What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-15 compared with 2022-02-16 · 288 added, 291 removed, 1223 unchanged (32% of the section changed)

54 unchanged sentences

Revenue was recognized based on progress on the performance obligation, which was measured by the proportion of actual costs incurred to the total costs expected to complete the contract.

Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other pass through expenses for the Company’s clinical monitors).

Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other reimbursed expenses for the Company’s clinical monitors).

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

The principal considerations for our determination that performing procedures relating to revenue recognition - estimating measure of progress for clinical research services is a critical audit matter are the high degree of auditor judgment, subjectivity, and effort in performing audit procedures and evaluating audit evidence related to the cost estimates made by management, due to significant judgment by management when determining the total expected costs to complete its contracts, specifically the estimation of direct labor and third-party costs.

The principal considerations for our determination that performing procedures relating to revenue recognition - estimating measure of progress for clinical research services is a critical audit matter are the high degree of auditor effort in performing audit procedures and evaluating audit evidence related to the cost estimates made by management, due to the judgments by management when determining the total expected costs to complete its contracts, specifically the estimation of direct labor and third-party costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the estimation of the total cost to complete clinical research service contracts.

These procedures also included, among others, testing management’s process for determining the estimate of total costs to complete its contracts, which included evaluating the reasonableness of significant assumptions made by management including direct labor and third party-costs, evaluating the appropriateness of changes to management’s estimate of total costs to complete throughout the duration of the contract, testing actual direct costs incurred, and evaluating management’s ability to reasonably estimate the total expected costs to complete contracts, which included performing a comparison of management’s prior period cost estimates to final actual costs.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the estimation of the total costs to complete clinical research service contracts.

These procedures also included, among others, testing management’s process for determining the estimate of total costs to complete its contracts, which included evaluating the reasonableness of significant assumptions made by management including direct labor and third-party costs, evaluating the appropriateness of changes to management’s estimate of total costs to complete throughout the duration of contracts, testing actual direct costs incurred, and evaluating management’s ability to reasonably estimate the total expected costs to complete contracts, which included performing a comparison of management’s prior period cost estimates to final actual costs.

/s/ PricewaterhouseCoopers LLP

8 unchanged sentences

Revenues $ 14,410 $ 13,874 $ 11,359

Costs of revenue, exclusive of depreciation and amortization 9,233 7,500 7,300

Cost of revenues, exclusive of depreciation and amortization 9,382 9,233 7,500

Selling, general and administrative expenses 2,071 1,964 1,789

5 unchanged sentences

Loss on extinguishment of debt — 26 13

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

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

Other expense (income), net 33 ( 130 ) ( 65 )

Income before income taxes and equity in (losses) earnings of unconsolidated affiliates 1,363 1,128 373

Income tax expense 260 163 72

Income before equity in earnings (losses) of unconsolidated affiliates 965 301 236

Equity in earnings (losses) of unconsolidated affiliates 6 7 ( 9 )

Income before equity in (losses) earnings of unconsolidated affiliates 1,103 965 301

Equity in (losses) earnings of unconsolidated affiliates ( 12 ) 6 7

Net income 1,091 971 308

17 unchanged sentences

Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $ 13 , $ 2 and $( 10 )

9 ( 30 ) ( 15 )

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

Defined benefit plan adjustments, net of income tax (benefit) expense of $( 3 ), $ 21 and $( 15 )

( 10 ) 69 ( 54 )

2 unchanged sentences

Reclassification adjustments:

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

Reclassifications on derivative instruments included in net income, net of income tax benefit of $ 2 , $ 4 and $ 3

Comprehensive income 770 780 417

7 unchanged sentences

(in millions, except per share data) 2022 2021

Current assets:

Cash and cash equivalents $ 1,216 $ 1,366

12 unchanged sentences

Deferred income taxes 118 124

Deposits and other assets 491 386

Deposits and other assets, net 472 491

Total assets $ 25,337 $ 24,689

21 unchanged sentences

Accumulated other comprehensive loss ( 727 ) ( 406 )

Equity attributable to IQVIA Holdings Inc.’s stockholders 6,042 6,001

Non-controlling interests — 279

Total stockholders’ equity 5,765 6,042

12 unchanged sentences

Stock-based compensation 194 170 95

Loss on disposals of property and equipment, net — — 1

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

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

Gain on disposals of property and equipment, net ( 10 ) — —

Losses (earnings) from unconsolidated affiliates 12 ( 6 ) ( 7 )

Loss (gain) on investments, net 27 ( 16 ) ( 25 )

Benefit from deferred income taxes ( 115 ) ( 138 ) ( 176 )

17 unchanged sentences

Payment of debt issuance costs ( 5 ) ( 40 ) ( 33 )

Repayment of debt ( 2,091 ) ( 864 ) ( 899 )

Repayment of debt and principal payments on finance leases ( 634 ) ( 2,091 ) ( 864 )

Proceeds from revolving credit facility 2,350 810 1,250

Repayment of revolving credit facility ( 2,025 ) ( 600 ) ( 1,635 )

(Payments) proceeds related to employee stock option plans ( 59 ) ( 44 ) 11

Payments related to employee stock option plans ( 71 ) ( 59 ) ( 44 )

Repurchase of common stock ( 1,168 ) ( 406 ) ( 447 )

26 unchanged sentences

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

Distributions to non-controlling interest, 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

5 unchanged sentences

Stock-based compensation — — — 192 — — — — 192

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

Net income — — — — 1,091 — — — 1,091

27 unchanged sentences

Foreign Currencies

The Company’s financial statements are reported in United States dollars and, accordingly, the Company’s results of operations are impacted by fluctuations in exchange rates that affect the translation of its revenues and expenses denominated in foreign currencies into United States dollars for purposes of reporting its consolidated financial results.

The Company’s consolidated financial statements are reported in United States dollars and, accordingly, the Company’s results of operations are impacted by fluctuations in exchange rates that affect the translation of its revenues and expenses denominated in foreign currencies into United States dollars for purposes of reporting its consolidated financial results.

Assets and liabilities recorded in foreign currencies on the books of foreign subsidiaries are translated at the exchange rate on the balance sheet date.

2 unchanged sentences

The Company is subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of a transaction.

The Company earns revenue from its service contracts over a period of several months and, in some cases, over a period of several years.

The Company earns revenues from its service contracts over a period of several months and, in some cases, over a period of several years.

