What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-01 compared with 2023-08-01 · 88 added, 86 removed, 212 unchanged (45% of the section changed)

54 unchanged sentences

Foreign Currency Translation

In the first six months of 2023, approximately 30% of our revenues were denominated in currencies other than the United States dollar, which represents approximately 60 currencies.

In the first nine months of 2023, approximately 30% of our revenues were denominated in currencies other than the United States dollar, which represents approximately 60 currencies.

Because a large portion of our revenues and expenses are denominated in foreign currencies and our financial statements are reported in United States dollars, changes in foreign currency exchange rates can significantly affect our results of operations.

6 unchanged sentences

For information regarding our results of operations for Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical Solutions, refer to “Segment Results of Operations” later in this section.

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in millions)

Revenues $ 3,736 $ 3,562 $ 174 4.9 %

For the second quarter of 2023, our revenues increased $187 million, or 5.3%, as compared to the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $196 million, or 5.5%, reflecting a $48 million increase in Technology & Analytics Solutions and a $148 million increase in Research & Development Solutions.

Contract Sales & Medical Solutions constant currency results for the second quarter of 2023 were consistent with the same period in 2022.

Six Months Ended June 30, Change

For the third quarter of 2023, our revenues increased $174 million, or 4.9%, as compared to the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $147 million, or 4.1%, reflecting a $12 million increase in Technology & Analytics Solutions, a $126 million increase in Research & Development Solutions, and a $9 million increase in Contract Sales & Medical Solutions.

Nine Months Ended September 30, Change

(in millions)

Revenues $ 11,116 $ 10,671 $ 445 4.2 %

For the first six months of 2023, our revenues increased $271 million, or 3.8%, as compared to the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $362 million, or 5.1%, reflecting a $90 million increase in Technology & Analytics Solutions, a $274 million increase in Research & Development Solutions, and a $2 million decrease in Contract Sales & Medical Solutions.

For the first nine months of 2023, our revenues increased $445 million, or 4.2%, as compared to the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $509 million, or 4.8%, reflecting a $102 million increase in Technology & Analytics Solutions, a $400 million increase in Research & Development Solutions, and a $7 million increase in Contract Sales & Medical Solutions.

Cost of Revenues, exclusive of Depreciation and Amortization

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions)

3 unchanged sentences

64.9 % 65.2 % 65.4 % 65.4 %

The $112 million increase in cost of revenues, exclusive of depreciation and amortization, for the three months ended June 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $165 million, or 7.1%, reflecting a $55 million increase in Technology & Analytics Solutions, a $111 million increase in Research & Development Solutions, and a $1 million decrease in Contract Sales & Medical Solutions.

The $187 million increase in cost of revenues, exclusive of depreciation and amortization, for the six months ended June 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $350 million, or 7.5%, reflecting a $107 million increase in Technology & Analytics Solutions, a $247 million increase in Research & Development Solutions, and a $4 million decrease in Contract Sales & Medical Solutions.

The $105 million increase in cost of revenues, exclusive of depreciation and amortization, for the three months ended September 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $113 million, or 4.9%, reflecting a $19 million increase in Technology & Analytics Solutions, a $93 million increase in Research & Development Solutions, and a $1 million increase in Contract Sales & Medical Solutions.

The $292 million increase in cost of revenues, exclusive of depreciation and amortization, for the nine months ended September 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $463 million, or 6.6%, reflecting a $126 million increase in Technology & Analytics Solutions and a $340 million increase in Research & Development Solutions, offset by a $3 million decrease in Contract Sales & Medical Solutions.

Selling, General and Administrative Expenses

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions)

3 unchanged sentences

13.4 % 14.5 % 13.5 % 13.9 %

The $1 million decrease in selling, general and administrative expenses for the three months ended June 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $7 million, or 1.4%, reflecting an $18 million increase in Technology & Analytics Solutions and a $10 million increase in Research & Development Solutions, offset by a $1 million decrease in Contract Sales & Medical Solutions and a $20 million decrease in general corporate and unallocated expenses.

