What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-01 compared with 2023-04-28 · 153 added, 64 removed, 446 unchanged (33% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended

(in millions, except per share data) 2023 2022 2023 2022

8 unchanged sentences

Other (income) expense, net ( 16 ) 33 ( 42 ) 43

Income before income taxes and equity in losses of unconsolidated affiliates 362 400

Income before income taxes and equity in earnings (losses) of unconsolidated affiliates 375 328 737 728

Income tax expense 81 71 152 142

Income before equity in losses of unconsolidated affiliates 291 329

Equity in losses of unconsolidated affiliates ( 2 ) ( 4 )

Income before equity in earnings (losses) of unconsolidated affiliates 294 257 585 586

Equity in earnings (losses) of unconsolidated affiliates 3 ( 1 ) 1 ( 5 )

Net income $ 297 $ 256 $ 586 $ 581

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(in millions) 2023 2022 2023 2022

Net income $ 297 $ 256 $ 586 $ 581

Comprehensive income adjustments:

Unrealized gains on derivative instruments, net of income tax expense of $ 3 , $ 9

Comprehensive income (loss) adjustments:

Unrealized gains (losses) on derivative instruments, net of income tax expense (benefit) of $ 8 , $( 1 ), $ 11 , $ 8

22 ( 7 ) 32 23

Defined benefit plan adjustments, net of income tax expense of $ — , $ — , $ — , $ —

— ( 4 ) 1 ( 6 )

Foreign currency translation, net of income tax (benefit) expense of $( 3 ), $ 84 , $( 32 ), $ 111

( 44 ) ( 281 ) ( 34 ) ( 321 )

Reclassification adjustments:

Reclassifications on derivative instruments included in net income, net of income tax (expense) benefit of $( 3 ), $ 4 , $( 11 ), $ 4

Comprehensive income $ 285 $ 312

( 7 ) 14 ( 32 ) 13

Comprehensive income (loss) $ 268 $ ( 22 ) $ 553 $ 290

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

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share data) March 31, 2023 December 31, 2022

(in millions, except per share data) June 30, 2023 December 31, 2022

Current assets:

30 unchanged sentences

Stockholders’ equity:

Common stock and additional paid-in capital, 400.0 shares authorized as of March 31, 2023 and December 31, 2022, $ 0.01 par value, 256.9 shares issued and 185.5 shares outstanding as of March 31, 2023;

Common stock and additional paid-in capital, 400.0 shares authorized as of June 30, 2023 and December 31, 2022, $ 0.01 par value, 257.0 shares issued and 183.1 shares outstanding as of June 30, 2023;

256.4 shares issued and 185.7 shares outstanding as of December 31, 2022

1 unchanged sentence

Retained earnings 3,920 3,334

Treasury stock, at cost, 71.4 and 70.7 shares as of March 31, 2023 and December 31, 2022, respectively

Treasury stock, at cost, 73.9 and 70.7 shares as of June 30, 2023 and December 31, 2022, respectively

( 8,364 ) ( 7,740 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2023 2022

5 unchanged sentences

Stock-based compensation 125 75

Losses from unconsolidated affiliates 2 4

(Earnings) losses from unconsolidated affiliates ( 1 ) 5

(Gain) loss on investments, net ( 10 ) 29

12 unchanged sentences

Financing activities:

Proceeds from issuance of debt 1,250 1,250

Payment of debt issuance costs ( 18 ) ( 5 )

Repayment of debt and principal payments on finance leases ( 77 ) ( 47 )

32 unchanged sentences

Balance, March 31, 2023 256.9 ( 71.4 ) 3 10,906 3,623 ( 7,869 ) ( 731 ) 5,932

Issuance of common stock 0.1 — — — — — — —

Repurchase of common stock, net of tax — ( 2.5 ) — — — ( 495 ) — ( 495 )

Stock-based compensation — — — 43 — — — 43

Net income — — — — 297 — — 297

Unrealized gains on derivative instruments, net of tax — — — — — — 22 22

Foreign currency translation, net of tax — — — — — — ( 44 ) ( 44 )

