, the amount the employee must pay for

exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of benefits that would be recorded in additional paid-in capital when the award becomes deductible for tax purposes are assumed to be used to repurchase shares.

Equity Method Investments

The Company’s investments in and advances to unconsolidated affiliates are accounted for under the equity method if the Company exercises significant influence or has an investment in a limited partnership that is considered to be greater than minor.

These investments and advances are classified as investments in and advances to unconsolidated affiliates on the accompanying consolidated balance sheets.

Under the treasury stock method, the amount the employee must pay for exercising stock options, and the amount of compensation cost for future service that the Company has not yet recognized are assumed to be used to repurchase shares.

Investments in Unconsolidated Affiliates

The Company’s investments in unconsolidated affiliates are accounted for under the equity method if the Company exercises significant influence or has an investment in a limited partnership that is considered to be greater than minor.

These investments are classified as investments in unconsolidated affiliates on the accompanying consolidated balance sheets.

The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments in equity in earnings (losses) of unconsolidated affiliates on the accompanying consolidated statements of income.

The Company reviews its investments in and advances to unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

The Company reviews its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Treasury Stock

4 unchanged sentences

Accounting pronouncements recently adopted

In August 2018, the FASB issued new accounting guidance that clarifies and aligns the accounting for implementation costs for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

In March 2020, the FASB issued new accounting guidance that provides optional expedients and 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 Company as of March 12, 2020 through December 31, 2022.

The Company adopted this new accounting guidance on January 1, 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.

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 on January 1, 2021.

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.

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 on January 1, 2021.

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 issued but not adopted as of December 31, 2021

In March 2020, the FASB issued new accounting guidance that provides optional expedients and exceptions for applying U.S.

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 is effective for the Company as of March 12, 2020 through December 31, 2022.

The Company is currently evaluating the impact of this new accounting guidance on its credit arrangements and derivatives that reference LIBOR.

The Company does not expect the new accounting guidance to have a material effect on the Company’s consolidated financial statements.

The new accounting guidance will be effective for the Company on January 1, 2021 on a prospective basis.

Early adoption is permitted.

The Company does not expect the new accounting guidance to have a material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued new accounting guidance to clarify and simplify the accounting for income taxes.

The new accounting guidance will be effective for the Company on January 1, 2021.

Early adoption is permitted.

The Company does not expect the new accounting guidance to have a material effect on the Company’s consolidated financial statements.

In October 2021, the FASB issued new accounting guidance that requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.

Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASC 606, at fair value on the acquisition date.

Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

The new accounting guidance will be effective for the Company on January 1, 2023, with early adoption permitted.

The Company plans on adopting this new accounting guidance effective January 1, 2022.

The impact of this guidance on the Company's consolidated financial statements will depend on the size and nature of future acquisitions.

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

2 unchanged sentences

December 31, 2021

(in millions) Technology & Analytics Solutions

Research & Development Solutions

Contract Sales & Medical Solutions

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

$ 2,610 $ 3,887 $ 351 $ 6,848

4 unchanged sentences

December 31, 2020

(in millions) Technology & Analytics Solutions

Research & Development Solutions

Contract Sales & Medical Solutions

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

$ 2,413 $ 2,680 $ 326 $ 5,419

4 unchanged sentences

December 31, 2019

(in millions) Technology & Analytics Solutions

Research & Development Solutions

Contract Sales & Medical Solutions

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

$ 2,370 $ 2,693 $ 399 $ 5,462

3 unchanged sentences

$ 4,486 $ 5,788 $ 814 $ 11,088

No individual country, except for the United States and the United Kingdom, accounted for 10% or more of total revenues for the year ended December 31, 2020, 2019 and 2018.

For the year ended December 31, 2020, revenues in the United States and the United Kingdom accounted for 35 % and 10 % of total revenue, respectively.

For the year ended December 31, 2019, revenues in the United States and the United Kingdom accounted for 45 % and 10 % of total revenue, respectively.

For the year ended December 31, 2018, revenues in the United States and the United Kingdom accounted for 43 % and 11 % of total revenue, respectively.

No individual country, except for the United States, accounted for 10% or more of total revenues for the year ended December 31, 2021.

For the year ended December 31, 2021, revenues in the United States accounted for approximately 34 % of total revenues.

No individual country, except for the United States and the United Kingdom, accounted for 10% or more of total revenues for the years ended December 31, 2020 and 2019.

For the year ended December 31, 2020, revenues in the United States and the United Kingdom accounted for approximately 35 % and 10 % of total revenues, respectively.

For the year ended December 31, 2019, revenues in the United States and the United Kingdom accounted for approximately 45 % and 10 % of total revenues, respectively.

No individual customer represented 10% or more of total revenues for the years ended December 31, 2021, 2020 and 2019.

6 unchanged sentences

(in millions) 2021 2020

Trade accounts receivable

Billed $ 1,275 $ 1,181

8 unchanged sentences

Net balance $ ( 516 ) $ 11 $ ( 527 )

Unbilled services, which is comprised of approximately 60 % of unbilled receivables and 40 % of contract assets as of December 31, 2020, decreased by $ 23 million as compared to December 31, 2019.

Unbilled services, which is comprised of approximately 62 % of unbilled receivables and 38 % of contract assets as of December 31, 2021, increased by $ 46 million as compared to December 31, 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 $ 573 million over the same period resulting in a decrease of $ 527 million in the net balance of unbilled services and unearned income between December 31, 2021 and 2020.

Decrease 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.

Decrease 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 de minimis for the years ended December 31, 2021, 2020 and 2019.

Debt, Equity and Other Securities

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

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

The Company’s long-term equity investments (except those accounted for under the equity method, those that result in consolidation of the investee and certain other investments) are measured at fair value and any changes in fair value are recognized in net income at the end of each reporting period.

For equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient in Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement” (“ASC 820”) to estimate fair value using the net asset value per share of the investment, the Company applies a new measurement alternative and measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer at each reporting period.

For equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient in ASC 820, Fair Value Measurement, to estimate fair value using the net asset value per share of the investment, the Company applies the measurement alternative and measures those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer at each reporting period.

Unconsolidated Affiliates

The Company accounts for its investments in and advances to unconsolidated affiliates under the equity method of accounting and records its pro rata share of its losses or earnings from these investments in equity in earnings (losses) of unconsolidated affiliates.

The following is a summary of the Company’s investments in and advances to unconsolidated affiliates:

The Company accounts for its investments in unconsolidated affiliates under the equity method of accounting and records its pro rata share of its losses or earnings from these investments in equity in earnings (losses) of unconsolidated affiliates.

The following is a summary of the Company’s investments in unconsolidated affiliates:

(in millions) 2021 2020

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Longwood 3 10

Pappas Life Science Ventures V, L.P.

Foreign Exchange Risk Management

The Company transacts business in more than 100 countries and is subject to risks associated with fluctuating foreign exchange rates.

Accordingly, the Company enters into foreign currency forward contracts to (i) hedge certain forecasted foreign exchange cash flows arising from service contracts (“Service Contract Hedging”) and (ii) hedge non-United States dollar anticipated intercompany reseller fees (“Reseller Hedging”).

It is the Company’s policy to enter into foreign currency transactions only to the extent necessary to reduce earnings and cash flow volatility associated with foreign exchange rate movements.

The Company does not enter into foreign currency transactions for investment or speculative purposes.

The principal currencies hedged in 2020 were the British Pound and the Japanese Yen.

Service Contract Hedging and Reseller Hedging contracts are designated as cash flow hedges and are carried at fair value, with changes in the fair value recorded to AOCI.

Accordingly, the Company enters into foreign currency forward contracts to hedge certain forecasted foreign exchange cash flows arising from service contracts (“Service Contract Hedging”).

It is the Company’s policy to enter into foreign currency forward contracts only to the extent necessary to reduce earnings and cash flow volatility associated with foreign exchange rate movements.

The Company does not enter into foreign currency forward contracts for investment or speculative purposes.

The principal currency hedged in 2021 was the British Pound.

Service Contract Hedging contracts are designated as cash flow hedges and are carried at fair value, with changes in the fair value recorded to AOCI.

The change in fair value is reclassified from AOCI to earnings in the period in which the hedged transaction occurs.

These contracts have various expiration dates through September 2022.

As of December 31, 2020 and 2019, the Company had open Service Contract Hedging and Reseller Hedging contracts to hedge certain forecasted foreign currency cash flow transactions occurring in 2021 and 2020 with notional amounts totaling $ 70 million and $ 148 million, respectively.

As of December 31, 2021 and 2020, the Company had open Service Contract Hedging contracts to hedge certain forecasted foreign currency cash flow transactions occurring in 2022 and 2021 with notional amounts totaling $ 110 million and $ 70 million, respectively.

For accounting purposes these hedges are considered highly effective.

As of December 31, 2020 and 2019, the Company had recorded gross unrealized gains (losses) of $ 5 million and $ — million and $ 4 million and less than $( 1 ) million, respectively, related to these contracts.

As of December 31, 2021 and 2020, the Company had recorded gross unrealized gains (losses) of $ — million and $( 3 ) million, and $ 5 million and $ — million , respectively, related to these contracts.