The $24 million increase in selling, general and administrative expenses for the six months ended June 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $55 million, or 5.7%, reflecting a $37 million increase in Technology & Analytics Solutions, a $17 million increase in Research & Development Solutions, and a $3 million increase in general corporate and unallocated expenses, offset by a $2 million decrease in Contract Sales & Medical Solutions.

The $15 million decrease in selling, general and administrative expenses for the three months ended September 30, 2023 as compared to the same period in 2022 included a constant currency decrease of approximately $17 million, or 3.3%, reflecting a $1 million increase in Technology & Analytics Solutions and a $19 million increase in Research & Development Solutions, offset by a $2 million decrease in Contract Sales & Medical Solutions and a $35 million decrease in general corporate and unallocated expenses.

The $9 million increase in selling, general and administrative expenses for the nine months ended September 30, 2023 as compared to the same period in 2022 included a constant currency increase of approximately $38 million, or 2.6%, reflecting a $38 million increase in Technology & Analytics Solutions and a $36 million increase in Research & Development Solutions, offset by a $4 million decrease in Contract Sales & Medical Solutions and a $32 million decrease in general corporate and unallocated expenses.

Depreciation and Amortization

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

2 unchanged sentences

7.9 % 7.0 % 7.3 % 7.2 %

The $11 million and $13 million decrease in depreciation and amortization for the three and six months ended June 30, 2023 compared to the same periods in 2022 was primarily the result of less accelerated amortization related to the abandonment of certain software assets and to a lesser extent less amortization from certain intangible assets from the merger between Quintiles and IMS Health, offset by an increase in amortization of intangible assets from acquisitions occurring in 2022 and 2023 and capitalized software.

The $49 million increase in depreciation and amortization for the three months ended September 30, 2023 compared to the same period in 2022 was primarily the result of an increase in amortization of capitalized software and of intangible assets from acquisitions occurring in 2022 and 2023.

The $36 million increase in depreciation and amortization for the nine months ended September 30, 2023 compared to the same period in 2022 was primarily the result of an increase in amortization of capitalized software and of intangible assets from acquisitions occurring in 2022 and 2023, offset by less amortization from certain intangible assets from the merger between Quintiles and IMS Health and less accelerated amortization related to the abandonment of certain software assets.

Restructuring Costs

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

3 unchanged sentences

Interest Income and Interest Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

2 unchanged sentences

Interest income includes interest received primarily from bank balances and investments.

The increase for the three and six months ended June 30, 2023 as compared to the same periods in 2022 is primarily a result of higher deposit rates.

Interest expense during the three and six months ended June 30, 2023 increased compared to the same periods in 2022 primarily due to higher base rate interest costs across the floating rate debt portfolio as well as from an increase in our net debt.

The increase for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is primarily a result of higher deposit rates.

Interest expense during the three and nine months ended September 30, 2023 increased compared to the same periods in 2022 primarily due to higher base rate interest costs across the floating rate debt portfolio as well as from an increase in our net debt.

Other (Income) Expense, Net

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

Other (income) expense, net $ (35) $ 8 $ (77) $ 51

Other (income) expense, net for the three months ended June 30, 2023 increased compared to the same period in 2022 primarily due to less foreign currency loss and gains on investments.

Other (income) expense, net for the six months ended June 30, 2023 increased compared to the same period in 2022 primarily due to foreign currency gain and gains on investments.

Other (income) expense, net for the three months ended September 30, 2023 increased compared to the same period in 2022 primarily due to revaluations of contingent consideration and less foreign currency loss on transactions.

Other (income) expense, net for the nine months ended September 30, 2023 increased compared to the same period in 2022 primarily due to foreign currency gain on transactions, revaluations of contingent consideration and gains on investments.

Income Tax Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 2023 2022

Income tax expense $ 51 $ 70 $ 203 $ 212

Our 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.

Our 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.

Our effective income tax rate was 14.6% and 19.4% in the third quarter of 2023 and 2022, and 18.7% and 19.5% in the first nine months of 2023 and 2022, respectively.

Our effective income tax rate in the third quarter and first nine months of 2023 was favorably impacted by a reversal of uncertain tax positions relating to tax credit carryforwards in the amount of $21 million.

Additionally, our effective income tax rate in the third quarter and in the first nine 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 third quarter of 2023 and 2022 this impact was $2 million and $1 million, respectively, and for the first nine months of 2023 and 2022 this impact was $12 million and $15 million, respectively.