Reclassification adjustments, net of tax — — — — — — ( 7 ) ( 7 )

Balance, June 30, 2023 257 ( 73.9 ) $ 3 $ 10,949 $ 3,920 $ ( 8,364 ) $ ( 760 ) $ 5,748

(in millions) Common

17 unchanged sentences

Balance, March 31, 2022 256.2 ( 66.9 ) 3 10,742 2,568 ( 6,975 ) ( 419 ) 5,919

Issuance of common stock 0.1 — — ( 2 ) — — — ( 2 )

Repurchase of common stock — ( 2.8 ) — — — ( 590 ) — ( 590 )

Stock-based compensation — — — 47 — — — 47

Net income — — — — 256 — — 256

Unrealized losses on derivative instruments, net of tax — — — — — — ( 7 ) ( 7 )

Defined benefit plan adjustments, net of tax — — — — — — ( 4 ) ( 4 )

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

Reclassification adjustments, net of tax — — — — — — 14 14

Balance, June 30, 2022 256.3 ( 69.7 ) $ 3 $ 10,787 $ 2,824 $ ( 7,565 ) $ ( 697 ) $ 5,352

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

18 unchanged sentences

The Company adopted this new accounting guidance effective January 1, 2023.

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

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

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

The following tables represent revenues by geographic region and reportable segment for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023

The following tables represent revenues by geographic region and reportable segment for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 2023

(in millions) Technology &

6 unchanged sentences

Total revenues $ 1,456 $ 2,096 $ 176 $ 3,728

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

(in millions) Technology &

6 unchanged sentences

Total revenues $ 1,408 $ 1,950 $ 183 $ 3,541

No individual customer represented 10% or more of consolidated revenues for the three months ended March 31, 2023 or 2022.

Six Months Ended June 30, 2023

(in millions) Technology &

Analytics Solutions Research &

Development Solutions Contract Sales &

Medical Solutions Total

Americas $ 1,507 $ 1,965 $ 150 $ 3,622

Europe and Africa 1,087 1,027 96 2,210

Asia-Pacific 306 1,130 112 1,548

Total revenues $ 2,900 $ 4,122 $ 358 $ 7,380

Six Months Ended June 30, 2022

(in millions) Technology &

Analytics Solutions Research &

Development Solutions Contract Sales &

Medical Solutions Total

Americas $ 1,397 $ 1,812 $ 179 $ 3,388

Europe and Africa 1,136 1,039 89 2,264

Asia-Pacific 314 1,033 110 1,457

Total revenues $ 2,847 $ 3,884 $ 378 $ 7,109

No individual customer represented 10% or more of consolidated revenues for the three and six months ended June 30, 2023 or 2022.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2023, approximately $ 31.4 billion of revenues are expected to be recognized in the future from remaining performance obligations.

As of June 30, 2023, approximately $ 31.0 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 85% over the next five years, with the balance recognized thereafter.

3 unchanged sentences

Trade accounts receivables and unbilled services consist of the following:

(in millions) March 31, 2023 December 31, 2022

(in millions) June 30, 2023 December 31, 2022

Trade accounts receivable $ 1,339 $ 1,329

4 unchanged sentences

Unbilled services and unearned income were as follows:

(in millions) March 31, 2023 December 31, 2022 Change

(in millions) June 30, 2023 December 31, 2022 Change

Unbilled services $ 1,828 $ 1,624 $ 204

1 unchanged sentence

Net balance $ ( 16 ) $ ( 173 ) $ 157

Unbilled services, which is comprised of approximately 66 % and 61 % of unbilled receivables and 34 % and 39 % of contract assets as of March 31, 2023 and December 31, 2022, respectively, increased by $ 121 million as compared to December 31, 2022.

Unbilled services, which is comprised of approximately 66 % and 61 % of unbilled receivables and 34 % and 39 % of contract assets as of June 30, 2023 and December 31, 2022, respectively, increased by $ 204 million as compared to December 31, 2022.