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 income, net.

Cash Equivalents

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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 does not enter into derivative instruments for investment or speculative purposes.

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.

3 unchanged sentences

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, and 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 interests 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.

The recoverability of the goodwill and indefinite-lived intangible assets are evaluated annually for impairment, or if and when events or circumstances indicate a possible impairment.

The Company reviews the carrying values of other identifiable intangible assets if the facts and circumstances indicate a possible impairment.

The Company reviews the carrying values of other identifiable definite-lived intangible assets if the facts and circumstances indicate a possible impairment.

Long-Lived Assets

1 unchanged sentence

Buildings and leasehold improvements 3 - 40 years

Furniture and fixtures

Transportation equipment

Equipment 3 - 10 years

Furniture and fixtures 5 - 10 years

Transportation equipment 3 - 20 years

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

Contract backlog and client relationships

Software and related assets

Non-compete agreements and other

Client relationships and backlog 1 - 25 years

Software and related assets 1 - 10 years

Trademarks, trade names and other 1 - 17 years

Databases 1 - 9 years

Non-compete agreements 2 - 5 years

Included in software and related assets is the capitalized cost of internal-use software used in supporting the Company’s business.

1 unchanged sentence

Costs are capitalized from completion of the preliminary project stage and when it is considered probable that the software will be used to perform its intended function, up until the time the software is placed into service.

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 Company recognized $ 419 million, $ 211 million and $ 267 million of amortization expense for the years ended December 31, 2022, 2021 and 2020, respectively, related to software and related assets.

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.

There were no impairments recognized in 2021, 2020 and 2019.

There were no impairments recognized in the years ended December 31, 2022, 2021 and 2020.

Revenue Recognition

The Company’s arrangements are primarily service contracts that range in duration from a few months to several years.

The Company recognizes revenue when control of these services is transferred to the customer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services.

The Company recognizes revenues when control of these services is transferred to the customer for an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods or services.

The Company determines revenue recognition utilizing the following five steps:

(1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation.

Cash payments made to customers as incentives to induce customers to enter into service agreements with the Company are amortized as a reduction of revenue over the period the services are performed.

The Company records revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenue generating transactions.

(1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenues when, or as, the Company transfers control of the product or service for each performance obligation.

Cash payments made to customers as incentives to induce customers to enter into service agreements with the Company are amortized as a reduction of revenues over the period the services are performed.

The Company records revenues net of any tax assessments by governmental authorities, such as value added taxes, that are imposed on and concurrent with specific revenues generating transactions.

The Company derives the majority of its revenues in the Technology & Analytics Solutions segment from various information and technology service offerings.

Information offerings (primarily under fixed-price contracts) typically include multiple performance obligations including an ongoing subscription-based deliverable for which revenue is recognized ratably as earned over the contract period, and/or a one-time deliverable of data offerings for which revenue is recognized upon delivery.

Information offerings (primarily under fixed-price contracts) typically include multiple performance obligations including an ongoing subscription-based deliverable for which revenues are recognized ratably as earned over the contract period, and/or a one-time deliverable of data offerings for which revenues are recognized upon delivery.

The customer is able to benefit from the provision of data as it is received.

11 unchanged sentences

The performance obligation is satisfied over time as the output is captured in data and documentation that is available for the customer to consume over the course of the arrangement and furthers progress of the clinical trial.

The Company recognizes revenue over time using a cost-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation.

The Company recognizes revenues over time using a cost-based input method since there is no single output measure that would fairly depict the transfer of control over the life of the performance obligation.

Progress on the performance obligation is measured by the proportion of actual costs incurred to the total costs expected to complete the contract.

Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other pass through expenses for the Company’s clinical monitors).

Costs included in the measure of progress include direct labor and third-party costs (such as payments to investigators and other reimbursed expenses for the Company’s clinical monitors).

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

3 unchanged sentences

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 salesforce 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 revenues 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.

The Company utilizes a single measure of progress for each performance obligation to recognize revenue, which includes deployment of sales representatives based on employee days worked;

The Company utilizes a single measure of progress for each performance obligation to recognize revenues, which includes deployment of sales representatives based on employee days worked;

recruiting based on candidates recruited;

5 unchanged sentences

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.

Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenues 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 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

The Company includes reimbursed expenses in revenues and costs of revenue as the Company is primarily responsible for fulfilling the promise to provide the specified service, including the integration of the related services into a combined output to the customer, which are inseparable from the integrated service.

The Company includes reimbursed expenses in revenues and cost of revenues as the Company is primarily responsible for fulfilling the promise to provide the specified service, including the integration of the related services into a combined output to the customer, which are inseparable from the integrated service.

These costs include such items as payments to investigators and travel expenses for the Company’s clinical monitors and sales representatives, over which the Company has discretion in establishing prices.

4 unchanged sentences

Generally, services from change orders are not distinct from the original performance obligation.

As a result, the effect that the contract modification has on the contract revenue, and measure of progress, is recognized as an adjustment to revenue when it occurs.

Costs of Revenue

Costs of revenue include (i) compensation and benefits for billable employees and personnel involved in production, data management and delivery, and the costs of acquiring and processing data for the Company’s information offerings;

As a result, the effect that the contract modification has on the contract revenues, and measure of progress, is recognized as an adjustment to revenues when it occurs.

Cost of Revenues

Cost of revenues include (i) compensation and benefits for billable employees and personnel involved in production, data management and delivery, and the costs of acquiring and processing data for the Company’s information offerings;

(ii) costs of staff directly involved with delivering technology-related services offerings and engagements, and the costs of data purchased specifically for technology services engagements;

7 unchanged sentences

Neither the Company nor its customers view such upfront payments and contracted payment schedules as a means of financing.

Unbilled services primarily arise from long-term contracts when a cost-based or hours-based input method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer.

Unearned income consists of advance payments and billings in excess of revenue recognized.

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 our consolidated balance sheet as the Company expects to recognize the associated revenue in less than one year.

Unbilled services primarily arise from long-term contracts when a cost-based or hours-based input method of revenue recognition is utilized and revenues recognized exceeds the amount billed to the customer.

Unearned income consists of advance payments and billings in excess of revenues recognized.

As the contracted services are subsequently performed and the associated revenues are 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 our consolidated balance sheet as the Company expects to recognize the associated revenues in less than one year.

Restructuring Costs

8 unchanged sentences

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.