Historically, we recorded deferred tax assets related to certain foreign tax credits.

A full valuation allowance in relation to these foreign tax credits was established as it was not expected the credits would be utilized prior to expiration.

As a result of an anticipated internal legal entity restructuring, we now believe it is reasonably possible that these foreign tax credits will be utilized and expect to reverse the valuation allowance in the near term which could create a material discrete tax benefit in the period recorded.

Segment Results of Operations

Revenues and profit by segment are as follows:

Three Months Ended June 30, 2023 and 2022

Three Months Ended September 30, 2023 and 2022

Segment Revenues Segment Profit

8 unchanged sentences

Consolidated $ 3,736 $ 3,562 $ 481 $ 472

Six Months Ended June 30, 2023 and 2022

Nine Months Ended September 30, 2023 and 2022

Segment Revenues Segment Profit

12 unchanged sentences

Technology & Analytics Solutions

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in millions) 2023 2022 $ %

3 unchanged sentences

Segment profit $ 355 $ 359 $ (4) (1.1) %

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in millions) 2023 2022 $ %

3 unchanged sentences

Segment profit $ 1,086 $ 1,129 $ (43) (3.8) %

Technology & Analytics Solutions’ revenues were $1,456 million for the second quarter of 2023, an increase of $48 million, or 3.4%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $48 million, or 3.4%, reflecting revenue growth in the Americas and Asia-Pacific regions.

Technology & Analytics Solutions’ revenues were $2,900 million for the first six months of 2023, an increase of $53 million, or 1.9%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $90 million, or 3.2%, reflecting revenue growth in the Americas and Asia-Pacific regions.

The constant currency revenue growth for the three and six months ended June 30, 2023 was driven by an increase in real world services and information and technology services.

Technology & Analytics Solutions’ revenues were $1,431 million for the third quarter of 2023, an increase of $31 million, or 2.2%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $12 million, or 0.9%, reflecting revenue growth primarily in the Americas region and to a lesser extent in the Asia-Pacific region.

Technology & Analytics Solutions’ revenues were $4,331 million for the first nine months of 2023, an increase of $84 million, or 2.0%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $102 million, or 2.4%, reflecting revenue growth primarily in the Americas region and to a lesser extent in the Asia-Pacific region.

The constant currency revenue growth for the three and nine months ended September 30, 2023 was driven by an increase in real world services and information and technology services.

The constant currency revenue growth was impacted by a decrease in COVID-19 related work.

Cost of Revenues, exclusive of Depreciation and Amortization

Technology & Analytics Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $48 million, or 5.8%, in the second quarter of 2023 over the same period in 2022.

Technology & Analytics Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $31 million, or 3.7%, in the third quarter of 2023 over the same period in 2022.

This increase included a constant currency increase of approximately $19 million, or 2.3%.

Technology & Analytics Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $72 million, or 4.3%, in the first six months of 2023 over the same period in 2022.

Technology & Analytics Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $103 million, or 4.1%, in the first nine months of 2023 over the same period in 2022.

This increase included a constant currency increase of approximately $126 million, or 5.1%.

The constant currency increase for the three and six months ended June 30, 2023 was related to an increase in compensation and related expenses and an increase in costs of acquiring and processing data to support revenue growth.

The constant currency increase for the three and nine months ended September 30, 2023 was related to an increase in compensation and related expenses and an increase in costs of acquiring and processing data to support revenue growth.

Selling, General and Administrative Expenses

Technology & Analytics Solutions’ selling, general and administrative expenses increased $14 million, or 7.1%, in the second quarter of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $18 million, or 9.2%.

Technology & Analytics Solutions’ selling, general and administrative expenses increased $20 million, or 4.8%, in the first six months of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $37 million, or 8.9%.

The constant currency increase for the three and six months ended June 30, 2023 was primarily related to an increase in compensation and related expenses.

Technology & Analytics Solutions’ selling, general and administrative expenses increased $4 million, or 1.9%, in the third quarter of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $1 million, or 0.5%.

Technology & Analytics Solutions’ selling, general and administrative expenses increased $24 million, or 3.8%, in the first nine months of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $38 million, or 6.1%.