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 $ 30 million over the same period resulting in an increase of $ 91 million in the net balance of unbilled services and unearned income between March 31, 2023 and December 31, 2022.

Unearned income increased by $ 47 million over the same period resulting in an increase of $ 157 million in the net balance of unbilled services and unearned income between June 30, 2023 and December 31, 2022.

The change in the net balance is driven by the difference in timing of revenue recognition in accordance with Accounting Standards Codification ("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 is expected to be recognized in revenues during the year ended December 31, 2023.

Bad debt expense recognized on the Company’s trade accounts receivable was immaterial for the three months ended March 31, 2023 and 2022.

Bad debt expense recognized on the Company’s trade accounts receivable was immaterial for the three and six months ended June 30, 2023 and 2022.

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 three months ended March 31, 2023, through its accounts receivable factoring arrangements that the Company utilizes most frequently, the Company factored approximately $ 181 million of trade accounts receivable on a non-recourse basis and received approximately $ 174 million in cash proceeds from the sales.

During the six months ended June 30, 2023, through its accounts receivable factoring arrangements that the Company utilizes most frequently, the Company factored approximately $ 394 million of customer invoices on a non-recourse basis and received approximately $ 385 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.

The following is a summary of goodwill by reportable segment for the three months ended March 31, 2023:

The following is a summary of goodwill by reportable segment for the six months ended June 30, 2023:

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

2 unchanged sentences

Impact of foreign currency fluctuations and other 16 9 ( 3 ) 22

Balance as of March 31, 2023 $ 11,611 $ 2,251 $ 153 $ 14,015

Balance as of June 30, 2023 $ 11,591 $ 2,436 $ 151 $ 14,178

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

(in millions) Balance Sheet Classification March 31, 2023 December 31, 2022

(in millions) Balance Sheet Classification June 30, 2023 December 31, 2022

Assets Liabilities Notional Assets Liabilities Notional

4 unchanged sentences

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

Three Months Ended March 31,

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

(in millions) 2023 2022 2023 2022

2 unchanged sentences

Total $ 20 $ 10 $ — $ 48

The Company expects $ 35 million of pre-tax unrealized gains related to its foreign exchange contracts and interest rate derivatives included in accumulated other comprehensive (loss) income (“AOCI”) as of March 31, 2023 to be reclassified into earnings within the next twelve months.

As of March 31, 2023, the Company's foreign currency denominated debt balance (net of original issue discount) designated as a hedge of its net investment in certain foreign subsidiaries totaled € 5,207 million ($ 5,664 million).

The amount of foreign exchange (losses) gains related to the net investment hedge included in the cumulative translation adjustment component of AOCI for the three months ended March 31, 2023 and 2022 was $( 89 ) million and $ 119 million, respectively.

The Company expects $ 41 million of pre-tax unrealized gains related to its foreign exchange contracts and interest rate derivatives included in accumulated other comprehensive (loss) income (“AOCI”) as of June 30, 2023 to be reclassified into earnings within the next twelve months.

As of June 30, 2023, the Company's foreign currency denominated debt balance (net of original issue discount) designated as a hedge of its net investment in certain foreign subsidiaries totaled € 5,203 million ($ 5,665 million).

The amount of foreign exchange (losses) gains related to the net investment hedge included in the cumulative translation adjustment component of AOCI for the six months ended June 30, 2023 and 2022 was $( 92 ) million and $ 466 million, respectively.

Fair Value Measurements

10 unchanged sentences

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

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values as of March 31, 2023 and December 31, 2022 due to their short-term nature.

As of March 31, 2023 and December 31, 2022, the fair value of total debt was $ 12,793 million and $ 12,281 million, respectively, as determined under Level 2 measurements for these financial instruments.

The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values as of June 30, 2023 and December 31, 2022 due to their short-term nature.

As of June 30, 2023 and December 31, 2022, the fair value of total debt was $ 13,360 million and $ 12,281 million, respectively, as determined under Level 2 measurements for these financial instruments.