See Note 12 for additional information.

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

5 unchanged sentences

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.

12 unchanged sentences

The Company accounts for stock-based compensation for stock options and stock appreciation rights under the fair value method and uses the Black-Scholes-Merton model to estimate the value of such stock-based awards granted to its employees and non-executive directors.

Expected volatility is based upon the historical volatility of a peer group for a period equal to the expected term, as the Company does not have adequate history to calculate its own volatility and believes the expected volatility will approximate the historical volatility of the peer group.

Expected volatility is based on an analysis that incorporates the historical volatility of the Company's stock since the Merger in October 2016 and reported data for selected reasonably similar publicly traded companies for which the historical information is available.

The Company did not have adequate history to calculate its own volatility for the expected term of all awards granted during the year.

Additionally, the Company believes expected volatility will approximate a blend of the historical volatility of the Company and the selected reasonably similar publicly traded companies.

The Company does not currently anticipate paying dividends.

2 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 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 accounts for its stock-based compensation for performance awards related to compound annual earnings per share (“EPS”) growth 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.

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

Finance leases are included in deposits and other assets, net, 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.

2 unchanged sentences

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.

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

Finance lease expense is recognized as a combination of depreciation expense for the leased asset and interest expense for the outstanding lease liabilities using the discount rate discussed above.

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

2 unchanged sentences

The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share.

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

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

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

3 unchanged sentences

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

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.

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Accounting pronouncements recently adopted

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 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 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.

In October 2021, the Financial Accounting Standards Board ("FASB") issued new accounting guidance, Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , 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 previous GAAP, an acquirer generally recognized 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 Company adopted this new accounting guidance on January 1, 2022.

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

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

Accounting pronouncements issued but not adopted as of December 31, 2022

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.

In September 2022, the FASB issued new accounting guidance, ASU 2022-04, Liabilities - Supplier Finance Programs , to enhance the transparency of supplier finance programs.

The amendments in this ASU address investor and other financial statement user requests for additional information about the use of supplier finance programs by the buyer party to understand the effect of those programs on an entity's working capital, liquidity, and cash flows.

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

The Company is assessing the impacts of this ASU on its disclosures within the consolidated financial statements.

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

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December 31, 2022

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

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

(in millions) Technology & Analytics Solutions Research &

Development Solutions Contract Sales & Medical Solutions Total

Americas $ 2,947 $ 3,747 $ 354 $ 7,048

Europe and Africa 2,175 2,016 175 4,366

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Total revenues $ 5,746 $ 7,921 $ 743 $ 14,410

$ 5,534 $ 7,556 $ 784 $ 13,874

December 31, 2021

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

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

(in millions) Technology & Analytics Solutions Research &

Development Solutions Contract Sales & Medical Solutions Total

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

Europe and Africa 2,282 1,899 176 4,357

1 unchanged sentence

Total revenues $ 5,534 $ 7,556 $ 784 $ 13,874

$ 4,858 $ 5,760 $ 741 $ 11,359

December 31, 2020

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

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

(in millions) Technology & Analytics Solutions Research &

Development Solutions Contract Sales & Medical Solutions Total

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

Europe and Africa 1,844 1,667 184 3,695

1 unchanged sentence

Total revenues $ 4,858 $ 5,760 $ 741 $ 11,359

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

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.

When attributing revenues to individual countries based upon where the services are performed, no individual country, except for the United States, accounted for 10% or more of total revenues for the year ended December 31, 2022.

For the year ended December 31, 2022, revenues in the United States accounted for approximately 42 % of total revenues using this revenue attribution approach.

When applying the same revenue attribution approach for the years ended December 31, 2021 and 2020, no individual country, except for the United States and the United Kingdom, accounted for 10% or more of total revenues for the years then ended.

For the year ended December 31, 2021, revenues in the United States and the United Kingdom accounted for approximately 42 % and 11 % of total revenues, respectively and for the year ended December 31, 2020, revenues in the United States and the United Kingdom accounted for approximately 42 % and 10 % of total revenues, respectively.

No individual customer represented 10% or more of total revenues for the years ended December 31, 2022, 2021 and 2020.

Transaction Price Allocated to the Remaining Performance Obligations

As of December 31, 2021, approximately $ 27.2 billion of revenue is expected to be recognized in the future from remaining performance obligations.

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

As of December 31, 2022, approximately $ 29.2 billion of revenues are expected to be recognized in the future from remaining performance obligations.

The Company expects to recognize revenues on approximately 30 % of these remaining performance obligations over the next twelve months , on approximately 80% over the next five years, with the balance recognized thereafter.

Most of the Company's remaining performance obligations where revenues are expected to be recognized beyond the next twelve months are for service contracts for clinical research in our Research & Development Solutions segment.

The customer contract transaction price allocated to the remaining performance obligations differs from backlog in that it does not include wholly unperformed contracts under which the customer has a unilateral right to cancel the arrangement.

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(in millions) 2022 2021

Billed $ 1,275 $ 1,181

Trade accounts receivable $ 1,329 $ 1,275

Unbilled services 1,624 1,309

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Trade accounts receivable and unbilled services, net $ 2,917 $ 2,551

Unbilled services and unearned income was as follows:

Unbilled services and unearned income were as follows:

(in millions) 2022 2021 Change

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Net balance $ ( 173 ) $ ( 516 ) $ 343

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.

Unbilled services, which is comprised of approximately 61 % and 62 % of unbilled receivables and 39 % and 38 % of contract assets as of December 31, 2022 and December 31, 2021, respectively, increased by $ 315 million as compared to December 31, 2021.

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.

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.

Unearned income decreased by $ 28 million over the same period resulting in an increase of $ 343 million in the net balance of unbilled services and unearned income between December 31, 2022 and 2021.

The change in the net balance is driven by the difference in timing of revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers, primarily 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.

The majority of the unearned income balance as of the beginning of the year was recognized in revenues during the year ended December 31, 2022.

Bad debt expense recognized on the Company’s receivables and unbilled services was immaterial for the years ended December 31, 2022, 2021 and 2020.

Accounts Receivable Factoring Arrangements

The Company has accounts receivable factoring agreements to sell certain eligible unsecured trade accounts receivable, either based on automatic arrangements or at its option, without recourse, to unrelated third-party financial institutions for cash.

For the year ended December 31, 2022, through its accounts receivable factoring arrangements that the Company utilizes most frequently, the Company factored approximately $ 608 million of trade accounts receivable on a non-recourse basis and received approximately $ 600 million in cash proceeds from the sales.

For the year ended December 31, 2021, through these same accounts receivable factoring arrangements, the Company factored approximately $ 363 million of trade accounts receivable on a non-recourse basis and received approximately $ 361 million in cash proceeds from the sales.

The fees associated with these transactions were immaterial.

The Company has other accounts receivable arrangements for which the activity associated with them is immaterial.

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 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 expense (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.

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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) 2022 2021

NovaQuest Pharma Opportunities Fund III, L.P.

(“NQ Fund III”) $ 7 $ 7

NovaQuest Pharma Opportunities Fund IV, L.P.

(“NQ Fund IV”) 12 8

NovaQuest Pharma Opportunities Fund V, L.P.

(“NQ Fund V”) $ 29 $ 22

NovaQuest Private Equity Fund I, L.P.

(“NQ PE Fund I”) 7 3

NostraData Pty Ltd.

(“NostraData”) 18 18

Inteliquet (“Inteliquet”) — 16

Helparound ("Helparound") 3 3

NovaQuest Pharma Opportunities Fund IV, L.P.

(“NQ Fund IV”) 8 12

NovaQuest Private Equity Fund I, L.P.

(“NQ PE Fund I”) 8 7

Longwood Fund V, L.P.

("Longwood") 6 3

Helparound ("Helparound") 2 3

NovaQuest Pharma Opportunities Fund III, L.P.

(“NQ Fund III”) 1 7

Variable Interest Entities

As of December 31, 2022, the Company’s investments in unconsolidated variable interest entities (“VIEs”) and its estimated maximum exposure to loss were as follows:

(in millions) Investments in Unconsolidated VIEs

Maximum Exposure to Loss

(in millions) Investments in

Unconsolidated

NQ Fund V $ 29 $ 45

Longwood 6 10

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 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, 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, 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 other liabilities on the accompanying consolidated balance sheets as of December 31, 2021 and 2020.

NQ PE Fund I 8 9

NQ Fund IV 8 9

NQ Fund III 1 6

Interest Rate Risk Management

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

The Company does not enter into interest rate swap agreements for investment or speculative purposes.

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 (see Note 10 for additional information).

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The Company pays a fixed rate of 0.54 % and receives a variable rate of interest equal to the three-month LIBOR on the swap.

On January 3, 2023, the Company entered into three interest rate swaps with a combined notional value of $ 1 billion in an effort to limit its exposure to changes in the variable interest rate on its Senior Secure Credit Facilities (see Note 10 for additional information).

Interest on the swaps began accruing on December 30, 2022 and the swaps expire on December 31, 2025.

The Company pays a fixed rate of 4.10 % and receives a variable rate of interest equal to one-month Term SOFR on the swaps.

The critical terms of the swaps are substantially the same as the underlying borrowings.

These interest rate swaps are accounted for as cash flow hedges as these transactions were executed to hedge the Company's interest payments and for accounting purposes are considered highly effective.

As such, the effective portion of the hedges is recorded as unrealized gains (losses) on derivatives included in AOCI.

As such, changes in the fair value of the hedges are recorded as unrealized gains (losses) on derivatives included in AOCI.

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

Including the swaps entered into on January 3, 2023, these interest rate swaps result in a total debt mix of approximately 66 % fixed rate debt and 34 % variable rate debt.

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 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 2022 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 2023.

As of December 31, 2022 and 2021, the Company had open Service Contract Hedging contracts to hedge certain forecasted foreign currency cash flow transactions occurring in 2023 and 2022 with notional amounts totaling $ 122 million and $ 110 million, respectively.

For accounting purposes these hedges are considered highly effective.

As of December 31, 2022 and 2021, the Company had recorded gross unrealized gains (losses) of $ 2 million and $( 2 ) million, and $ — million and $( 3 ) million, respectively, related to these contracts.

Upon expiration of the hedge instruments in 2022, 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 other liabilities on the accompanying consolidated balance sheets as of December 31, 2022 and 2021.

Net Investment Risk Management

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December 31, 2022 December 31, 2021

(in millions) Balance Sheet Classification Assets Liabilities Notional Assets Liabilities Notional

(in millions) Balance Sheet

Classification Assets Liabilities Notional Assets Liabilities Notional

Derivatives designated as hedging instruments:

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

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

Derivatives not designated as hedging instruments:

Interest rate swaps Other liabilities — — — — 1 356

Interest rate swaps Other current assets, other assets and other current liabilities $ 42 $ — $ 1,800 $ 4 $ 24 $ 1,800

Foreign exchange forward contracts Other current assets and other current liabilities 2 2 122 — 3 110

Total derivatives $ 44 $ 2 $ 4 $ 27

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

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

Year Ended December 31,

(in millions) 2022 2021 2020

Foreign exchange forward contracts $ ( 8 ) $ 1 $ 2

Interest rate derivatives $ 62 $ 35 $ ( 28 )

Foreign exchange forward contracts 3 ( 8 ) 1

Total $ 65 $ 27 $ ( 27 )

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.

The Company expects approximately $ 21 million of pre-tax unrealized gains related to its foreign exchange contracts and interest rate derivatives included in AOCI as of December 31, 2022 to be reclassified into earnings within the next twelve months.

The total amount of the cash flow hedge effect on the income statement is immaterial for the year ended December 31, 2022.

Fair Value Measurements

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Marketable securities $ 122 $ — $ — $ 122

$ 145 $ — $ — $ 145

Derivatives — 44 — 44

$ 145 $ 4 $ — $ 149

$ — $ 27 $ — $ 27

Total $ 122 $ 44 $ — $ 166

Derivatives $ — $ 2 $ — $ 2

Contingent consideration — — 173 173

$ — $ 27 $ 76 $ 103

Total $ — $ 2 $ 173 $ 175

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:

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Marketable securities $ 145 $ — $ — $ 145

$ 122 $ — $ — $ 122

Derivatives — 4 — 4

$ 122 $ 5 $ — $ 127

$ — $ 56 $ — $ 56

Total $ 145 $ 4 $ — $ 149

Derivatives $ — $ 27 $ — $ 27

Contingent consideration — — 76 76

$ — $ 56 $ 119 $ 175

Total $ — $ 27 $ 76 $ 103

Below is a summary of the valuation techniques used in determining fair value:

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Contingent consideration —The Company values contingent consideration related to business combinations using a weighted probability calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows.

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.

Assumptions used to estimate the fair value of contingent consideration include various financial metrics (revenues 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, 2022 the Company has accrued approximately 75 % of the maximum contingent consideration payments that could potentially become payable.

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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 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.

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

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

Non-recurring Fair Value Measurements

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, 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.

As of December 31, 2022, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaled approximately $ 18,874 million and were identified as Level 3.

These assets are comprised of cost and equity method investments of $ 130 million, goodwill of $ 13,301 million and other identifiable intangibles, net of $ 4,943 million.

These assets are comprised of cost and equity method investments of $ 133 million, goodwill of $ 13,921 million and other identifiable intangible assets, net of $ 4,820 million.

Cost and Equity Method Investments —The inputs available for valuing investments in non-public portfolio companies are generally not easily observable.

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See Note 8 for additional information.

Definite-lived Intangible Assets —If a triggering event occurs, the Company determines the estimated fair value of definite-lived intangible assets by determining the present value of the expected cash flows.

Other Identifiable Intangible Assets, Net —If a triggering event occurs, the Company determines the estimated fair value of definite-lived intangible assets by determining the present value of the expected cash flows.

See Note 8 for additional information.

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Equipment 852 745

Furniture and fixtures 72 76

Transportation equipment 83 69

Furniture and fixtures 74 72

Property and equipment, gross 1,372 1,262

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Depreciation expense $ 160 $ 147 $ 134

$ 147 $ 134 $ 128

Goodwill and Other Identifiable Intangible Assets

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Estimated amortization expense for existing other identifiable intangible assets is expected to be approximately $ 852 million, $ 757 million, $ 650 million, $ 523 million and $ 389 million for the years ending December 31, 2023, 2024, 2025, 2026 and 2027, 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.

Estimated amortization expense can be affected by various factors such as future acquisitions, divestitures, abandonments or impairments.

The following is a summary of other identifiable intangible assets:

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Amortization Net

Definite-lived other identifiable intangible assets:

Definite-lived identifiable intangible assets:

Client relationships and backlog $ 5,339 $ ( 2,332 ) $ 3,007 $ 5,193 $ ( 2,024 ) $ 3,169

Trademarks, trade name and other 550 ( 241 ) 309 544 ( 212 ) 332

Databases 1,889 ( 1,853 ) 36 1,930 ( 1,629 ) 301

Software and related assets 3,106 ( 1,591 ) 1,515 2,637 ( 1,213 ) 1,424

Trademarks, trade names and other 545 ( 278 ) 267 550 ( 241 ) 309

Databases 1,817 ( 1,794 ) 23 1,889 ( 1,853 ) 36

Non-compete agreements 23 ( 15 ) 8 17 ( 12 ) 5

$ 10,830 $ ( 6,010 ) $ 4,820 $ 10,286 $ ( 5,343 ) $ 4,943

Indefinite-lived other identifiable intangible assets:

Trade name $ — $ — $ — $ 18 $ — $ 18

The following is a summary of goodwill by segment for the years ended December 31, 2021 and 2020:

(in millions)

Technology & Analytics Solutions Research & Development Solutions

Contract Sales & Medical Solutions

The following is a summary of goodwill by reportable segment for the years ended December 31, 2022 and 2021:

(in millions) Technology & Analytics Solutions Research &

Solutions Contract Sales & Medical Solutions Consolidated

Balance as of December 31, 2020 $ 10,864 $ 1,646 $ 144 $ 12,654

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Impact of foreign currency fluctuations and other ( 401 ) ( 4 ) ( 8 ) ( 413 )

404 ( 29 ) 5 380

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

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Impact of foreign currency fluctuations and other ( 371 ) ( 27 ) ( 8 ) ( 406 )

( 401 ) ( 4 ) ( 8 ) ( 413 )

Balance as of December 31, 2022 $ 11,520 $ 2,247 $ 154 $ 13,921

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(in millions) 2022 2021

Compensation, including bonuses, fringe benefits and payroll taxes $ 946 $ 852

Restructuring 30 53

Interest 56 55

Client contract related $ 1,065 $ 884

Compensation, including bonuses, fringe benefits and payroll taxes 980 946

Professional fees 99 102

Contingent consideration and deferred purchase price 90 31

Interest 43 56

Restructuring 26 30

Other 368 311

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Term A Loan due 2026—U.S.

Term A Loan due 2023—U.S.

Term A Loan due 2026—U.S.

Dollar LIBOR at average floating rates of 5.98 %

Term A Loan due 2023—Euro — 400

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

Term A Loan due 2026—Euribor at average floating rates of 3.45 %

Term A Loan due 2027—U.S.

Dollar SOFR at average floating rates of 5.67 %

Term B Loan due 2024—U.S.

Dollar LIBOR at average floating rates of — %

Term B Loan due 2024—Euro LIBOR at average floating rates of 2.00 %

Term B Loan due 2024—Euribor at average floating rates of 4.20 %

Term B Loan due 2025—U.S.

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Dollar LIBOR at average floating rates of 6.48 %

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

Term B Loan due 2025—Euribor at average floating rates of 4.20 %

5.0 % Senior Notes due 2027—U.S.

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2.250 % Senior Notes due 2029—Euro denominated

Receivables financing facility due 2024—U.S.

Dollar LIBOR — 240

Receivables financing facility due 2024—U.S.

Dollar LIBOR at average floating rates of 5.27 %

Revolving Loan Commitment 110 110

Term Loan 440 440

Principal amount of debt 12,797 12,185

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2022 Financing Transactions

On June 16, 2022, the Company entered into Amendment No.

1 to the Company’s Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) to borrow $ 1,250 million in additional U.S.

Dollar denominated term A loans due 2027(the “Additional Term A Loans”).

The Additional Term A Loans bear interest based at the Secured Overnight Financing Rate term rates (“Term SOFR”), plus a credit spread adjustment of 0.10 % plus a margin ranging from 1.125 % to 2.00 %, with a Term SOFR floor of 0.00 % per annum.

The proceeds from the Additional Term A Loans were used to repay approximately $ 950 million of outstanding revolving credit loans under the Company’s Credit Agreement and for general corporate purposes.

On October 13, 2022, the Company elected to prepay $ 510 million, the entire outstanding balance, of its U.S.

Dollar Term B Loan due 2024.

As of December 31, 2022, the Company’s Credit Agreement provided financing through several senior secured credit facilities of up to approximately $ 7,637 million, which consisted of $ 6,562 million principal amounts of debt outstanding (as detailed in the table above), and $ 1,070 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.

2021 Financing Transactions

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

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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.

2022 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 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 Prior Credit Agreement to amend certain terms of the TLA-2 Loans.

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

Dollar LIBOR plus a margin ranging from 1.500 % to 2.250 %, with a U.S.

Dollar LIBOR floor of 1.000 % per annum.

The proceeds from the TLA-2 Loans were used to repay outstanding revolving credit loans under the Company's senior secured credit facilities.

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

2021 Financing Transactions

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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 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.

Receivables Financing Facility

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

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

As of December 31, 2022, approximately $ 1.4 billion of the Company's trade accounts receivable and unbilled services were pledged as collateral to secure 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 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 debt agreements provide for certain covenants and events of default customary for similar instruments, including a covenant not to exceed a specified ratio of consolidated senior secured net indebtedness to Consolidated EBITDA, as defined in the senior secured credit facility agreement and a covenant to maintain a specified minimum interest coverage ratio.

If an event of default occurs under any of the Company’s or the Company’s subsidiaries’ financing arrangements, the creditors under such financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under the revolving credit facility and term loans, other actions permitted to be taken by a secured creditor.

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

As of December 31, 2022, 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.

The Company has operating leases for corporate offices, data centers, 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 offices and lab spaces that expire at various dates through 2048.

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

Operating cash flows from operating leases $ 175 $ 211 $ 195

Operating cash flows for operating leases $ 173 $ 175 $ 211

Operating cash flows for finance leases $ 5 $ — $ —

Financing cash flows for finance leases $ 4 $ — $ —

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

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Finance leases

21.28 years 24.00 years —

21.64 years 21.28 years 24.00 years

Weighted Average Discount Rate:

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Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows:

(in millions) Operating Leases Finance Leases

(in millions) Operating Leases Finance

2023 $ 123 $ 11

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Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available.

For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded reserves in the consolidated financial statements based on its best estimates of such loss.

For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded an accrual in the consolidated financial statements based on its best estimates of such loss.

In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any.

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As additional information becomes available, the Company adjusts its assessments and estimates of such liabilities accordingly.

The Company routinely enters into agreements with third parties, including our clients and suppliers, all in the normal course of business.

The Company routinely enters into agreements with third parties, including its clients and suppliers, all in the normal course of business.

In these agreements, the Company sometimes agrees to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims.

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Veeva is currently appealing the Order.

In 2016, IQVIA acquired Dimensions Healthcare LLC (“Dimensions”), a company operating in the Middle East that was engaged in a joint venture with MedImpact International LLC (“MedImpact International”).

The joint venture was terminated in late 2017, and on January 23, 2018, MedImpact International brought an arbitration in Dubai against Dimensions alleging that Dimensions had obtained access to its intellectual property through its prior joint venture with MedImpact International and had used that access to misappropriate and misuse MedImpact International’s intellectual property.

Dimensions was ordered to pay an immaterial amount of damages and attorneys’ fees, and enjoined from future use of certain claimed MedImpact International intellectual property.

On September 26, 2019, MedImpact Healthcare Systems, Inc., MedImpact International, MedImpact International Hong Kong Ltd (collectively, “MedImpact”) filed suit in the U.S.

District Court for the Southern District of California alleging that various IQVIA entities (IQVIA Inc., IQVIA AG, and IQVIA Ltd.) and two IQVIA employees in the Middle East misappropriated its intellectual property, in violation of, among other things, the U.S.

Defend Trade Secrets Act (“DTSA”) and the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

In particular, MedImpact alleged that IQVIA acquired Dimensions to obtain access to MedImpact’s intellectual property and then used that access to misappropriate and misuse MedImpact's intellectual property.

MedImpact claimed damages of approximately $ 100 million and sought the trebling of its damages and reimbursement of its litigation expenses, including its attorneys’ fees.

MedImpact further sought to enjoin IQVIA from continuing to misuse its intellectual property.

On October 7, 2022, the Court dismissed MedImpact’s RICO claims as well as all claims against IQVIA Inc., IQVIA Ltd., and one of the individual employee defendants.

IQVIA rejects all of the claims raised by MedImpact and vigorously defended IQVIA’s position.

On December 13, 2021, IQVIA filed suit against MedImpact in the same California federal court, alleging that MedImpact and a former executive misappropriated and misused IQVIA’s intellectual property received in the same prior joint venture, in violation of, among other things, the DTSA and RICO.

IQVIA sought treble damages in an unspecified amount, reimbursement of litigation expenses, including attorneys’ fees, and to enjoin MedImpact from continuing to misuse its intellectual property.

The parties have agreed to settle their respective claims against one another for a payment by the Company of an immaterial amount.

Stockholders’ Equity

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Equity Repurchase Program

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.

On October 30, 2013, the Company’s Board of Directors (the “Board”) first approved the Company's equity repurchase program (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 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.

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As of December 31, 2022, the Company had remaining authorization to repurchase up to approximately $ 1.36 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.

2021 Offerings

There were no equity offerings during the year.

2020 Offerings

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.

Pursuant to an agreement with the underwriters, the Company’s per-share purchase price for repurchased shares was the same as the per share purchase price payable by the underwriters to the Selling Stockholders.

There were no equity offerings during the years ended December 31, 2022, 2021 and 2020.

Other Equity Repurchases

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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:

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

Year Ended December 31,

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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.

As of December 31, 2022 and 2021, the Company had no other material non-controlling interests.

Business Combinations

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.

The Company completed several individually immaterial acquisitions during the years ended December 31, 2022 and 2021.

The Company’s assessment of fair value, including the valuation of certain acquired intangibles, and the purchase price allocation related to the acquisitions that occurred during the year ended December 31, 2022 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 Company recorded goodwill from these acquisitions, primarily attributable to assembled workforce and expected synergies.

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

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:

The following table provides certain preliminary financial information for these acquisitions:

Year Ended December 31,

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Net assets acquired (1)

(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.

$ 1,487 $ 1,542

(1) Net assets acquired include contingent consideration and deferred purchase price of $ 139 million and $ 44 million for the years ended December 31, 2022 and 2021, respectively.

The portion of goodwill deductible for income tax purposes was preliminarily assessed as $ 275 million and $ 503 million for the years ended December 31, 2022 and 2021, respectively.

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

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

Year Ended December 31,

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Customer relationships 1 - 17 years $ 382 $ 393

Non-compete agreements 3 - 5 years 2 2

Software and related assets 3 - 8 years 79 133

Trade names 3 - 15 years 31 1

Backlog 1 - 4 years 24 17

Databases 5 - 7 years 11 —

Trade names 2 - 4 years 7 31

Non-compete agreements 3 - 5 years 6 2

Total Other identifiable intangibles $ 509 $ 576

Restructuring

The Company has continued to take restructuring actions in 2021 to align its resources and reduce overcapacity to adapt to changing market conditions and integrate acquisitions.

The Company has continued to take restructuring actions in the year ended December 31, 2022 to align its resources and reduce overcapacity to adapt to changing market conditions and integrate acquisitions.

These actions include consolidating functional activities, eliminating redundant positions, and aligning resources with customer requirements.

These restructuring actions are expected to continue into 2023.

The management approved plans resulted in approximately $ 20 million, $ 52 million and $ 75 million of restructuring expense, net of reversals, which consisted of severance, facility closure costs and other exit-related costs in 2021, 2020, and 2019, respectively.

The management approved plans resulted in approximately $ 28 million, $ 20 million and $ 52 million of restructuring expense, net of reversals, which consisted primarily of severance and other exit-related costs in the years ended December 31, 2022, 2021 and 2020, respectively.

The following amounts were recorded for the restructuring plans:

(in millions) Severance and Related Costs Exit Costs Total

(in millions) Severance and

Related Costs Exit Costs Total

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

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The Company expects the majority of the restructuring accruals as of December 31, 2022 will be paid in 2023.

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

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

Year Ended December 31,

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United States taxes recorded on foreign earnings(*)

( 4 ) ( 29 ) 2

Tax contingencies 14 3 ( 5 )

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Non-controlling interest — — ( 5 )

Other ( 1 ) 4 3

$ 260 $ 163 $ 72

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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.

In the year ended December 31, 2022, the Company recorded a benefit of $ 6 million related to a 2021 U.S.

Federal tax return position associated with FDII and GILTI tax credits.

In addition, the effective tax rate was impacted by changes in the geographical mix of earnings amongst foreign tax jurisdictions as well as state and local tax rates.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022, which, among other things, implements a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy, which will go into effect in 2023.

The Company is assessing these impacts on its 2023 and forward consolidated financial statements.

On December 12, 2022 the European Union member states agreed to implement the Organization for Economic Co-operation and Development’s (“OECD”) Pillar 2 global corporate minimum tax rate of 15% on companies with revenues of at least $790 million, which would go into effect in 2024.

The Company is assessing the impact of this proposal as countries are actively considering changes to their tax laws to adopt certain parts of the OECD’s proposal.

In the year ended December 31, 2021, the Company recorded a benefit of $ 29 million related to a 2020 U.S.

Federal tax return position associated with 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.

In the year ended December 31, 2020, the U.S.

Treasury Department issued final regulations regarding FDII and GILTI.

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

In 2019 the U.S.

Treasury Department issued final regulations on the transition tax and proposed regulations on FDII, which was introduced by the Tax Act enacted by the U.S.

government on December 22, 2017.

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.

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 $ 5,001 million as of December 31, 2022.

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Lease liability 73 92

Foreign exchange on debt instruments — 143

interest expense limitation 30 62

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Net deferred income tax liabilities $ ( 346 ) $ ( 286 )

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.

During the year ended December 31, 2022, the net deferred tax liabilities increased mainly due to foreign exchange revaluations of debt instruments and utilization of net operating losses and tax credits.

This increase was 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 $ 487 million as of December 31, 2022.

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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 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.

In the year ended December 31, 2022, the Company decreased its valuation allowance by $ 37 million to $ 257 million as of December 31, 2022 from $ 294 million as of December 31, 2021.

The valuation allowance decreased primarily due to current year state tax expenses on revaluation and utilization of state net operating losses.

The decrease is primarily offset by 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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The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of income.

In 2021, 2020 and 2019, the amount of interest and penalties recorded as an addition to income tax expense in the accompanying consolidated statements of income was $ 0 million , $ 3 million and $ 2 million, respectively.

In the years ended December 31, 2022, 2021 and 2020, the amount of interest and penalties recorded as an addition to income tax expense in the accompanying consolidated statements of income was $ 2 million, $ — million and $ 3 million, respectively.

As of December 31, 2022, and 2021, the Company had accrued approximately $ 21 million and $ 19 million, respectively, of interest and penalties.

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(in millions) 2022 2021 2022 2021

Deposits and other assets $ 83 $ 23 $ 39 $ 7

Accrued expenses $ 3 $ 2 $ 10 $ 15

Deposits and other assets, net $ 56 $ 83 $ 50 $ 39

Accounts payable and accrued expenses $ 4 $ 3 $ 10 $ 10

Other liabilities $ 33 $ 44 $ 146 $ 187

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

Accumulated other comprehensive loss $ ( 2 ) $ 29 $ ( 6 ) $ ( 24 )

As of December 31, 2022, the benefit obligation and amount recognized in AOCI for other postretirement benefits were immaterial.

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$ 6 $ 5 $ 87 $ 85

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

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

Pension Benefits

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Total recognized in net periodic benefit cost and other comprehensive income $ 21 $ ( 57 ) $ 29 $ 1 $ ( 24 ) $ 55

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 .

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.

Gain (losses) affecting the benefit obligation for the year ending December 31, 2022 was primarily related to the changes in discount rates, as well as changes in other actuarial assumptions which are driven by changing market conditions .

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

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Pension Benefits

United States Plans Non-United States Plans

United States

Plans Non-United States Plans

2022 2021 2022 2021

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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 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:

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Total assets in the fair value hierarchy 121 — 121 146 — 146

Common/collective trusts measured at net asset value (“NAV”)(1)

Assets measured at net asset value (“NAV”) (1)

— — 298 — — 378

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The pension plans do not have investments in Company stock as of December 31, 2022 and 2021.

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.

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, avoiding short-term volatility of investment returns, and managing risks in accordance with plan investment strategies.

The plans seek to achieve these objectives by investing in a mixture of real (equities) and monetary (fixed interest) assets.

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Years 2028 through 2032 298

Benefit payments (net of expected participant contributions) for other postretirement benefits are expected to be de minimis over the periods presented.

Benefit payments (net of expected participant contributions) for other postretirement benefits are expected to be immaterial over the years presented.

Defined Contribution Plans

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In the United States, the Company has a 401(k) plan under which the Company matches employee deferrals at varying percentages and specified limits of the employee’s salary.

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

For the years ended December 31, 2022, 2021 and 2020, the Company expensed $ 74 million, $ 60 million and $ 48 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 between Quintiles and IMS Health, which was frozen to additional accruals for future service contributions in 2012.

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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 as of December 31, 2021, and the Company’s expense for the year then ended, were not material.

The obligation related to these benefits as of December 31, 2022 and 2021, and the Company’s expense for the years then ended, were not material.

Stock Incentive Plans

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In April 2017, the Company’s 2017 Incentive and Stock Award Plan (the “2017 Plan”) was approved by the Company’s stockholders.

The 2017 Plan consolidates the unused share pools under the Company’s 2014 Incentive and Stock Award Plan (the “2014 Plan”), the Company’s 2013 Stock Incentive Plan (the “2013 Plan”), the Company’s 2010 Equity Incentive Plan (the “2010 Plan”) and the Company’s 2008 Stock Incentive Plan (the “2008 Plan”), and together with the 2010 Plan, the 2013 Plan and the 2014 Plan (the “Prior Plans”), makes shares underlying outstanding awards granted under (but not ultimately delivered) the Prior Plans eligible for use in connection with new awards under the 2017 Plan.

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

The Company recognized stock-based compensation expense of $ 194 million, $ 170 million and $ 95 million in the years ended December 31, 2022, 2021 and 2020, respectively.

Stock-based compensation expense is included in selling, general and administrative expenses on the accompanying consolidated statements of income.

The associated future income tax benefit recognized was $ 26 million, $ 14 million and $ 22 million in 2021, 2020, and 2019, respectively.

The associated future income tax benefit recognized was $ 28 million, $ 26 million and $ 14 million in the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was approximately $ 228 million of total unrecognized stock-based compensation expense related to outstanding non-vested stock-based compensation arrangements, which the Company expects to recognize over a weighted average period of 1.50 years.

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All outstanding stock options are fully vested.

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

The Company’s stock option activity in the year ended December 31, 2022 is as follows:

(in millions, except number of options and exercise price)

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Outstanding as of December 31, 2022 320,353 $ 54.99 $ 48

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

The total intrinsic value of options exercised was approximately $ 9 million, $ 29 million and $ 120 million in the years ended December 31, 2022, 2021 and 2020, respectively.

The Company received cash of approximately $ 2 million, $ 7 million and $ 25 million in 2022, 2021, and 2020, respectively, from options exercised.

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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:

The Company’s SSR activity in the year ended December 31, 2022 is as follows:

(in millions, except number of SSRs and exercise price)

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Outstanding as of December 31, 2022 4,055,769 $ 134.36 $ 304

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

The total intrinsic value of SSRs exercised was approximately $ 25 million, $ 81 million and $ 73 million in the years ended December 31, 2022, 2021 and 2020 respectively.

The weighted average remaining contractual life of the SSRs outstanding and exercisable as of December 31, 2022 is 6.0 years and 6.0 years, respectively.

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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:

The Company’s performance award activity in the year ended December 31, 2022 is as follows:

Number of Performance Awards Weighted Average Grant-Date Fair Value

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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.

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

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

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

The Company’s RSU activity in the year ended December 31, 2022 is as follows:

Number of RSUs Weighted Average Grant-Date

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As of December 31, 2022, 2021 and 2020, the weighted average fair value per share of the CSRs granted was $ 147.41 , $ 216.87 and $ 112.10 , respectively.

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

The Company paid approximately $ 1 million, $ 1 million and $ 4 million to settle exercised CSRs in the years ended December 31, 2022, 2021 and 2020 respectively.

The weighted average remaining contractual life of the CSRs outstanding and exercisable as of December 31, 2022 is 2.6 years and 2.6 years, respectively.

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As of December 31, 2022, there are 6,936 Cash RSUs outstanding with an intrinsic value of approximately $ 1.4 million.

Restricted Stock Awards

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.

Long Term Incentive Awards - Stock Settled

During the year ended December 31, 2022, the Company entered into long term incentive award agreements with certain employees totaling a fixed monetary amount of $80 million to issue a variable number of common shares based on the fair market value when the awards vest on the third anniversary of the grant date.

The Company accounts for the awards as liability-classified awards with the liability recorded in other liabilities in the consolidated balance sheet.

The Company recorded approximately $9 million of stock-based compensation expense during the year ended December 31, 2022 for these awards.

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.

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Total revenues 14,410 13,874 11,359

Costs of revenue, exclusive of depreciation and amortization

Cost of revenues, exclusive of depreciation and amortization

Technology & Analytics Solutions 3,348 3,278 2,900

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Contract Sales & Medical Solutions 639 652 626

Total costs of revenue 9,233 7,500 7,300

Total cost of revenues, exclusive of depreciation and amortization 9,382 9,233 7,500

Selling, general and administrative expenses

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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.

For the years ended December 31, 2022, 2021 and 2020 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 that have not been met at the end of the reporting period or the effect of including such stock-based awards in the computation would be anti-dilutive was 0.5 , 0.1 , and 2.4 , million, respectively.

Accumulated Other Comprehensive (Loss) Income

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

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

Reclassification adjustments — ( 1 ) — — ( 1 )

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

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

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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:

Other comprehensive (loss) income before reclassifications ( 255 ) 53 ( 13 ) ( 116 ) ( 331 )

Reclassification adjustments — 12 — ( 2 ) 10

Balance as of December 31, 2022 $ ( 825 ) $ 44 $ ( 8 ) $ 62 $ ( 727 )

Below is a summary of the adjustments for 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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Foreign exchange forward contracts Revenues 10 5 1

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

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

Total before income taxes ( 12 ) ( 16 ) ( 13 )

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Supplemental Cash Flow Information:

Interest paid $ 343 $ 399 $ 421

Interest paid, net $ 379 $ 343 $ 399

Income taxes paid, net of refunds $ 255 $ 222 $ 209

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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