The constant currency increase for the three and nine months ended September 30, 2023 was primarily related to an increase in compensation and related expenses.

Research & Development Solutions

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in millions)

3 unchanged sentences

Segment profit $ 495 $ 445 $ 50 11.2 %

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in millions)

3 unchanged sentences

Segment profit $ 1,391 $ 1,244 $ 147 11.8 %

Research & Development Solutions’ contracted backlog increased from $27.2 billion as of December 31, 2022 to $28.4 billion as of June 30, 2023, and we expect approximately $7.3 billion of this backlog to convert to revenue in the next twelve months.

Research & Development Solutions’ revenues were $2,096 million for the second quarter of 2023, an increase of $146 million, or 7.5%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $148 million, or 7.6%, reflecting revenue growth in the Americas and Asia-Pacific regions.

Research & Development Solutions’ revenues were $4,122 million in the first six months of 2023, an increase of $238 million, or 6.1%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $274 million, or 7.1%, reflecting revenue growth in the Americas and Asia-Pacific regions.

The constant currency revenue growth for the three and six months ended June 30, 2023 was primarily the result of volume-related increases in clinical services and to a lesser extent from volume-related increases in lab testing.

Research & Development Solutions’ contracted backlog increased from $27.2 billion as of December 31, 2022 to $28.8 billion as of September 30, 2023, and we expect approximately $7.4 billion of this backlog to convert to revenue in the next twelve months.

Research & Development Solutions’ revenues were $2,122 million for the third quarter of 2023, an increase of $143 million, or 7.2%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $126 million, or 6.4%, reflecting revenue growth primarily in the Americas and Asia-Pacific regions.

Research & Development Solutions’ revenues were $6,244 million in the first nine months of 2023, an increase of $381 million, or 6.5%, over the same period in 2022.

This increase was comprised of constant currency revenue growth of approximately $400 million, or 6.8%, reflecting revenue growth primarily in the Americas and Asia-Pacific regions.

The constant currency revenue growth for the three and nine months ended September 30, 2023 was primarily the result of volume-related increases in clinical services and to a lesser extent from volume-related increases in lab testing.

The constant currency revenue growth was impacted by a decrease in COVID-19 related work.

Cost of Revenues, exclusive of Depreciation and Amortization

Research & Development Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $69 million, or 5.1%, in the second quarter of 2023 over the same period in 2022.

Research & Development Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $75 million, or 5.6%, in the third quarter of 2023 over the same period in 2022.

This increase included a constant currency increase of approximately $93 million, or 7.0%.

Research & Development Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $133 million, or 5.0%, in the first six months of 2023 over the same period in 2022.

Research & Development Solutions’ cost of revenues, exclusive of depreciation and amortization, increased $208 million, or 5.2%, in the first nine months of 2023 over the same period in 2022.

This increase included a constant currency increase of approximately $340 million, or 8.5%.

The constant currency increase for the three and six months ended June 30, 2023 was primarily related to an increase in compensation and related expenses as a result of volume-related increases in clinical services and lab testing.

The constant currency increase for the three and nine months ended September 30, 2023 was primarily related to an increase in compensation and related expenses as a result of volume-related increases in clinical services and lab testing.

Selling, General and Administrative Expenses

Research & Development Solutions’ selling, general and administrative expenses increased $7 million, or 3.4%, in the second quarter of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $10 million, or 4.9%.

Research & Development Solutions’ selling, general and administrative expenses increased $8 million, or 1.9%, in the first six months of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $17 million, or 4.1%.

The constant currency increase for the three and six months ended June 30, 2023 was primarily related to an increase in compensation and related expenses.

Research & Development Solutions’ selling, general and administrative expenses increased $18 million, or 9.0%, in the third quarter of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $19 million, or 9.5%.

Research & Development Solutions’ selling, general and administrative expenses increased $26 million, or 4.2%, in the first nine months of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $36 million, or 5.9%.

The constant currency increase for the three and nine months ended September 30, 2023 was primarily related to an increase in compensation and related expenses.