Recurring Fair Value Measurements

The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of March 31, 2023:

The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported at fair value on a recurring basis as of June 30, 2023:

(in millions) Level 1 Level 2 Level 3 Total

20 unchanged sentences

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

Based on the assessments of the probability of achieving specific targets, as of March 31, 2023, the Company has accrued approximately 76 % of the maximum contingent consideration payments that could potentially become payable.

The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the three months ended March 31, 2023:

Based on the assessments of the probability of achieving specific targets, as of June 30, 2023, the Company has accrued approximately 50 % of the maximum contingent consideration payments that could potentially become payable.

The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the six months ended June 30, 2023:

(in millions) Contingent Consideration

3 unchanged sentences

Revaluations included in earnings and foreign currency translation adjustments ( 16 )

Balance as of March 31, 2023 $ 110

Balance as of June 30, 2023 $ 146

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

2 unchanged sentences

Non-recurring Fair Value Measurements

As of March 31, 2023, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaled $ 18,946 million and were identified as Level 3.

As of June 30, 2023, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaled $ 19,303 million and were identified as Level 3.

These assets are comprised of debt investments and cost and equity method investments of $ 183 million, goodwill of $ 14,178 million and other identifiable intangibles, net of $ 4,942 million.

Credit Arrangements

The following is a summary of the Company’s revolving credit facilities as of March 31, 2023:

The following is a summary of the Company’s revolving credit facilities as of June 30, 2023:

Interest Rates

$ 2,000 million (revolving credit facility)

LIBOR in the relevant currency borrowed plus a margin of 1.25 % as of March 31, 2023

Dollar Term SOFR plus a margin of 1.25 % plus a 10 basis credit spread adjustment as of June 30, 2023

$ 110 million (receivables financing facility)

LIBOR Market Index Rate ( 4.86 % as of March 31, 2023) plus 0.90 %

Dollar LIBOR Market Index Rate ( 5.22 % as of June 30, 2023) plus 0.90 %

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

(dollars in millions) March 31, 2023 December 31, 2022

(dollars in millions) June 30, 2023 December 31, 2022

Revolving Credit Facility due 2026:

Dollar denominated borrowings—U.S.

Dollar LIBOR at average floating rates of 6.08 %

Dollar Term SOFR at average floating rates of 6.45 %

Senior Secured Credit Facilities:

Term A Loan due 2026—U.S.

Dollar LIBOR at average floating rates of 6.09 %

Dollar Term SOFR at average floating rates of 6.45 %

Term A Loan due 2026—Euribor at average floating rates of 4.85 %

Term A Loan due 2027—U.S.

Dollar SOFR at average floating rates of 6.16 %

Dollar Term SOFR at average floating rates of 6.45 %

Term B Loan due 2024—Euribor at average floating rates of 5.60 %

8 unchanged sentences

Dollar denominated

5.700 % Senior Secured Notes due 2028—U.S.

Dollar denominated

6.500 % Senior Notes due 2030—U.S.

Dollar denominated

2.875 % Senior Notes due 2025—Euro denominated

11 unchanged sentences

Long-term debt $ 12,433 $ 12,595

Contractual maturities of long-term debt as of March 31, 2023 are as follows:

Contractual maturities of long-term debt as of June 30, 2023 are as follows:

(in millions)

2 unchanged sentences

Senior Secured Credit Facilities

As of March 31, 2023, the Company’s Fifth Amended and Restated Credit Agreement provided financing through several senior secured credit facilities of up to $ 7,632 million, which consisted of $ 6,932 million principal amounts of debt outstanding (as detailed in the table above), and $ 695 million of available borrowing capacity on the $ 1,500 million revolving credit facility and standby letters of credit.

As of June 30, 2023, the Company’s Fifth Amended and Restated Credit Agreement provided financing through several senior secured credit facilities of up to $ 8,095 million, which consisted of $ 6,295 million principal amounts of debt outstanding (as detailed in the table above), and $ 1,795 million of available borrowing capacity on the $ 2,000 million revolving credit facility and standby letters of credit.

The revolving credit facility is comprised of a $ 1,175 million senior secured revolving facility available in U.S.

9 unchanged sentences

dollar SOFR plus a 10 basis point Credit Spread Adjustment.

On May 23, 2023, IQVIA Inc.

(the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and sale of $ 750 million in gross proceeds of the Issuer’s 5.700 % senior secured notes due 2028 (the “Senior Secured Notes”) and $ 500 million in gross proceeds of 6.500 % senior notes due 2030 (the “Senior Notes” and, together with the Senior Secured Notes, the “Notes”).

The Senior Secured Notes were issued pursuant to an Indenture, dated May 23, 2023 (the “Secured Notes Indenture”), among the Issuer, U.S.

Bank Trust Company, National Association, as trustee of the Senior Secured Notes and as collateral agent, and the Company and certain subsidiaries of the Issuer as guarantors.

The Senior Notes were issued pursuant to an Indenture, dated May 23, 2023, among the Issuer, U.S.

Bank Trust Company, National Association, as trustee of the Senior Notes, and certain subsidiaries of the Issuer as guarantors (the “Senior Notes Indenture” and, together with the Secured Notes Indenture, the “Indentures”).

The net proceeds from the notes offering were used to repay existing borrowings under the Issuer’s revolving credit facility and to pay fees and expenses related to the Notes offering.

The Notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction.

Pursuant to a registration rights agreement entered into in connection with the Notes offering, the Issuer and the guarantors agreed, among other things, to use commercially reasonable efforts to, within certain time periods, file a registration statement with respect to a registered offer to exchange the Senior Secured Notes for new exchange notes, have the exchange offer registration statement declared effective, and complete the exchange offer promptly thereafter, unless the Senior Secured Notes are redeemed earlier.

The Senior Secured Notes are secured obligations of the Issuer, will mature on May 15, 2028, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 5.700 % per year, with interest payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2023.

The Senior Notes are unsecured obligations of the Issuer, will mature on May 15, 2030, unless earlier repurchased or redeemed in accordance with their terms, and bear interest at the rate of 6.500 % per year, with interest payable semi-annually on May 15 and November 15 of each year, beginning on November 15, 2023.

The Issuer may redeem (i) the Senior Secured Notes prior to April 15, 2028 subject to a customary make-whole premium, and thereafter subject to a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest and (ii) the Senior Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to May 15, 2026 (subject to a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 3.250 % to 0.000 %.

Restrictive Covenants

2 unchanged sentences

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

As of March 31, 2023, the Company was in compliance in all material respects with the financial covenants under the Company’s financing arrangements .

As of June 30, 2023, the Company was in compliance in all material respects with the financial covenants under the Company’s financing arrangements .

Contingencies

43 unchanged sentences

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

No shares of preferred stock were issued or outstanding as of March 31, 2023 or December 31, 2022.

No shares of preferred stock were issued or outstanding as of June 30, 2023 or December 31, 2022.

Equity Repurchase Program

As of March 31, 2023, the total stock repurchase authorization under the Company's equity repurchase program (the “Repurchase Program”) was $ 9,725 million.

As of June 30, 2023, the total stock repurchase authorization under the Company's equity repurchase program (the "Repurchase Program") was $ 9,725 million.

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

During the three months ended March 31, 2023, the Company repurchased 0.7 million shares of its common stock for $ 129 million under the Repurchase Program.

As of March 31, 2023, the Company has remaining authorization to repurchase up to $ 1,226 million of its common stock under the Repurchase Program.

During the six months ended June 30, 2023, the Company repurchased 3.2 million shares of its common stock for $ 619 million under the Repurchase Program.

As of June 30, 2023, the Company had remaining authorization to repurchase up to $ 736 million of its common stock under the Repurchase Program.

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

On July 31, 2023, the Company's Board of Directors increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of the Company's common stock by an additional $ 2,000 million, which increased the total amount that has been authorized under the Repurchase Program to $ 11,725 million.

After this $ 2,000 million increase in stock repurchase authorization, the Company has remaining authorization to repurchase up to $ 2,736 million of its common stock under the Repurchase Program.

Business Combinations

The Company completed several individually immaterial acquisitions during the six months ended June 30, 2023.

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

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

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

The condensed 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 preliminary financial information for these acquisitions:

(in millions) June 30, 2023

Assets acquired:

Cash and cash equivalents $ 10

Other assets 33

Other identifiable intangibles 258

Liabilities assumed:

Other liabilities ( 16 )

Deferred income taxes, long-term ( 4 )

Net assets acquired (1)

(1) Net assets acquired includes contingent consideration and deferred purchase price of $ 62 million.

The portion of goodwill deductible for income tax purposes was preliminarily assessed as $ 180 million.

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

(in millions) Amortization Period June 30, 2023

Other identifiable intangibles:

Customer relationships 10 - 15 years $ 205

Backlog 2 years 51

Software and related assets 5 years 1

Databases 5 years 1

Total Other identifiable intangibles $ 258

Restructuring

1 unchanged sentence

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

These restructuring actions are expected to continue into 2024.

These restructuring actions are expected to continue throughout 2023 and into 2024.

The following amounts were recorded for the restructuring plans:

4 unchanged sentences

Payments ( 29 )

Balance as of March 31, 2023 $ 29

Balance as of June 30, 2023 $ 34

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

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

The Company expects that the majority of the restructuring accruals as of March 31, 2023 will be paid in 2023 and 2024.

The Company's effective income tax rate was 19.6 % and 17.8 % in the first quarter of 2023 and 2022, respectively.

The effective income tax rate in the first quarter of 2023 and 2022 was favorably impacted by $ 8 million and $ 13 million, respectively, as a result of excess tax benefits recognized upon settlement of share-based compensation awards.

The Company expects that the majority of the restructuring accruals as of June 30, 2023 will be paid in 2023 and 2024.

The Company's effective income tax rate was 21.6 % and 21.6 % in the second quarter of 2023 and 2022, and 20.6 % and 19.5 % in the first six months of 2023 and 2022, respectively.

The effective income tax rate in the second quarter and in the first six months of 2023 and 2022 was favorably impacted as a result of excess tax benefits recognized upon settlement of share-based compensation awards.

For the second quarter of 2023 and 2022 this impact was $ 2 million and $ 1 million, respectively, and for the first six months of 2023 and 2022 this impact was $ 10 million and $ 14 million, respectively.

Accumulated Other Comprehensive (Loss) Income

6 unchanged sentences

Reclassification adjustments — ( 43 ) — 11 ( 32 )

Balance as of March 31, 2023 $ ( 844 ) $ 24 $ ( 7 ) $ 96 $ ( 731 )

Balance as of June 30, 2023 $ ( 891 ) $ 44 $ ( 7 ) $ 94 $ ( 760 )

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

(in millions) Affected Financial Statement

Line Item Three Months Ended March 31,

Line Item Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Derivative instruments:

11 unchanged sentences

These costs primarily consist of stock-based compensation and expenses related to integration activities and acquisitions.

The Company also does not allocate depreciation and amortization or impairment charges to its segments.

The Company also does not allocate depreciation and amortization or impairment charges, if any, to its segments.

Asset information by segment is not presented, as this measure is not used by the chief operating decision maker to assess the Company’s performance.

The Company’s reportable segment information is presented below:

Three Months Ended March 31,

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

(in millions) 2023 2022 2023 2022

25 unchanged sentences

The following table reconciles the basic to diluted weighted average shares outstanding:

Three Months Ended March 31,

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

(in millions, except per share data) 2023 2022 2023 2022

8 unchanged sentences

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 three months ended March 31, 2023 and 2022, 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 1.0 and 0.3 million, respectively.

For the three and six months ended June 30, 2023 and 2022, 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 1.2 million and 0.7 million, and 1.1 million and 0.5 million, respectively.

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

What changed 10-Q

Item 1. Financial Statements