Upon expiration of the hedge instruments in 2021, the Company reclassified the unrealized holding gains and losses on the derivative instruments included in AOCI into earnings.

The unrealized gains (losses) are included in other current assets and liabilities on the accompanying consolidated balance sheets as of December 31, 2020 and 2019.

The unrealized gains (losses) are included in other current assets and other liabilities on the accompanying consolidated balance sheets as of December 31, 2021 and 2020.

Interest Rate Risk Management

The Company has entered into interest rate swap agreements for purposes of managing its exposure to interest rate fluctuations.

In April 2014, IMS Health entered into United States dollar and Euro denominated interest rate swap agreements (“2014 Swaps”) to hedge interest rate exposure on notional amounts of approximately $ 600 million of its borrowings.

The 2014 Swaps commenced between April and June 2014 and expire at various times through March 2021.

As of December 31, 2020, only one of the 2014 Swaps remain unexpired, with a notional value of $ 356 million.

On this agreement, the Company pays a fixed rate of 1.6 % and receives a variable rate of interest equal to the greater of three-month Euro Interbank Offered Rate (“EURIBOR”) or the equivalent to LIBOR, and 1 %.

During 2017, the 2014 Swaps ceased to be considered highly effective for accounting purposes and as such, the Company discontinued hedge accounting and prospective changes in the fair value of the Swaps are recognized in earnings.

On June 3, 2015, the Company entered into seven forward starting interest rate swaps (“2015 Swaps”) in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below).

Interest on the swaps began accruing on June 30, 2016, and the interest rate swaps expired at various times through March 2020.

As of December 31, 2020, none

of the 2015 Swaps were still outstanding.

The Company paid a fixed rate of 2.1 % and received a variable rate of interest equal to the three-month LIBOR on these agreements.

On July 19, 2018, the Company entered into two forward starting interest rate swaps (“2018 Swaps”) with a total notional value of $ 500 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below).

Interest on the 2018 Swaps began accruing on June 28, 2019 and the interest rate swaps expire on June 28, 2024.

The Company pays a fixed rate of 3.0 % and receives a variable rate of interest equal to the three-month LIBOR on the 2018 Swaps.

On March 27, 2020, the Company entered into an interest rate swap with a notional value of $ 1 billion in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below).

Interest on the swap began accruing on March 31, 2020 and the swap expires on March 31, 2023.

The Company pays a fixed rate of 0.56 % and receives a variable rate of interest equal to the one-month LIBOR on the swap.

On June 4, 2020, the Company entered into an interest rate swap with a notional value of $ 300 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below).

Interest on the swap began accruing on June 30, 2020 and the swap expires on June 28, 2024.

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The fair value of these interest rate swaps represents the present value of the anticipated net payments the Company will make to the counterparty, which, when they occur, are reflected as interest expense on the consolidated statements of income.

These interest rate swaps will result in a total debt mix of approximately 66 % fixed rate debt and 34 % variable rate debt.

These interest rate swaps result in a total debt mix of approximately 63 % fixed rate debt and 37 % variable rate debt.

Net Investment Risk Management

As of December 31, 2020, these borrowings (net of original issue discount) were € 5,323 million ($ 6,528 million).

Those amounts would be reclassified from AOCI to earnings upon the sale or substantial liquidation of these net investments.

The amount of foreign exchange losses related to the net investment hedge included in the cumulative translation adjustment component of AOCI for the year ended December 31, 2020 was $ 561 million.

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

As of December 31, 2021, the Company's foreign currency denominated debt balance (net of original issue discount) designated as a hedge of its net investment in certain foreign subsidiaries totaled € 5,227 million ($ 5,929 million).

The amount of foreign exchange gains (losses) related to the net investment hedge included in the cumulative translation adjustment component of AOCI was $ 475 million, $( 561 ) million and $ 97 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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

December 31, 2021 December 31, 2020

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Foreign exchange forward contracts Other current assets and liabilities $ — 3 $ 110 $ 5 $ — $ 70

$ 5 — $ 70 $ 4 $ — $ 148

Interest rate swaps Other assets and liabilities 4 24 1,800 — 55 1,800

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Total derivatives $ 4 $ 27 $ 5 $ 56

The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive (loss) income is summarized in the following table:

The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive income (loss) is summarized in the following table:

Year Ended December 31,

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Total $ 27 $ ( 27 ) $ ( 20 )

The Company expects approximately $ 14 million of pre-tax unrealized losses related to its foreign exchange contracts and interest rate derivatives included in AOCI at December 31, 2020 to be reclassified into earnings within the next twelve months.

The total amount of cash flow hedge effect on the income statement is immaterial for year ended December 31, 2020.

The Company expects approximately $ 23 million of pre-tax unrealized losses related to its foreign exchange contracts and interest rate derivatives included in AOCI as of December 31, 2021 to be reclassified into earnings within the next twelve months.

The total amount of cash flow hedge effect on the income statement is immaterial for the year ended December 31, 2021.

Fair Value Measurements

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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 December 31, 2020 and 2019 due to their short-term nature.

At December 31, 2020 and 2019, the fair value of total debt approximated $ 12,746 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 as of December 31, 2021 and 2020 due to their short-term nature.

As of December 31, 2021 and 2020, the fair value of total debt approximated $ 12,255 million and $ 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 December 31, 2021:

(in millions)

(in millions) Level 1 Level 2 Level 3 Total

Marketable securities

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The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2020:

(in millions)

(in millions) Level 1 Level 2 Level 3 Total

Marketable securities

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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.

Based on the assessments of the probability of achieving specific targets, as of December 31, 2021 the Company has accrued approximately 72 % 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 year ended December 31,:

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Revaluations included in earnings and foreign currency translation adjustments ( 43 ) ( 19 ) ( 4 )

( 19 ) ( 4 ) 25

Balance as of December 31 $ 76 $ 119 $ 113

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

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

Revenue target 82 % 0 %- 100 %

EBITDA target 92 % 0 %- 100 %

Operational target 91 % 0 %- 100 %

The current portion of contingent consideration is included within accrued expenses and the long-term portion is included within other liabilities on the accompanying consolidated balance sheets.

Revaluations of contingent consideration are recognized in other expense (income), net on the accompanying consolidated statements of income.

Revaluations of contingent consideration are recognized in other income, net on the accompanying 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.

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Certain assets are carried on the accompanying consolidated balance sheets at cost and are not remeasured to fair value on a recurring basis.

These assets include equity investments that do not have readily determinable fair values that are assessed for impairment quarterly or annually and when a triggering event occurs, and goodwill and identifiable intangible assets that are tested for impairment annually and when a triggering event occurs.

These assets include equity investments that do not have readily determinable fair values that are assessed for impairment quarterly or annually, when there is an observable event, and when a triggering event occurs, and goodwill and other identifiable intangible assets that are tested for impairment annually and when a triggering event occurs.

See Note 4 and 8 for additional information.

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Goodwill —Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets resulting from business combinations.

On an annual basis and if a triggering event occurs, the Company performs a qualitative analysis to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its book value.

This includes a qualitative analysis of macroeconomic conditions, industry and market considerations, internal cost factors, financial performance, fair value history and other company specific events.

If this qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the book value for the respective reporting unit, the Company determines whether the estimated fair value of the reporting unit is in excess of its carrying value.

If the carrying value of the net assets assigned to the reporting unit exceeds the estimated fair value of the reporting unit, the Company compares the fair value with the carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the fair value.

On an annual basis, and if a triggering event occurs, the Company performs a qualitative analysis to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount.

This includes a qualitative analysis of macroeconomic conditions, industry and market considerations, cost factors, financial performance, fair value history and other company specific events.

If this qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value for the respective reporting unit, the Company would then need to calculate the fair value of the reporting unit.

If the reporting unit calculated fair value is less than the carrying amount, the Company would record an impairment charge for the difference, with the impairment charge not to exceed the carrying amount of Goodwill.

See Note 8 for additional information.

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See Note 8 for additional information.

Indefinite-lived Intangible Asset —If a triggering event occurs and a qualitative analysis indicates that it is more likely than not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name.

If the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess.

Property and Equipment

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Depreciation expense

Goodwill and Identifiable Intangible Assets

As of December 31, 2020, the Company has approximately $ 5,205 million of identifiable intangible assets, of which approximately $ 18 million, relating to a trade name, is deemed to be indefinite-lived and, accordingly, is not being amortized.

Amortization expense associated with identifiable definite-lived intangible assets was as follows:

$ 147 $ 134 $ 128

Goodwill and Other Identifiable Intangible Assets

As of December 31, 2021, the Company has approximately $ 4,943 million of other identifiable intangible assets.

Amortization expense associated with other identifiable definite-lived intangible assets was as follows:

Year Ended December 31,

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Amortization expense $ 1,117 $ 1,153 $ 1,074

Estimated amortization expense for existing identifiable intangible assets is expected to be approximately $ 1,062 million, $ 708 million, $ 605 million, $ 508 million and $ 409 million for the years ending December 31, 2021, 2022, 2023, 2024, and 2025, respectively.

Estimated amortization expense for existing other identifiable intangible assets is expected to be approximately $ 826 million, $ 748 million, $ 651 million, $ 546 million and $ 409 million for the years ending December 31, 2022, 2023, 2024, 2025 and 2026, respectively.

Estimated amortization expense can be affected by various factors, including future acquisitions or divestitures of service and/or licensing and distribution rights or impairments.

The following is a summary of identifiable intangible assets:

As of December 31, 2020 As of December 31, 2019

The following is a summary of other identifiable intangible assets:

December 31, 2021 December 31, 2020

(in millions) Gross

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Amortization Net

Definite-lived identifiable

intangible assets:

Definite-lived other identifiable intangible assets:

Client relationships and backlog $ 5,193 $ ( 2,024 ) $ 3,169 $ 5,095 $ ( 1,745 ) $ 3,350

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$ 10,286 $ ( 5,343 ) $ 4,943 $ 9,706 $ ( 4,519 ) $ 5,187

Indefinite-lived identifiable

intangible assets

Indefinite-lived other identifiable intangible assets:

Trade name $ — $ — $ — $ 18 $ — $ 18

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Balance as of December 31, 2021 $ 11,337 $ 1,802 $ 162 $ 13,301

There were no goodwill impairment losses for the years ended December 31, 2020 or 2019.

There were no goodwill impairment losses for the years ended December 31, 2021, 2020 and 2019.

Accrued Expenses

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Credit Arrangements

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

The following is a summary of the Company’s revolving credit facilities as of December 31, 2021:

Facility Interest Rates

$ 1,500 million (revolving credit facility)

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

LIBOR in the relevant currency borrowed plus a margin of 1.25 % as of December 31, 2021

$ 110 million (receivables financing facility)

LIBOR Market Index Rate ( 0.14 % at December 31, 2020) plus 0.90 %

£ 10 million (approximately $ 14 million) general banking

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

LIBOR Market Index Rate ( 0.10 % as of December 31, 2021) plus 0.90 %

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

(dollars in millions) 2021 2020

Revolving Credit Facility due 2026:

Dollar denominated borrowings—U.S.

Dollar LIBOR at average floating rates of 1.35 %

Senior Secured Credit Facilities:

Term A Loan due 2023—U.S.

Dollar LIBOR at average floating rates of 1.75 %

Term A Loan due 2023—U.S.

Term A Loan due 2026—U.S.

Dollar LIBOR at average floating rates of 1.47 %

Term A Loan due 2023—Euro — 400

Term A Loan due 2026—Euro LIBOR at average floating rates of 1.25 %

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Term B Loan due 2025—Euro LIBOR at average floating rates of 2.00 %

Revolving Credit Facility due 2023:

Dollar denominated borrowings—U.S.

Dollar LIBOR at average floating rates of 1.64 %

Japanese Yen denominated borrowings—Japanese Yen LIBOR at average floating rates of 1.50 %

5.0 % Senior Notes due 2027—U.S.

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2.875 % Senior Notes due 2028—Euro denominated

2.875 % Senior Notes due 2028—U.S.

Euro denominated

1.750 % Senior Notes due 2026—Euro denominated

2.250 % Senior Notes due 2029—Euro denominated

Receivables financing facility due 2022—U.S.

Dollar LIBOR — 240

Receivables financing facility due 2024—U.S.

Dollar LIBOR at average floating rates of 1.00 %

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Long-term debt $ 12,034 $ 12,384

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

Contractual maturities of long-term debt as of December 31, 2021 are as follows:

(in millions)

Thereafter 3,743

At December 31, 2020, there were bank guarantees totaling approximately £ 0.9 million (approximately $ 1.3 million) issued against the availability of the general banking facility with a European headquartered bank through their operations in the United Kingdom.

Senior Secured Credit Agreement and Senior Notes

Senior Secured Credit Facilities

2021 Financing Transactions

At December 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 $ 7,692 million, which consisted of $ 6,192 million principal amounts of debt outstanding (as detailed in the table above), $ 4 million of issued standby letters of credit and $ 1,496 million of available borrowing capacity on the revolving credit facility.

On June 24, 2020, IQVIA Inc.

(the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and sale of € 711 million 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 3.500 % Notes, and the 3.500 % Notes were redeemed on July 9, 2020.

On August 25, 2021, we entered into Amendment No.

9 (the “Amendment”) to the Company’s Fourth Amended and Restated Credit Agreement (the “Prior Credit Agreement,” and together with the Amendment, the "Fifth Amended and Restated Credit Agreement") to (i) extend the maturity of our revolving credit facility to 2026, (ii) refinance our existing term A loans with a new class of term A loans that mature in 2026 and (iii) add IQVIA RDS Inc.

as a borrower under our various senior secured credit facilities (collectively, the “senior secured credit facilities”).

In connection with this Amendment, we recognized a $ 2 million loss on extinguishment of debt, which includes fees and related expenses.

On September 14, 2021, we repaid $ 250 million of our term B loans under the senior secured credit facilities using the proceeds from the increased loans under our receivables financing facility.

As of December 31, 2021, the Company’s Fifth Amended and Restated Credit Agreement provided financing through the senior secured credit facilities of up to approximately $ 7,140 million, which consisted of $ 5,740 million principal amounts of debt outstanding (as detailed in the table above), and $ 1,400 million of available borrowing capacity on the $ 1,500 million revolving credit facility and standby letters of credit.

The revolving credit facility is comprised of a $ 675 million senior secured revolving facility available in U.S.

dollars, a $ 600 million senior secured revolving facility available in U.S.

dollars, Euros, Swiss Francs and other foreign currencies, and a $ 225 million senior secured revolving facility available in U.S.

dollars and Yen.

2020 Financing Transactions

As of December 31, 2020, the Prior Credit Agreement provided financing through the senior secured credit facilities of up to approximately $ 7,692 million, which consisted of $ 6,192 million principal amounts of debt outstanding (as detailed in the table above), $ 4 million of issued standby letters of credit and $ 1,496 million of available borrowing capacity on the revolving credit facility.

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

7 to the Credit Agreement to borrow $ 900 million in additional U.S.

7 to the Prior Credit Agreement to borrow $ 900 million in additional U.S.

Dollar denominated term A loans due 2023 (the “TLA-2 Loans”) and, on March 30, 2020, entered into Amendment No.

8 to the Credit Agreement to amend certain terms of the TLA-2 Loans.

8 to the Prior Credit Agreement to amend certain terms of the TLA-2 Loans.

The TLA-2 Loans bear interest based on the U.S.

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2021 Financing Transactions

At December 31, 2019, the Company’s Credit Agreement provided financing through the several senior credit facilities of approximately $ 6,811 million, which consisted of $ 5,677 million principal amounts of debt outstanding (as detailed in the table above), $ 3 million of issued standby letters of credit and $ 1,131 million of available borrowing capacity on the $ 1,500 million revolving credit facility.

On December 18, 2019, the Company entered into Amendment No.

6 to the Credit Agreement;

pursuant to the Amendment, that amended the interest rate applicable to the Issuer’s Term B Loan due 2024—U.S.

Dollar LIBOR and Term B Loan due 2025—U.S.

Dollar LIBOR was reduced to LIBOR plus 1.75 % per annum and the LIBOR floor applicable to the Issuer’s Term B-1 Dollar Loans was reduced to — % per annum.

On August 9, 2019, the Company entered into Amendment No.

5 to the Credit Agreement that repriced the Euro LIBOR floor applicable to the Euro-denominated Term B Loan due 2024 and Term B Loan due 2025 to 0 % per annum.

On August 13, 2019, the Issuer completed the issuance and sale of € 720 million in gross proceeds of the Issuer’s 2.25 % Senior Notes due 2028 (the “ 2.25 % Notes”).

The 2.25 % Notes were issued pursuant to an Indenture, dated August 13, 2019, among the Issuer, U.S.

On March 3, 2021, IQVIA Inc.

(the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and sale of € 1,450 million in gross proceeds of the Issuer's (i) € 550 million aggregate principal amount of its 1.750 % Senior Notes due 2026 (the “2026 Notes”) and (ii) € 900 million 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 net proceeds from the notes offering, together with available cash, were used to redeem the Issuer’s outstanding 2023 senior notes due 2023 (the “ 4.875 % Notes”), and to pay fees and expenses related to the notes offering.

On July 29, 2019, the Issuer issued a conditional notice of redemption with respect to the 4.875 % Notes, for a total redemption price equal to the sum of the principal amount of the 4.875 % Notes, accrued and unpaid interest on the 4.875 % Notes to the redemption date and the applicable redemption premium.

The Issuer’s obligations with respect to the 4.875 % Notes were discharged on August 13, 2019.

The 2.25 % Notes are unsecured obligations of the Issuer, will mature on January 15, 2028 and bear interest at the rate of 2.25 % per annum, with interest payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2020.

The Issuer may redeem the 2.25 % Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to July 15, 2022 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 101.125 % to 0.000 %.

On May 10, 2019, the Issuer completed the issuance and sale of $ 1.1 billion in gross proceeds of the Issuer’s 5.00 % Senior Notes due 2027 (the “ 5.00 % Notes”).

The 5.00 % Notes were issued pursuant to an Indenture, dated May 10, 2019, among the Issuer, U.S.

The 2026 Notes are unsecured obligations of the Issuer, will mature on March 15, 2026 and bear interest at the 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 Issuer, will mature on March 15, 2029 and bear interest 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 2026 Notes prior to their final stated maturity, subject to a 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 0.875 % to 0.000 % and (ii) the 2029 Notes prior to their final stated maturity, subject to a 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 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.

The Issuer’s obligations with respect to the 3.250 % Notes were discharged on the same day as the Issuer completed the issuance of the Notes.

In connection with this transaction, we recognized a $ 24 million loss on extinguishment of debt, which includes fees and related expenses.

2020 Financing Transactions

On June 24, 2020, the Issuer completed the issuance and sale of € 711 million 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 net proceeds from this notes offering were used to repay existing borrowings under the Issuer’s revolving credit facility, to pay fees and expenses related to the notes offering and for other general corporate purposes.

The 5.00 % Notes are unsecured obligations of the Issuer, will mature on May 15, 2027 and bear interest at the rate of 5.00 % per annum, with interest payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2020.

The Issuer may redeem the 5.00 % Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to May 15, 2022 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 2.500 % to 0.000 %.

Receivables Financing Facility

On November 25, 2020, the Company amended its receivables financing facility to exclude certain of its accounts receivable from the facility.

On December 19, 2019, the Company amended its receivables financing facility to extend the term of the facility to December 19, 2022.

On December 5, 2014, the Company entered into a four-year arrangement to securitize certain of its accounts receivable.

Under the receivables financing facility, certain of the Company’s accounts receivable are sold on a non-recourse basis by certain of its consolidated subsidiaries to another of its consolidated subsidiaries, a bankruptcy-remote special purpose entity (“SPE”).

On August 13, 2021, the Company amended its receivables financing facility (the “Receivables Amendment”) to extend the term of the facility to October 1, 2024 and to increase the size of the facility to $ 550 million from $ 300 million.

Under the receivables financing facility, certain of our accounts receivable are sold on a non-recourse basis by certain of our consolidated subsidiaries (each, an “Originator”) to another of our consolidated subsidiaries, a bankruptcy-remote special purpose entity (the “SPE”).

The SPE obtained a term loan and revolving loan commitment from a third-party lender, secured by liens on the assets of the SPE, to finance the purchase of the accounts receivable, which includes a $ 440 million term loan and a $ 110 million revolving loan commitment.

The revolving loan commitment may be increased by an additional $ 35 million as amounts are repaid under the term loan.

Pursuant to the Receivables Amendment, we also added three additional subsidiaries as Originators.

As of December 31, 2021, no additional amounts of revolving loans were available under the receivables financing facility.

The Company has guaranteed the performance of the obligations of existing and future subsidiaries that sell and service the accounts receivable under the receivables financing facility.

The assets of the SPE are not available to satisfy any of the Company’s obligations or any obligations of its subsidiaries.

As of December 31, 2020, there were $ 60 million of revolving loans available under the receivables financing facility.

On November 25, 2020, the Company amended its receivables financing facility to exclude certain of its accounts receivable from the facility.

Restrictive Covenants

The Company’s debt agreements provide for certain covenants and events of default customary for similar instruments, including a covenant not to exceed a specified ratio of consolidated senior secured net indebtedness to Consolidated EBITDA, as defined in the Credit 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 Credit Agreement, other actions permitted to be taken by a secured creditor.

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 Fifth Amended and Restated Credit 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 Fifth Amended and Restated Credit Agreement, other actions permitted to be taken by a secured creditor.

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

At December 31, 2020, the Company was in compliance in all material respects with the financial covenants under the Company’s financing arrangements.

As of December 31, 2021, the Company was in compliance in all material respects with the financial covenants under the Company’s financing arrangements.

The Company has operating leases for corporate offices, datacenters, motor vehicles and certain equipment, many of which contain renewal and escalation clauses.

These operating leases expire at various dates through 2036 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 yea r ended December 31, 2020 .

The Company also has finance leases for offices and lab spaces that expire at various dates through 2044.

Based on the timing of payments on the finance leases the cash flow impact is not material for the years ended December 31, 2021, 2020 and 2019.

The components of lease expense were as follows:

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Classification

Year Ended December 31, 2020 Year Ended December 31, 2019

Year Ended December 31, 2021 Year Ended December 31, 2020 Year Ended December 31, 2019

Operating lease cost (1)

Selling, general and administrative expenses

Financing lease cost (1)

$ 184 $ 209 $ 193

Finance lease cost (1)

Depreciation and amortization, and Interest expense 10 6 —

Total lease cost

$ 194 $ 215 $ 193

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

Rental expenses under lease agreements was $ 197 million in 2018.

Other information related to leases was as follows:

(in millions) Year Ended December 31, 2020 Year Ended December 31, 2019

(in millions) Year Ended December 31, 2021 Year Ended December 31, 2020 Year Ended December 31, 2019

Supplemental Cash Flow:

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Operating leases

Financing leases

$ 81 $ 109 $ 96

Finance leases

$ 44 $ 119 $ —

Weighted Average Remaining Lease Term:

Operating leases

4.53 years 4.58 years 5.01 years

Finance leases

21.28 years 24.00 years —

Financing leases

Weighted Average Discount Rate:

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3.36 % 3.78 % 4.22 %

Financing leases

Finance leases

2.70 % 3.18 % —

Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows:

(in millions) Operating Leases Financing Leases

(in millions) Operating Leases Finance Leases

2022 $ 143 $ 10

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Although there is no assertion that IMS Korea used patient identified health information in any of its offerings, prosecutors allege that certain of IMS Korea’s data suppliers should have obtained patient consent when they converted sensitive patient information into non-identified data and that IMS Korea had not taken adequate precautions to reduce the risk of re-identification.

On February 14, 2020, the Seoul Central District Court acquitted IMS Korea and its two employees of the charges of improper handling of sensitive health information.

The matter is now on appeal.

On February 14, 2020, the Seoul Central District Court acquitted IMS Korea and its two employees of the charges of improper handling of sensitive health information, and the Prosecutor's Office appealed.

On December 23, 2021, the appellate court affirmed the judgment of the Seoul Central District Court.

The Prosecutor's Office has appealed to the Supreme Court.

The Company intends to vigorously defend its position on appeal.

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IQVIA Parties seek injunctive relief, appointment of a monitor, the award of compensatory and punitive damages and reimbursement of all litigation expenses, including reasonable attorneys’ fees and costs.

On March 13, 2017, Veeva filed

counterclaims alleging anticompetitive business practices in violation of the Sherman Act and state laws.

On March 13, 2017, Veeva filed counterclaims alleging anticompetitive business practices in violation of the Sherman Act and state laws.

Veeva claims damages in excess of $ 200 million, and is seeking punitive damages and litigation costs, including attorneys’ fees.

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Since the initial filings, the parties have filed additional litigations against each other, primarily concerning the use of IQVIA data with various other Veeva products.

The parties have been engaged in the discovery process in connection with the first lawsuit.

The parties are engaged in the discovery process in connection with these lawsuits.

On May 7, 2021, the Court issued an order and opinion (the “Order”) in which it found significant evidence that Veeva had (1) misappropriated IQVIA data and unlawfully used it to improve Veeva data offerings, (2) engaged in a cover-up by deleting significant evidence of its theft of IQVIA’s trade secrets, and (3) improperly withheld certain evidence in furtherance of a crime and/or fraud against IQVIA.

The Court imposed five sanctions against Veeva, including ordering three separate adverse inference instructions be issued to the jury and that IQVIA be permitted to present evidence to the jury of Veeva’s destruction efforts.

Veeva is currently appealing the Order.

Stockholders’ Equity

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On October 30, 2013, the Board first approved the Repurchase Program, authorizing the repurchase of up to $ 125 million of either the Company’s common stock or vested in-the-money employee stock options, or a combination thereof.

The Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of its common stock by $ 600 million, $ 1.5 billion, $ 2 billion and $ 1.5 billion, $ 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 Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of the Company's common stock by $ 600 million, $ 1.5 billion, $ 2.0 billion, $ 1.5 billion, and $ 2.0 billion, in 2015, 2016, 2017, 2018, and 2019 respectively.

On February 10, 2022 the Board increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of the Company's common stock by an additional $ 2.0 billion, which increased the total amount that has been authorized under the Repurchase Program to $ 9.725 billion.

The Repurchase Program does not obligate the Company to repurchase any particular amount of common stock or vested in-the- money employee stock options, and it may be modified, extended, suspended or discontinued at any time.

As of December 31, 2020, the Company has remaining authorization to repurchase up to $ 0.9 billion of its common stock under the Repurchase Program.

As of December 31, 2021, the Company had remaining authorization to repurchase up to approximately $ 0.5 billion of its common stock under the Repurchase Program.

The February 10, 2022 $ 2.0 billion increase in the stock repurchase authorization, increased the remaining authorization to repurchase common stock under the Repurchase Program up to approximately $ 2.5 billion.

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.

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2020 Offerings

In March 2019, the Company completed an underwritten secondary public offering of 5,000,000 shares of its common stock held by certain of the Company’s remaining private equity sponsors (the “Selling Stockholders”), of which the Company repurchased 1,000,000 shares for an aggregate purchase price of approximately $ 140.8 million.

There were no equity offerings during the year.

2019 Offerings

In March 2019, the Company completed an underwritten secondary public offering of 5 million shares of its common stock held by certain of the Company’s remaining private equity sponsors (the “Selling Stockholders”), of which the Company repurchased 1 million shares for an aggregate purchase price of approximately $ 140.8 million.

The Company did not offer any stock in this transaction and did not receive any proceeds from the sale of the shares by the Selling Stockholders.

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Other Equity Repurchases

On February 13, 2020, the Company agreed to purchase at market price an aggregate of 1,000,000 shares of its common stock, par value $ 0.01 per share, in a private transaction from certain of its existing shareholders (the “February 2020 Repurchase”).

In addition to the February 2020 Repurchase, certain of the Company’s remaining private equity sponsors informed the Company that they have sold 4,000,000 shares of the Company’s common stock pursuant to Rule 144 under the Securities Act of 1933, as amended, for a total of 5,000,000 shares.

In August 2019, the Company agreed to purchase an aggregate of 1,000,000 shares of its common stock, par value $ 0.01 per share, in a private transaction from certain of its existing shareholders (the “Repurchase”).

In addition to the Repurchase, certain of the Company’s remaining private equity sponsors informed the Company that they have sold 4,000,000 shares of the Company’s common stock pursuant to Rule 144 under the Securities Act of 1933, as amended, for a total of 5,000,000 shares.

On February 13, 2020, the Company agreed to purchase at market price an aggregate of 1 million shares of its common stock, par value $ 0.01 per share, in a private transaction from certain of its existing shareholders (the “February 2020 Repurchase”).

In addition to the February 2020 Repurchase, certain of the Company’s remaining private equity sponsors informed the Company that they have sold 4 million shares of the Company’s common stock pursuant to Rule 144 under the Securities Act of 1933, as amended, for a total of 5 million shares.

In August 2019, the Company agreed to purchase an aggregate of 1 million shares of its common stock, par value $ 0.01 per share, in a private transaction from certain of its existing shareholders (the “Repurchase”).

In addition to the Repurchase, certain of the Company’s remaining private equity sponsors informed the Company that they have sold 4 million shares of the Company’s common stock pursuant to Rule 144 under the Securities Act of 1933, as amended, for a total of 5 million shares.

Below is a summary of the share repurchases made both under and outside of the Repurchase Program:

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Non-controlling Interests

The Company contributed businesses to a joint venture with Quest Diagnostics Incorporated (“Quest”) that was recorded at book value (carryover basis) because the Company owns 60 % of the joint venture and maintains control of these businesses.

As a result, Quest’s non- controlling interest in the joint venture, referred to as Q 2 Solutions, is equal to 40 %.

Quest’s non-controlling interest was $ 279 million at December 31, 2020.

During the year ended December 31, 2020, Q 2 Solutions distributed dividends of $ 21 million to Quest and received a $ 8 million contribution from Quest to fund ongoing operational and strategic activities.

On April 1, 2021 the Company acquired the 40 % non-controlling interest in Q 2 Solutions, a fully consolidated subsidiary, from Quest Diagnostics Incorporated ("Quest") for approximately $ 758 million, financed with cash on hand.

The transaction resulted in the Company having 100 % ownership in Q 2 Solutions.

As of December 31, 2021, the Company had no other material non-controlling interests.

Business Combinations

The Company completed several immaterial acquisitions during the year ended December 31, 2020.

The Company’s assessment of fair value and the purchase price allocation related to these acquisitions is preliminary and subject to change upon completion.

The Company completed several individually immaterial acquisitions during the year ended December 31, 2021.

The Company’s assessment of fair value, including the valuation of certain acquired intangibles, and the purchase price allocation related to these acquisitions is preliminary and subject to change upon completion.

Further adjustments may be necessary as additional information related to the fair values of assets acquired and liabilities assumed is assessed during the measurement period (up to one year from the acquisition date).

The accompanying consolidated financial statements include the results of the acquisitions subsequent to their respective closing dates.

Pro forma information is not presented as pro forma results of operations would not be significantly different to the actual results of operations of the Company.

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

(in millions) Amortization Period

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

Amounts recorded in the Consolidated Balance Sheets:

The Company recorded goodwill from these acquisitions, primarily attributable to assembled workforce and expected synergies.

The consolidated financial statements include the results of the acquisitions subsequent to their respective closing dates.

Pro forma information is not presented as pro forma results of operations would not be materially different to the actual results of operations of the Company.

The following table provides certain financial information for these acquisitions:

Year Ended December 31,

(in millions) 2021 2020

Assets acquired:

Cash and cash equivalents $ 40 $ 10

Other assets 75 22

Goodwill 1,060 115

Portion of goodwill deductible for income tax purposes 99 186

Intangible assets:

Other identifiable intangibles 576 101

Liabilities assumed:

Other liabilities ( 62 ) ( 9 )

Deferred income taxes, long-term ( 147 ) ( 5 )

Net assets acquired (1) $ 1,542 $ 234

(1) Total cash paid for acquisitions, net of cash acquired, in the accompanying consolidated statements of cash flows, includes contingent consideration and deferred purchase price of $ 44 million and $ 47 million for the years ended December 31, 2021 and 2020, respectively.

The portion of goodwill deductible for income tax purposes was preliminarily assessed as $ 503 million and $ 99 million for the years ended December 31, 2021 and 2020, respectively.

The following table provides a summary of the estimated fair value of certain intangible assets acquired:

Year Ended December 31,

(in millions) Amortization Period 2021 2020

Other identifiable intangibles:

Customer relationships 10 - 18 years $ 393 $ 90

Backlog 0 years — 11

Non-compete agreements 3 - 5 years 2 2

Software 3 - 3 years 8 35

Software and related assets 3 - 8 years 133 8

Trade names 3 - 15 years 31 1

Total intangible assets $ 101 $ 271

(1) Total cost of acquisitions, net of cash acquired, includes contingent consideration and deferred purchase payments of $ 47 million and $ 79 million for the years ended December 31, 2020 and 2019, respectively.

Backlog 2 years 17 —

Total Other identifiable intangibles $ 576 $ 101

Restructuring

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(in millions) Severance and Related Costs Exit Costs Total

Balance at December 31, 2018 $ 47 $ 27 $ 74

Balance as of December 31, 2019 $ 64 $ 3 $ 67

Expense, net of reversals 52 — 52

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Foreign currency translation and other 2 — 2

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

Balance as of December 31, 2020 $ 51 $ 2 $ 53

Expense, net of reversals 20 — 20

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Foreign currency translation and other ( 1 ) ( 1 ) ( 2 )

Balance at December 31, 2020 $ 51 $ 2 $ 53

Balance as of December 31, 2021 $ 30 $ — $ 30

The reversals were due to changes in estimates primarily resulting from the redeployment of staff and higher than expected voluntary terminations.

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

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

The Company expects the majority of the restructuring accruals as of December 31, 2021 will be paid in 2022.

The components of income before income taxes and equity in earnings (losses) of unconsolidated affiliates are as follows:

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Non-controlling interest — ( 5 ) ( 6 )

Tax Act impact — — ( 35 )

$ 163 $ 72 $ 116

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taxes on foreign earnings.

In 2021, the Company recorded a benefit of $ 29 million related to a 2020 U.S.

Federal tax return position associated with Foreign Derived Intangible Income (“FDII”) and GILTI tax credits.

Also in 2021, the Company recorded a $ 9 million tax expense as a result of the U.S.

Treasury Department issuing final regulations on Foreign Tax Credits.

In 2020, the U.S.

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

The Company has determined it will elect the GILTI high tax exception as allowed by the final regulations and will amend its 2018 and 2019 US Federal consolidated income tax returns resulting in a favorable impact of $ 26 million, which the Company recorded in 2020.

Treasury Department issued final regulations regarding FDII and GILTI.

The Company has determined it will elect the GILTI high tax exception as allowed by the final regulations and has amended its 2018 U.S.

Federal consolidated income tax returns and plans to amend its 2019 U.S.

Federal consolidated income tax returns resulting in a favorable impact of $ 26 million, which the Company recorded in 2020.

In 2019 the U.S.

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The Tax Act is comprehensive legislation that includes provisions that lower the federal corporate income tax rate from 35% to 21% beginning in 2018 and imposes a one-time transition tax on undistributed foreign earnings.

While the final regulations related to the transition tax did not have a material impact on the Company, the proposed guidance for 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 the tax benefit recorded in 2018 by recording a tax expense of $ 25 million for this impact.

In 2018 the Company recorded a $ 35 million benefit related to finalizing the accounting related to the Tax Act.

Additionally, in 2018 the Company recorded a benefit of $ 25 million related to FDII, as well as a tax expense of $ 35 million related to GILTI, as a result of the new provisions of the Tax Act.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $ 4,075 million at December 31, 2020.

The final regulations related to the transition tax did not have a material impact on the Company.

As a result of the proposed FDII guidance, which was subsequently finalized in 2020, the Company reversed the tax benefit originally recorded in 2018 by recording a tax expense of $ 25 million for this impact in 2019.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $ 4,260 million as of December 31, 2021.

With the enactment of the Tax Act, the Company does not consider any of its foreign earnings as indefinitely reinvested.

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Net deferred income tax liabilities $ ( 286 ) $ ( 224 )

During 2020 the net deferred tax liabilities decreased mainly due to foreign exchange revaluations of debt instruments and amortization of intangibles related to the merger between Quintiles and IMS Health.

During 2021 the net deferred tax liabilities increased mainly due to foreign exchange revaluations of debt instruments offset by a decrease in deferred tax liabilities mainly due to amortization of intangibles related to the merger between Quintiles and IMS Health.

The Company had federal, state and local, and foreign tax loss carryforwards and tax credits, the tax effect of which was $ 631 million as of December 31, 2021.

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Some of the federal losses are subject to limitations under the Internal Revenue Code, however, management expects these losses to be utilized during the carryforward periods.

In 2020, the Company increased its valuation allowance by $ 40 million to $ 306 million at December 31, 2020 from $ 266 million at December 31, 2019.

The valuation allowance increased primarily due to current year state tax benefits on foreign exchange revaluations on debt instruments, branch basket foreign tax credits that the Company has determined are not more likely than not to be used before their expiration, and due to an increase in the value of the U.S.

In 2021, the Company decreased its valuation allowance by $ 12 million to $ 294 million as of December 31, 2021 from $ 306 million as of December 31, 2020.

The valuation allowance decreased primarily due to current year state tax expenses on foreign exchange revaluations on debt instruments and in use of U.S.

state net operating losses.

The valuation allowance increased primarily due to branch basket foreign tax credits that the Company has determined are not more likely than not to be used before their expiration.

A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below:

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(in millions) 2021 2020 2019

Balance at January 1 $ 120 $ 94 $ 82

Balance as of January 1, $ 118 $ 120 $ 94

Additions based on tax positions related to the current year 7 5 5

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Reductions due to the lapse of the applicable statute of limitations ( 9 ) ( 7 ) ( 5 )

Balance at December 31, $ 118 $ 120 $ 94

Balance as of December 31, $ 116 $ 118 $ 120

As of December 31, 2021, the Company had total gross unrecognized income tax benefits of $ 116 million associated with over 100 jurisdictions in which the Company conducts business that, if recognized, would reduce the Company’s effective income tax rate.

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India 2006 - 2021

Japan 2019 - 2020

United Kingdom 2019 - 2020

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Amendments — — ( 2 ) ( 1 )

Curtailments — — — ( 5 )

Settlements — — ( 7 ) ( 7 )

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Settlements — — ( 7 ) ( 7 )

Business combinations — — 3 —

Foreign currency fluctuations and other — — ( 6 ) 17

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Accrued expenses $ 3 $ 2 $ 10 $ 15

Other long-term liabilities 47 42 210 171

Other liabilities $ 44 $ 47 $ 187 $ 210

AOCI $ 29 $ ( 21 ) $ ( 24 ) $ ( 65 )

At December 31, 2020, the benefit obligation for other postretirement benefits was $ 1 million, with less than $ 1 million recorded in accrued expenses and $ 1 million included within other long-term liabilities;

and the amount recognized in AOCI was less than $ 1 million.

As of December 31, 2021, the benefit obligation and amount recognized in AOCI for other postretirement benefits were immaterial.

The following table summarizes the accumulated benefit obligation for all pension benefit plans:

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Fair value of plan assets

The components of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive loss were as follows:

$ 5 $ 5 $ 85 $ 386

The components of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive income were as follows:

Pension Benefits

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Other changes in plan assets and benefit obligations recognized in other comprehensive loss:

Actuarial loss (gain) – current years 34 ( 2 ) 22 35 32 ( 15 )

Actuarial (gain) loss – current years ( 50 ) 34 ( 2 ) ( 39 ) 35 32

Prior service cost - current year — — — ( 2 ) — —

Curtailment gain - current year — — — — — 5

Settlement gain - current year — — — — — 1

Amortization of actuarial losses — — — — — ( 1 )

Total recognized in other comprehensive loss (income)

34 ( 2 ) 22 35 37 ( 10 )

Total recognized in net periodic benefit cost and other comprehensive loss (income)

Total recognized in other comprehensive income

( 50 ) 34 ( 2 ) ( 41 ) 35 37

All components of net periodic benefit cost other than service cost are recorded in other expense (income), net on the accompanying consolidated statements of income.

Total recognized in net periodic benefit cost and other comprehensive income $ ( 57 ) $ 29 $ ( 1 ) $ ( 24 ) $ 55 $ 50

All components of net periodic benefit cost other than service cost are recorded in other income, net on the accompanying consolidated statements of income.

Gain (losses) affecting the benefit obligation for the period ending December 31, 2021 was primarily related to the change in discount rate .

On October 26, 2018, the High Court of the United Kingdom issued a judgement relating to Guaranteed Minimum Pensions (“GMPs”) in the Lloyds case.

The judgement concluded the schemes should be amended to equalize pension benefits for men and women in relation to guaranteed minimum pension benefits.

A preliminary assessment by the Company’s actuarial advisors estimated an impact of approximately $ 1.7 million between the two United Kingdom pension schemes, which has been recognized in AOCI as a prior

service cost in 2018.

On November 20, 2020, the High Court ruled that the schemes should revisit individual transfer payments made since May 17, 1990 to review for any additional amount due as a result of the guaranteed minimum pension equalization.

An assessment by the Company’s actuarial advisors determined that the impact of this ruling to be immaterial.

The weighted average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31:

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7.23 % 7.42 % 7.67 % 3.92 % 3.91 % 4.02 %

The weighted average assumptions used to determine benefit obligations were as follows at December 31:

The weighted average assumptions used to determine benefit obligations were as follows as of December 31:

Pension Benefits

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At retirement, the account is converted to a monthly retirement benefit.

At December 31, 2020, the Company’s health care cost trend rate for the next seven years was assumed to be 5.5 % and the assumed ultimate cost trend rate was 4.5 %.

As of December 31, 2021, the Company’s health care cost trend rate for the next seven years was assumed to be 7.0 % and the assumed ultimate cost trend rate was 4.5 %.

The Company assumed that ultimate cost trend rate is reached in 2027 .

Assumed health care cost trend rates could have a significant effect on the amounts reported for the health care plans.

A one-percentage- point change in assumed health care cost trend rates at December 31, 2020 would have a de minimis effect on the total of service and interest cost and on the accumulated postretirement benefit obligation.

The Company’s pension plan weighted average asset allocations, by asset category, were as follows:

Plan Assets at December 31,

United States Plans Non-United States Plans Total

Asset Category 2020 2019 2020 2019 2020 2019

A one-percentage- point change in assumed health care cost trend rates as of December 31, 2021 would have a de minimis effect on the total of service and interest cost and on the accumulated postretirement benefit obligation.

The Company’s pension plan target asset allocations and weighted average asset allocations, by asset category, were as follows:

Plan Assets as of December 31,

Target United States Plans Non-United States Plans Total

Asset Category Allocation 2021 2020 2021 2020 2021 2020

Equity securities 45 - 65 %

71.13 % 71.15 % 41.29 % 42.69 % 56.65 % 56.62 %

Debt securities 10 - 30 %

23.72 23.88 24.36 20.08 24.03 21.94

Real estate 0 - 5 %

5.15 4.97 — — 2.65 2.43

Other 10 - 30 %

— — 34.35 37.23 16.67 19.02

Total 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 %

The target asset allocation for the Company’s pension plans were as follows:

Asset Category

Equity securities 45 - 65 %

Debt securities 10 - 30 %

Real estate 0 - 5 %

Other 10 - 30 %

The following table summarizes United States plan assets measured at fair value:

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Debt issued by national, state or local government 3 118 121 3 93 96

Diversified growth fund — — — — — —

Investments funds — 10 10 — 10 10

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Total $ 7 $ 351 $ 494 $ 6 $ 346 $ 475

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

(1) Certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The fair value amounts presented in the above plan asset tables are intended to permit reconciliation of the fair value of plan assets in the fair value hierarchy to the plan asset amounts presented in the above funded status table as of December 31, 2021 and 2020.

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The Company periodically conducts asset liability modeling studies to ensure that the investment strategy is aligned with the obligations of the plans and that the assets will generate income and capital growth to meet the cost of current and future benefits that the plans provide.

The pension plans do not have investments in Company stock at December 31, 2020 and 2019.

The pension plans do not have investments in Company stock as of December 31, 2021 and 2020.

The portfolio for the Company’s United Kingdom pension plans seek to invest in a range of suitable assets of appropriate liquidity that will generate in the most effective manner possible, income and capital growth to ensure that there are sufficient assets to meet benefit payments when they fall due, while controlling the long-term costs of the plans and avoiding short-term volatility of investment returns.

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The following benefit payments (net of expected participant contributions) for pension benefits are expected to be paid as follows:

(in millions) Pension Benefits

(in millions)

Years 2027 through 2031 283

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Defined Contribution Plans

Defined contribution or profit sharing plans are offered in Australia, Austria, Belgium, Bulgaria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Japan, Malaysia, the Netherlands, New Zealand, Poland, Slovakia, South Africa, Sweden, Switzerland, Taiwan, Thailand, the United States and the United Kingdom.

Defined contribution or profit sharing plans are offered in various countries in which the Company operates.

In some cases, these plans are required by local laws or regulations.

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In 2021, 2020, and 2019, the Company expensed $ 60 million, $ 48 million and $ 56 million, respectively, related to matching contributions.

Certain key executives of the Company participate in an unfunded defined contribution executive retirement plan, assumed in the Merger, which was frozen to additional accruals for future service contributions in 2012.

Certain key executives of the Company participate in an unfunded defined contribution executive retirement plan, assumed in the merger between Quintiles and IMS Health, which was frozen to additional accruals for future service contributions in 2012.

Participants continue to receive an annual investment credit based on the average of the annual yields at the end of each month on the AA-AAA rated 10 plus year maturity component of the Merrill Lynch United States Corporate Bond Master Index.

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The above tables do not include the Company’s expense or obligation associated with providing these benefits.

The obligation related to these benefits was approximately $ 12 million as of December 31, 2020, and the Company’s expense for the year then ended was de minimis.

The obligation related to these benefits as of December 31, 2021, and the Company’s expense for the year then ended, were not material.

Stock Incentive Plans

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The 2017 Plan provides for the grant of stock options, SARs, restricted and deferred stock (including RSUs), performance awards, dividend equivalents, other stock-based awards and cash-based awards.

The fair value of stock options and SARs is estimated using the Black-Scholes-Merton option-pricing model.

The fair value of restricted stock and RSUs is based on the closing market price of the Company’s common stock on the date of grant.

The fair value of the performance shares related to compound annual earnings per share (“EPS”) growth and/or other internal performance measures is equal to the closing market price of the Company’s common stock on the date of grant.

The fair value of performance shares related to relative total shareholder return (“TSR”) is determined based on a Monte Carlo simulation model.

The Company recognized stock-based compensation expense of $ 170 million, $ 95 million and $ 146 million in 2021, 2020, and 2019, respectively.

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The option price is determined by the Board at the date of grant and the options expire 10 years from the date of grant.

The vesting schedule for options granted to employees is either (i) 25 % per year beginning on the first anniversary of the date of grant;

or (ii) 33 % on the third anniversary of the date of grant and 67 % on the fourth anniversary of the date of grant.

All outstanding stock options are fully vested.

The Company’s stock option activity in 2021 is as follows:

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Weighted Average Exercise Price Aggregate Intrinsic Value

Outstanding at December 31, 2019 1,458,341 $ 34.90 $ 174

Outstanding as of December 31, 2020 532,627 $ 48.42 $ 70

Exercised ( 160,966 ) 40.88

Canceled ( 875 ) 64.67

Outstanding at December 31, 2020 532,627 $ 48.42 $ 70

Outstanding as of December 31, 2021 371,661 $ 51.69 $ 86

The total intrinsic value of options exercised was approximately $ 29 million, $ 120 million and $ 124 million in 2021, 2020 and 2019, respectively.

The Company received cash of approximately $ 7 million, $ 25 million and $ 36 million in 2021, 2020, and 2019, respectively, from options exercised.

Selected information regarding the Company’s stock options as of December 31, 2020 is as follows:

Options Outstanding Options Exercisable

Number of Options Exercise Price Range Weighted Average Exercise Price Weighted Average Remaining Life (in Years) Number of Options Weighted Average Exercise Price

135,468 11.46 — 28.39 23.72 1.79 135,468 23.72

111,011 29.17 — 47.87 42.26 2.6 111,011 42.26

86,601 50.79 — 64.52 57.25 3.84 86,601 57.25

113,272 64.67 — 64.67 64.67 5.17 113,272 64.67

86,275 64.86 — 64.93 64.92 4.18 86,275 64.92

The weighted average remaining contractual life of the options outstanding and exercisable as of December 31, 2021 is 2.7 years.

The total aggregate intrinsic value of the exercisable stock options and the stock options expected to vest as of December 31, 2020 was approximately $ 70 million.

The total aggregate intrinsic value of the exercisable stock options as of December 31, 2021 was approximately $ 86 million.

Stock Appreciation Rights – Stock Settled

The exercise price of the stock-settled SARs (“SSRs”) is equal to the closing market price of the Company’s common stock as of the grant date and expire on the tenth anniversary of the date of grant.

The SSRs are eligible to vest either (i) in equal increments of 25 % on each of the first four anniversaries of the date of grant or (ii) in three equal annual installments on each of the first three anniversaries of the date of grant.

The SSRs are eligible to vest in three equal annual installments on each of the first three anniversaries of the date of grant.

The Company’s SSR activity in 2021 is as follows:

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Weighted Average Exercise Price Aggregate Intrinsic Value

Outstanding at December 31, 2019 4,314,872 $ 94.37 $ 260

Outstanding as of December 31, 2020 4,241,342 $ 112.66 $ 282

Granted 494,929 184.96

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Canceled ( 86,183 ) 152.10

Outstanding at December 31, 2020 4,241,342 $ 112.66 $ 282

The total intrinsic value of SSRs exercised was approximately $ 73 million in 2020.

Outstanding as of December 31, 2021 3,954,893 $ 122.54 $ 632

The total intrinsic value of SSRs exercised was approximately $ 81 million, $ 73 million and $ 47 million in 2021, 2020 and 2019, respectively.

The weighted average remaining contractual life of the SSRs outstanding and exercisable as of December 31, 2021 is 6.7 years and 5.8 years, respectively.

The total aggregate intrinsic value of the exercisable SSRs and the SSRs expected to vest as of December 31, 2021 was approximately $ 625 million.

Stock Appreciation Rights – Cash Settled

The Company’s cash settled SARs (“CSRs”) require the Company to settle in cash an amount equal to the difference between the fair value of the Company’s common stock on the date of exercise and the grant price, multiplied by the number of CSRs being exercised.

These awards vest either (i) 25 % per year;

(ii) 33 % on the third anniversary of the date of grant and 67 % on the fourth anniversary of the date of grant;

or (iii) one- third per year beginning on the first anniversary of the date of grant.

The Company’s CSR activity in 2020 is as follows:

(in millions, except number of CSRs and grant price)

Number of CSRs

Weighted Average Grant Price Aggregate Intrinsic Value

Outstanding at December 31, 2019 171,840 $ 62.15 $ 16

Performance Awards

The Company awarded performance awards that contain service, performance-based and/or market-based vesting criteria.

Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the three-year performance period (as defined in the award agreements).

The Company’s performance award activity in 2021 is as follows:

Number of Performance Awards Weighted Average Grant-Date Fair Value

Outstanding as of December 31, 2020 786,165 $ 136.96

Granted 248,019 202.66

Exercised ( 37,884 ) 56.37

Additional goal achievement shares

303,128 104.29

Vested ( 631,215 ) 103.96

Canceled ( 35,937 ) 168.49

Outstanding at December 31, 2020 146,716 $ 73.49 $ 16

As of December 31, 2020, 2019, and 2018, the weighted average fair value per share of the CSRs granted was $ 112.10 , $ 99.27 and $ 66.92 , respectively.

The Company paid approximately $ 4 million, $ 7 million and $ 5 million to settle exercised CSRs in 2020, 2019, and 2018, respectively.

The weighted average remaining contractual life of the CSRs outstanding and exercisable as of December 31, 2020 is 4.6 years and 3.8 years, respectively.

The total aggregate intrinsic value of the exercisable CSRs and the CSRs expected to vest as of December 31, 2020 was approximately $ 15 million.

Outstanding as of December 31, 2021 670,160 $ 175.89

As of December 31, 2021, there are 670,160 performance awards outstanding with an intrinsic value of approximately $ 189 million.

Restricted Stock Units – Stock Settled

The Company’s RSUs will settle in shares of the Company’s common stock within 45 days of the applicable vesting date.

In general, RSUs granted to employees vest either (i) 25 % per year beginning on the first anniversary of the date of grant;

(ii) one-third per year beginning on the first anniversary of the grant date;

(iii) 50 % on the second anniversary of the date of grant and 25 % on the third and fourth anniversary of the date of grant or (iv) 100 % at the end of the three-year period following the grant date.

In general, RSUs granted to employees vest either (i) one-third per year beginning on the first anniversary of the grant date;

(ii) 50 % on the second anniversary of the date of grant and 25 % on the third and fourth anniversary of the date of grant or (iii) 100 % at the end of the three-year period following the grant date.

Members of the Company’s board of directors receive RSUs that are fully vested when granted.

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Number of RSUs Weighted Average Grant-Date

Outstanding at December 31, 2019 420,566 $ 115.90

Outstanding as of December 31, 2020 573,090 $ 143.23

536,199 196.91

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Canceled ( 74,419 ) 170.29

Outstanding at December 31, 2020 573,090 $ 143.23

Outstanding as of December 31, 2021 820,786 $ 179.59

(1) Pursuant to the IQVIA Holdings Inc.

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As of December 31, 2021, there are 820,786 RSUs outstanding with an intrinsic value of approximately $ 232 million.

Stock Appreciation Rights – Cash Settled

These awards vest one- third per year beginning on the first anniversary of the date of grant.

As of December 31, 2021, 2020 and 2019, the weighted average fair value per share of the CSRs granted was $ 216.87 , $ 112.10 and $ 99.27 , respectively.

The Company paid approximately $ 1 million, $ 4 million and $ 7 million to settle exercised CSRs in 2021, 2020, and 2019, respectively.

The weighted average remaining contractual life of the CSRs outstanding and exercisable as of December 31, 2021 is 3.5 years and 3.1 years, respectively.

The total aggregate intrinsic value of the exercisable CSRs and the CSRs expected to vest as of December 31, 2021 was approximately $ 28 million.

Restricted Stock Units – Cash Settled

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These awards vest either (i) 100 % at the end of the three-year period following the date of grant, or (ii) one-third per year beginning on the first grant date anniversary.

The Company’s Cash RSU activity in 2020 is as follows:

Number of Cash RSUs Weighted Average Grant-Date Fair Value

Outstanding at December 31, 2019 20,707 $ 117.71

Granted 10,597 160.97

Vested ( 9,751 ) 107.58

Canceled ( 2,198 ) 147.96

Outstanding at December 31, 2020 19,355 $ 143.06

As of December 31, 2021, there are 12,319 Cash RSUs outstanding with an intrinsic value of approximately $ 3.5 million.

Restricted Stock Awards

Restricted stock awards (“RSAs”) vest either (i) in equal increments of 50 % on each of the second and fourth anniversaries of the grant date;

(ii) one-third per year beginning on the first anniversary of the date of grant;

or (iii) 25 % on each of the second and third anniversaries of the grant date and 50 % on the fourth anniversary of the date of grant.

The Company’s RSA activity in 2020 is as follows:

Number of RSAs Weighted Average Grant-Date Fair Value

Outstanding at December 31, 2019 190,937 $ 78.21

Vested ( 63,645 ) 78.21

Outstanding at December 31, 2020 127,292 $ 78.21

As of December 31, 2020, there are 127,292 RSAs outstanding with an intrinsic value of approximately $ 23 million.

Performance Awards

The Company awarded performance awards that contain service, performance-based and/or market-based vesting criteria.

Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the two-year or three-year performance period (as defined in the award agreements).

The Company’s performance award activity in 2020 is as follows:

Number of Performance Awards Weighted Average Grant-Date Fair Value

Outstanding at December 31, 2019 1,055,807 $ 107.18

Granted 237,012 177.13

Additional goal achievement shares

336,264 85.82

Vested ( 757,285 ) 86.16

Canceled ( 85,633 ) 129.34

Outstanding at December 31, 2020 786,165 $ 136.96

As of December 31, 2020, there are 786,165 performance awards outstanding with an intrinsic value of approximately $ 141 million.

Restricted stock awards (“RSAs”) vest 25 % on each of the second and third anniversaries of the grant date and 50 % on the fourth anniversary of the date of grant.

As of December 31, 2021, there are no RSAs outstanding.

The Company sponsors a supplemental non-qualified deferred compensation plan, covering certain management employees, and maintains other statutory indemnity plans as required by local laws or regulations.

Related Party Transactions

The Company has entered into other transactions with related parties that are not deemed to be material, including investments in and advances to unconsolidated affiliates that are discussed in Note 4.

The Company has entered into transactions with related parties that are not deemed to be material, including investments in unconsolidated affiliates that are discussed in Note 4.

Property, Equipment and Software by Geography

The following table represents the Company’s property, equipment and software, net, by geographic region, which is further broken down to show each country that accounts for 10% or more of the totals:

As of December 31,

(in millions) 2021 2020

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The Company is managed through three 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 science clients.

Technology & Analytics Solutions provides mission critical information, technology solutions and real-world insights and services to the Company’s life science clients.

Research & Development Solutions, which primarily serves biopharmaceutical customers, provides outsourced clinical research and clinical trial related services.

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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 to integration activities and acquisitions.

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.

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Total revenues 13,874 11,359 11,088

Costs of revenue

Costs of revenue, exclusive of depreciation and amortization

Technology & Analytics Solutions 3,278 2,900 2,663

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Year Ended December 31,

(in millions) 2020 2019 2018

(in millions, except per share data) 2021 2020 2019

Net income attributable to IQVIA Holdings Inc.

$ 966 $ 279 191

Basic weighted average common shares outstanding 191.4 191.3 195.1

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Diluted weighted average common shares outstanding 195.0 195.0 199.6

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:

Year Ended December 31,

(in millions) 2020 2019 2018

Shares subject to performance conditions 1.2 1.3 0.8

Shares subject to anti-dilutive stock-based awards 1.2 0.7 0.9

Total shares excluded from diluted earnings per share 2.4 2.0 1.7

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 are probable.

Earnings per share attributable to common stockholders:

Basic $ 5.05 $ 1.46 $ 0.98

Diluted $ 4.95 $ 1.43 $ 0.96

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.

Comprehensive Income

Performance awards are included in diluted earnings per share based on if the performance targets have been met at the end of the reporting period.

For the years ended December 31, 2021, 2020, and 2019 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 was:

0.1 , 2.4 , and 2.0 , million, respectively.

Accumulated Other Comprehensive (Loss) Income

Below is a summary of the components of AOCI:

(in millions) Foreign Currency Translation Derivative Instrument Defined Benefit Plans Income Taxes Total

Balance at December 31, 2017 $ ( 214 ) $ 14 $ 30 $ 219 $ 49

Balance as of December 31, 2018 $ ( 419 ) $ ( 1 ) $ 19 $ 177 $ ( 224 )

Other comprehensive loss before reclassifications ( 11 ) ( 19 ) ( 35 ) ( 21 ) ( 86 )

Reclassification adjustments — ( 1 ) — — ( 1 )

Balance at December 31, 2018 ( 419 ) ( 1 ) 19 177 ( 224 )

Other comprehensive loss before reclassifications ( 11 ) ( 19 ) ( 35 ) ( 21 ) ( 86 )

Balance as of December 31, 2019 ( 430 ) ( 21 ) ( 16 ) 156 ( 311 )

Other comprehensive income (loss) before reclassifications 35 ( 40 ) ( 69 ) 170 96

Reclassification adjustments — 13 — ( 3 ) 10

Balance at December 31, 2019 $ ( 430 ) $ ( 21 ) $ ( 16 ) $ 156 $ ( 311 )

Other comprehensive loss before reclassifications 35 ( 40 ) ( 69 ) 170 96

Balance as of December 31, 2020 ( 395 ) ( 48 ) ( 85 ) 323 ( 205 )

Other comprehensive (loss) income before reclassifications ( 165 ) 11 90 ( 139 ) ( 203 )

Reclassification adjustments — 16 — ( 4 ) 12

Balance at December 31, 2020 $ ( 395 ) $ ( 48 ) $ ( 85 ) $ 323 $ ( 205 )

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

Acquisition of Quest's non-controlling interest ( 10 ) — — — ( 10 )

Balance as of December 31, 2021 $ ( 570 ) $ ( 21 ) $ 5 $ 180 $ ( 406 )

Below is a summary of the effects on net income of amounts reclassified from AOCI into the consolidated statements of income and the affected financial statement line item:

Year Ended December 31,

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Derivative instruments:

Interest rate swaps and caps Interest expense $ 13 $ — $ —

Interest rate swaps Interest expense $ ( 21 ) $ ( 13 ) $ —

Foreign exchange forward contracts Revenues 5 1 ( 5 )

Foreign exchange forward contracts Other expense (income), net 1 ( 6 ) ( 12 )

Foreign exchange forward contracts Other income, net — ( 1 ) 6

Total before income taxes ( 16 ) ( 13 ) 1

Income tax benefit 3 — 1

Total net of income taxes $ 10 $ ( 1 ) $ ( 12 )

Defined benefit plans:

Amortization of actuarial losses See Note 17 $ — $ — $ 1

Income taxes ( 4 ) ( 3 ) —

Total net of income taxes $ ( 12 ) $ ( 10 ) $ 1

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Income taxes paid, net of refunds $ 222 $ 209 $ 215

Quarterly Financial Data (Unaudited)

The following table summarizes the Company’s unaudited quarterly results of operations:

(in millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter

Revenues $ 2,754 $ 2,521 $ 2,786 $ 3,298

Income from operations 193 62 187 289

Net income 91 ( 21 ) 108 130

Net income attributable to non-controlling interests ( 9 ) ( 2 ) ( 7 ) ( 11 )

Net income attributable to IQVIA Holdings Inc.

$ 82 $ ( 23 ) $ 101 $ 119

Basic earnings per share (1)

$ 0.43 $ ( 0.12 ) $ 0.53 $ 0.62

Diluted earnings per share (1)

$ 0.42 $ ( 0.12 ) $ 0.52 $ 0.61

(in millions, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter

Revenues $ 2,684 $ 2,740 $ 2,769 $ 2,895

Income from operations 210 197 204 166

Net income 67 71 69 20

Net income attributable to non-controlling interests ( 9 ) ( 11 ) ( 12 ) ( 4 )

Net income attributable to IQVIA Holdings Inc.

$ 58 $ 60 $ 57 $ 16

Basic earnings per share (1)

$ 0.29 $ 0.31 $ 0.29 $ 0.09

Diluted earnings per share (1)

$ 0.29 $ 0.30 $ 0.29 $ 0.09

(1) The sum of the quarterly per share amounts may not equal per share amounts reported for year-to-date periods.

This is due to changes in the number of weighted average shares outstanding and the effects of rounding for each period.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data