Contract Sales & Medical Solutions

Three Months Ended June 30, Change

Three Months Ended September 30, Change

(in millions)

3 unchanged sentences

Segment profit $ 12 $ 8 $ 4 50.0 %

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

(in millions)

3 unchanged sentences

Segment profit $ 37 $ 33 $ 4 12.1 %

Contract Sales & Medical Solutions’ revenues were $176 million for the second quarter of 2023, a decrease of $7 million, or 3.8%, over the same period in 2022, which is wholly attributable to the effects of foreign currency rate fluctuations.

Contract Sales & Medical Solutions’ revenues were $358 million in the first six months of 2023, a decrease of $20 million, or 5.3%, over the same period in 2022.

This decrease included a constant currency revenue decrease of approximately $2 million, or 0.5%.

Contract Sales & Medical Solutions’ revenues were $183 million for the third quarter of 2023, which is consistent with the same period in 2022 and included a constant currency revenue growth of approximately $9 million, or 4.9%.

Contract Sales & Medical Solutions’ revenues were $541 million in the first nine months of 2023, a decrease of $20 million, or 3.6%, over the same period in 2022.

This decrease included a constant currency revenue growth of approximately $7 million, or 1.2%.

Cost of Revenues, exclusive of Depreciation and Amortization

Contract Sales & Medical Solutions’ cost of revenues, exclusive of depreciation and amortization, decreased $5 million, or 3.2%, in the second quarter of 2023 as compared to the same period in 2022, which included a constant currency decrease of approximately $1 million, or 0.6%.

Contract Sales & Medical Solutions’ cost of revenues, exclusive of depreciation and amortization, decreased $18 million, or 5.6%, in the first six months of 2023 as compared to the same period in 2022.

Contract Sales & Medical Solutions’ cost of revenues, exclusive of depreciation and amortization, decreased $1 million, or 0.6%, in the third quarter of 2023 as compared to the same period in 2022, which included a constant currency increase of approximately $1 million, or 0.6%.

Contract Sales & Medical Solutions’ cost of revenues, exclusive of depreciation and amortization, decreased $19 million, or 4.0%, in the first nine months of 2023 as compared to the same period in 2022.

This decrease included a constant currency decrease of approximately $3 million, or 0.6%.

Selling, General and Administrative Expenses

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $1 million, or 6.7%, in the second quarter of 2023 as compared to the same period in 2022, which included a constant currency decrease of approximately $1 million, or 6.7%.

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $2 million, or 6.5%, in the first six months of 2023 as compared to the same period in 2022, which included a constant currency decrease of approximately $2 million, or 6.5%.

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $3 million, or 17.6%, in the third quarter of 2023 as compared to the same period in 2022, which included a constant currency decrease of approximately $2 million, or 11.8%.

Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $5 million, or 10.4%, in the first nine months of 2023 as compared to the same period in 2022, which included a constant currency decrease of approximately $4 million, or 8.3%.

Liquidity and Capital Resources

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We have and expect to transfer cash from those subsidiaries to the United States and to other international subsidiaries when it is cost effective to do so.

We had a cash balance of $1,382 million as of June 30, 2023 ($568 million of which was in the United States), an increase from $1,216 million as of December 31, 2022.

We had a cash balance of $1,224 million as of September 30, 2023 ($406 million of which was in the United States), an increase from $1,216 million as of December 31, 2022.

Based on our current operating plan, we believe that our available cash and cash equivalents, future cash flows from operations and our ability to access funds under our revolving credit and receivables financing facilities will enable us to fund our operating requirements, capital expenditures, contractual obligations, and meet debt obligations for at least the next 12 months.

6 unchanged sentences

Equity Repurchase Program

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

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

On July 31, 2023, our Board of Directors increased the stock repurchase authorization under our equity repurchase program (the "Repurchase Program") with respect to the repurchase of our 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.

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

During the nine months ended September 30, 2023, we repurchased 3.9 million shares of our common stock for $763 million under the Repurchase Program.

As of September 30, 2023, we had remaining authorization to repurchase up to $2,592 million of our common stock under the Repurchase Program.

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

On July 31, 2023, our Board of Directors increased the stock repurchase authorization under the Repurchase Program with respect to the repurchase of our 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, we have remaining authorization to repurchase up to $2,736 million of our common stock under the Repurchase Program.

As of June 30, 2023, we had $13,839 million of total indebtedness, excluding $1,795 million of additional available borrowings under our revolving credit facility.

Our long-term debt arrangements contain customary restrictive covenants and, as of June 30, 2023, we believe we were in compliance with our restrictive covenants in all material respects.

As of September 30, 2023, we had $13,689 million of total indebtedness, excluding $1,745 million of additional available borrowings under our revolving credit facility.

Our long-term debt arrangements contain customary restrictive covenants and, as of September 30, 2023, we believe we were in compliance with our restrictive covenants in all material respects.

Senior Secured Credit Facilities

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

On April 17, 2023, we increased the capacity of the Company's senior secured revolving credit facility by $500 million U.S.

As of September 30, 2023, our Fifth Amended and Restated Credit Agreement provided financing through the senior secured credit facilities of up to $7,998 million, which consisted of $6,248 million principal amounts of debt outstanding, and $1,745 million of available borrowing capacity on the revolving credit facility and standby letters of credit.

On April 17, 2023, we increased the capacity of our senior secured revolving credit facility by $500 million U.S.

dollars, bringing the total capacity of the revolving credit facility to $2,000 million.

3 unchanged sentences

Receivables Financing Facility

As of June 30, 2023, no additional amounts of revolving loan commitments were available under the receivables financing facility.

Six months ended June 30, 2023 and 2022

As of September 30, 2023, no additional amounts of revolving loan commitments were available under the receivables financing facility.

Nine months ended September 30, 2023 and 2022

Cash Flow from Operating Activities

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2023 2022

Net cash provided by operating activities $ 1,402 $ 1,700

Cash provided by operating activities decreased $18 million during the first six months of 2023 as compared to the same period in 2022.

The decrease was primarily due to a decrease in cash from cash-related net income ($44 million) and unearned income ($23 million), offset by an increase in cash from accounts receivable and unbilled services ($32 million) and other operating assets and liabilities ($17 million).

Cash provided by operating activities decreased $298 million during the first nine months of 2023 as compared to the same period in 2022.

The decrease was due to a decrease in cash from other operating assets and liabilities ($121 million), unearned income ($95 million), accounts receivable and unbilled services ($58 million) and from cash-related net income ($24 million).

Cash Flow from Investing Activities

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2023 2022

Net cash used in investing activities $ (1,391) $ (1,529)

Cash used in investing activities increased $6 million during the first six months of 2023 as compared to the same period in 2022, primarily driven by more cash used in investments in debt and equity securities ($36 million), investments in unconsolidated affiliates, net ($3 million) and purchases of marketable securities, net ($1 million), offset by less cash used for acquisitions of businesses ($20 million) and acquisitions of property, equipment and software ($14 million).

Cash used in investing activities decreased $138 million during the first nine months of 2023 as compared to the same period in 2022, primarily driven by less cash used for acquisitions of businesses ($143 million) and acquisitions of property, equipment and software ($33 million), offset by more cash used in investments in debt and equity securities ($36 million) and investments in unconsolidated affiliates, net ($2 million).

Cash Flow from Financing Activities

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2023 2022

Net cash provided by financing activities $ 182 $ 115

Cash provided by financing activities increased $67 million during the first six months of 2023 as compared to the same period in 2022, primarily due to a decrease in cash used to repurchase common stock ($274 million) and cash payments related to employee stock option plans ($11 million), offset by an increase in cash payments on revolving credit facilities, net of proceeds ($125 million), contingent consideration and deferred purchase price accruals ($50 million), debt and principal payments on finance leases ($30 million) and debt issuance costs ($13 million).

Net cash provided by (used in) financing activities $ 38 $ (136)

Cash provided by financing activities increased $174 million during the first nine months of 2023 as compared to the same period in 2022, primarily due to a decrease in cash used to repurchase common stock ($340 million) and cash payments related to employee stock option plans ($12 million), offset by an increase in cash payments on revolving credit facilities, net of proceeds ($75 million), contingent consideration and deferred purchase price accruals ($57 million), debt and principal payments on finance leases ($32 million) and debt issuance costs ($14 million).

Off-Balance Sheet Arrangements

8 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis