UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number: 001-35907
IQVIA HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
27-1341991
(I.R.S. Employer Identification Number)
4820 Emperor Blvd., Durham, North Carolina 27703
and
83 Wooster Heights Road, Danbury, Connecticut 06810
(Address of principal executive offices and Zip Code)
(919) 998-2000 and (203) 448-4600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
IQV
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company
☒
☐
☐
Accelerated filer
Smaller reporting company
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, based upon the closing sale price as
reported on the New York Stock Exchange on June 30, 2020, the last business day of the registrant’s most recently completed second quarter, was approximately
$26.3 billion.
As of February 1, 2021, there were approximately 191,281,286 shares of the registrant’s common stock outstanding.
Portions of the registrant’s Proxy Statement for the 2021 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this
Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of
the registrant’s fiscal year ended December 31, 2020.
IQVIA HOLDINGS INC.
FORM 10-K
TABLE OF CONTENTS
PART I
PART II
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item
1.
1A.
1B.
2.
3.
4.
5.
6.
7.
7A.
Quantitative and Qualitative Disclosures About Market Risk
8.
9.
9A.
9B.
10.
11.
12.
13.
14.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Directors, Executive Officers and Corporate Governance
Executive Compensation
PART III
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accountant Fees and Services
PART IV
15.
Exhibits and Financial Statement Schedules
Exhibit Index
16.
Form 10-K Summary
Signatures
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FORWARD-LOOKING STATEMENTS
Except for any historical information contained herein, the matters discussed or incorporated by reference in this Annual
Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of
the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Such forward-looking statements reflect, among other things, our current expectations, our forecasts and our
anticipated results of operations, all of which are subject to known and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements, market trends, or industry results to differ materially from those expressed or implied
by such forward-looking statements. Therefore, any statements contained herein that are not statements of historical fact may be
forward-looking statements and should be evaluated as such. Without limiting the foregoing, the words “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “should,” “targets,” “will” and the negative thereof and similar words
and expressions are intended to identify forward-looking statements.
We caution you that any such forward-looking statements are further qualified by important factors that could cause our
actual operating results to differ materially from those in the forward-looking statements, including without limitation, that business
disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) outbreak or international conflict or other
disruptions outside of our control; our ability to accurately model or forecast the impact of the spread and/or containment of
COVID-19, among other sources of business interruption, on our operations and financial results; most of our contracts may be
terminated on short notice, and we may lose or experience delays with large client contracts or be unable to enter into new contracts;
the market for our services may not grow as we expect; we may be unable to successfully develop and market new services or enter
new markets; imposition of restrictions on our use of data by data suppliers or their refusal to license data to us; any failure by us to
comply with contractual, regulatory or ethical requirements under our contracts, including current or changes to data protection and
privacy laws; breaches or misuse of our or our outsourcing partners’ security or communications systems; failure to meet our
productivity or business transformation objectives; failure to successfully invest in growth opportunities; our ability to protect our
intellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights; the
expiration or inability to acquire third party licenses for technology or intellectual property; any failure by us to accurately and timely
price and formulate cost estimates for contracts, or to document change orders; hardware and software failures, delays in the operation
of our computer and communications systems or the failure to implement system enhancements; the rate at which our backlog converts
to revenue; our ability to acquire, develop and implement technology necessary for our business; consolidation in the industries in
which our clients operate; risks related to client or therapeutic concentration; government regulators or our customers may limit the
scope of prescription or withdraw products from the market, and government regulators may impose new regulatory requirements or
may adopt new regulations affecting the biopharmaceutical industry; the risks associated with operating on a global basis, including
currency or exchange rate fluctuations and legal compliance, including anti-corruption laws; risks related to changes in accounting
standards; general economic conditions in the markets in which we operate, including financial market conditions and risks related to
sales to government entities; the impact of changes in tax laws and regulations; and our ability to successfully integrate, and achieve
expected benefits from, our acquired businesses.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described
in Part I, Item 1A, “Risk Factors.” If one or more of these risks or uncertainties materialize, or if underlying assumptions prove
incorrect, our actual results may vary materially from those expected, estimated or projected or as otherwise suggested by the forward-
looking statements that we make for a number of reasons. Given these uncertainties, users of the information included or incorporated
by reference in this Form 10-K, including investors and prospective investors, are cautioned not to place undue reliance on such
forward-looking statements. All forward-looking statements are made only as of the date hereof. We assume no obligation to update
any such forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information.
GENERAL
When we use the terms “IQVIA,” the “Company,” “we,” “us” or “our” in this Annual Report on Form 10-K, we mean IQVIA
Holdings Inc. and its subsidiaries on a consolidated basis, unless we state or the context implies otherwise.
INDUSTRY AND MARKET DATA
This annual report on Form 10-K includes market data and forecasts with respect to the healthcare industry. In some cases,
we rely on and refer to market data and certain industry forecasts that were obtained from third party surveys, market research,
consultant surveys, publicly available information and industry publications and surveys that we believe to be reliable. However, we
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have not independently verified data from industry analyses and cannot guarantee their accuracy or completeness. We believe that data
regarding the industry, market size and its market position and market share within such industry provide general guidance but are
inherently imprecise. Other industry and market data included in this annual report are from IQVIA analyses and have been identified
accordingly, including, for example, IQVIA Market Prognosis, which is a subscription-based service that provides five-year
pharmaceutical market forecasts at the national, regional and global levels. We are a leading global information provider for the
healthcare industry and we maintain databases, produce market analyses and deliver information to clients in the ordinary course of our
business. Our information is widely referenced in the industry and used by governments, payers, academia, the life sciences industry,
the financial community and others. Most of this information is available on a subscription basis. Other reports and information are
available publicly through our IQVIA Institute for Human Data Science (the “IQVIA Institute”). All such information is based upon
our own market research, internal databases and published reports and has not been verified by any independent sources. Our estimates
and assumptions involve risks and uncertainties and are subject to change based on various factors, including those discussed in Part I,
Item IA, “Risk Factors”. These and other factors could cause results to differ materially from those expressed in the estimates and
assumptions.
TRADEMARKS AND SERVICE MARKS
All trademarks, trade names, product names, graphics and logos of IQVIA contained herein are trademarks or registered
trademarks of IQVIA Holdings Inc. or its subsidiaries, as applicable, in the United States and/or other countries. All other party
trademarks, trade names, product names, graphics and logos contained herein are the property of their respective owners. The use or
display of other parties’ trademarks, trade names, product names, graphics or logos is not intended to imply, and should not be
construed to imply, a relationship with, or endorsement or sponsorship of IQVIA Inc. or its subsidiaries by such other party.
Solely for convenience, the trademarks, service marks and trade names referred to in this annual report are listed without the
®, (sm) and (TM) symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable
licensors to these trademarks, service marks and trade names.
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Item 1. Business
Our Company
PART I
IQVIA is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life
sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology,
big data resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility —
enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve
healthcare outcomes for patients. With approximately 70,000 employees, we conduct operations in more than 100 countries.
We are a global leader in protecting individual patient privacy. We use a wide variety of privacy-enhancing technologies and
safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify
disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. Our insights and execution
capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other
healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances, in an effort to advance
their path toward cures.
We have one of the largest and most comprehensive collections of healthcare information in the world, which includes more
than one billion comprehensive, longitudinal, non-identified patient records spanning sales, prescription and promotional data, medical
claims, electronic medical records, genomics, and social media. Our scaled and growing information set contains approximately 45
petabytes of proprietary data sourced from approximately 150,000 data suppliers and covering over one million data feeds globally.
Based on this data, we deliver information and insights on over 85% of the world’s pharmaceuticals, as measured by 2019 sales. We
standardize, curate, structure and integrate this information by applying our sophisticated analytics and leveraging our global
technology infrastructure. This helps our clients run their organizations more efficiently and make better decisions to improve their
clinical, commercial and financial performance. The breadth of the intelligent, actionable information we provide is not
comprehensively available from any other source and our scope of information would be difficult and costly for another party to
replicate.
We combine our proprietary information assets with advanced analytics, transformative technology and domain expertise to
develop clinical and commercial capabilities that enable us to grow our relationships with healthcare stakeholders throughout the life
science’s value chain. This set of capabilities includes:
•
•
•
•
•
A leading healthcare-specific global IT infrastructure, representing what we believe is one of the largest and most
sophisticated information technology (“IT”) infrastructures in healthcare. We receive approximately 100 billion
healthcare records annually, and our infrastructure then connects complex healthcare data while applying a wide
range of privacy, security, operational, legal and contractual protections for data in response to local law, supplier
requirements and industry leading practices;
Analytics-driven clinical development, which improves clinical trial design, site identification and patient
recruitment by empowering therapeutic, scientific, and domain experts with expansive levels of information,
including product level tracking in 90 markets, and information about treatments and outcomes on more than one
billion non-identified patients globally;
Robust real world solutions ecosystem, with sophisticated retrospective database analytics, prospective real world
data collection technology platforms and scientific expertise, which enables us to address critical healthcare issues
of cost, value and patient outcomes;
A growing set of proprietary clinical and commercial applications, which helps our clients increase their clinical
operations performance, supports their regulatory and compliance needs and orchestrates their sales operations,
sales management, multi- channel marketing and performance management; and
A staff of approximately 70,000 employees across the globe, including over 24,000 Technology & Analytics
Solutions employees, approximately 38,000 Research & Development Solutions employees and approximately
6,000 Contract Sales & Medical Solutions employees.
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•
Integration of information, analytics, technology, and domain expertise through Connected Intelligence, which
enables us to provide our clients with more effective options to address their needs from Research and Development
through commercialization as well as truly innovative breakthroughs such as virtual trials and global real-world
evidence networks.
Our Market Opportunity
We compete in a market of greater than $260 billion consisting of outsourced research and development, real-world evidence
and connected health and technology enabled clinical and commercial operations markets for life sciences companies and the broader
healthcare industry. The following sets forth our estimates for the size of our principal markets:
•
•
•
Outsourced research and development: Biopharmaceutical spending on drug development totaled approximately
$130 billion in 2020. Of that amount, we estimate that our addressable opportunity (clinical development spending
excluding preclinical spending) was approximately $75 billion. The portion of this addressable opportunity that was
outsourced in 2020, based on our estimates, was approximately $36 billion;
Real-World Evidence and connected health: Total addressable market of approximately $80 billion based on 2020
sales that consists of two relatively equal parts. First, the market for Real-World Evidence of approximately $40
billion includes traditionally defined analytic platforms and implementation, medical and scientific analytic
services, observation studies and market access. Second, the market for connected healthcare of approximately $40
billion includes areas such as revenue cycle management, payer analytics and clinical decision support services;
and
Technology enabled commercial operations: Total addressable market of approximately $50 billion based on 2020
sales that includes information, data warehousing, IT outsourcing, software applications and other services in the
broader market for IT services. This addressable market also includes commercial services such as recruiting,
training, deploying and managing global sales forces, channel management, patient engagement services, market
access consulting, brand communication, advisory services, and health information analytics and technology
consulting.
In deriving estimates of the size of the various markets described above, we review third-party sources, which include
estimates and forecasts of spending in various segments, in combination with internal IQVIA research and analysis informed by our
experience serving these segments, as well as projected growth rates for each of these segments. See “Industry and Market Data”
above.
We believe there are six key trends affecting our end markets that will create increasing demand for research and
development services, technology & analytics solutions and contract sales and medical solutions:
Growth and innovation in the life sciences industry. The life sciences industry is a large and critical part of the global
healthcare system, and, according to the latest information available from the IQVIA Market Prognosis service, is estimated to have
generated approximately $1.27 trillion in revenue in 2020. According to our research, revenue growth in the life sciences industry
globally is expected to range from 3% to 6% between 2021 and 2025. According to the IQVIA Institute, it is estimated that spending
on pharmaceuticals in emerging markets will expand at a 6% to 9% compound annual growth rate (“CAGR”) through 2025. The
growth of emerging markets is making these geographies strategically important to life sciences organizations and, consistent with
their approach in the developed markets, we expect these organizations to apply a high degree of sophistication to their commercial
operations in these countries. For global companies, this requires highly localized knowledge and information assets, the development
of market access strategies and performance benchmarking. In addition, local players are learning that they need to compete on the
basis of improved information and analytics.
Growth in Research and Development. Spending trends in research and development are impacted as a result of several
factors, including major biopharmaceutical companies’ efforts to replenish revenues lost from the so-called “patent cliff,” increased
access to capital by the small and midcap biotechnology industry, and recent increases in pharmaceutical approvals by regulatory
authorities. The IQVIA Institute also estimates that approximately 270 new molecular entities (“NMEs”) are expected to be approved
between 2021 and 2025, compared to 234 between 2016 and 2020, and 220 between 2011 and 2015. We believe that further research
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and development spending, combined with the continued need for cost efficiency across the healthcare landscape, will continue to
create opportunities for biopharmaceutical services companies, particularly those with a global reach and broad service offerings, to
help biopharmaceutical companies with their pre- and post-launch solutions development and commercialization needs.
Increased Complexity in Research and Development. Biopharmaceutical companies face environments in which it has
become increasingly difficult to operate. Improved standards of care in many therapeutic areas and the emergence of new types of
therapies, such as biologics, genetically targeted therapies, gene and stem cell therapies, and other treatment modalities have led to
more complex development and regulatory pathways. We believe that our global clinical development capabilities, including our
expertise in biomarkers and genomics and our global laboratory network, position us well to help biopharmaceutical companies
manage the complexities inherent in an environment where this type of expertise is important. For example, Connected Intelligence
helps us validate protocols to ensure studies in new disease areas have greater accuracy and also enables us, through innovations such
as predictive analytics, to find patients who may not have been diagnosed.
Regulators require clinical trials involving local populations as part of the process for approving new pharmaceutical
products, especially in certain Asian and emerging markets. Understanding the epidemiological and physiological differences in
different ethnic populations and being able to conduct clinical trials locally in certain geographies will be important to pharmaceutical
product growth strategies, both for multinational and local/regional biopharmaceutical companies. We believe that our global clinical
development capabilities and unmatched presence in Asia and other emerging markets make us a strong partner for biopharmaceutical
companies managing the complexities of international drug development.
Financial pressures driving the need for increased efficiency. Despite expected accelerating growth in the global life
sciences market, we believe our clients will face increased operating margin pressure due to their changing product mix, pricing and
reimbursement challenges, and rising costs of compliance. Product portfolios for life sciences companies have shifted toward specialty
products with lower peak market sales potential than traditional primary care medicines. We believe that the need for
biopharmaceutical companies to maximize productivity and lower costs across their processes from research and development through
commercial operations will cause them to look to partners as they enter into outsourcing arrangements to improve efficiency. Further,
our clients are looking for new ways to simplify processes and drive operational efficiencies by using automation, consolidating
vendors and adopting new technology options such as hosted and cloud-based applications. This provides opportunities for technology
services vendors to capture and consolidate internal spending by providing lower-cost and variable-cost options that lower clients’
research and development, selling, marketing and administrative costs.
Evolving need to integrate and structure expanding sources of data. Over the past decade, many health systems around the
world have focused on digitizing medical records. While such records theoretically enhance access to data, relevant information is
often unintegrated, unstructured, siloed in disparate software systems, or entered inconsistently. In addition, new sources of data from
the internet, such as social media and information on limited patient pools, and information resulting from enhanced diagnostic
technologies are creating new sources of healthcare data.
In order to derive valuable insights from existing and expanding sources of information, clients need access to statistically
significant data sets organized into databases that can be queried and analyzed. For example, real-world evidence studies demonstrate
practical and clinical efficacies, which we believe require the aggregation and integration of large clinical data sets across all care
settings, types of therapies and patient cohorts. Longitudinal studies require analysis of non-identified patient diagnoses, treatments,
procedures and laboratory test results to identify types of patients that will likely best respond to particular therapies. Finally,
manufacturers also require the ability to analyze social media activity to identify unmet patient needs and support for new orphan
drugs. This information is highly relevant to all healthcare stakeholders and we believe the opportunity to more broadly apply
healthcare data can only be realized through structuring, organizing and integrating new and existing forms of data in conjunction with
sophisticated analytics.
Need for demonstrated value in healthcare. Participants in the healthcare industry are focused on improving quality and
reducing costs, both of which require assessment of quality and value of therapies and providers. As a result, physicians no longer
make prescribing decisions in isolation, but rather in the context of guidance and rules from payers, integrated delivery networks and
governments. We believe life sciences companies are working to bring alignment across constituents on the value of their treatments in
order to successfully develop and commercialize new therapies.
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There is increasing pressure on life sciences companies to support and justify the value of their therapies. Many new drugs
that are being approved are more expensive than existing therapies and will likely receive heightened scrutiny by regulators and payers
to determine whether the existing treatment options would be sufficient. Additionally, many new specialty drugs are molecular-based
therapies and require a more detailed understanding of clinical factors and influencers that demonstrate therapeutic value. As a result,
leading life sciences companies are utilizing more sophisticated outcome research and data analytics services.
We believe we are well positioned to take advantage of these global trends in healthcare. Beyond our proprietary information
assets, we have developed key capabilities to assess opportunities to develop and commercialize therapies, support and defend the
value of medicines and help our clients operate more efficiently through the application of insight-driven decision-making and cost-
efficient technology solutions.
Our Growth Strategy
We believe we are well positioned for continued growth across the markets we serve. Our strategy for achieving growth
includes:
Continue to innovate through our Connected Intelligence by leveraging our information, advanced analytics,
transformative technology and significant domain expertise. As a leader in the development and commercialization of new
pharmaceutical therapies, we can empower our therapeutic, scientific and domain experts with expansive levels of information
including product level tracking in 90 markets and information about treatments and outcomes on more than one billion non-identified
patients. By connecting this intelligence, we have the ability to optimize the clinical trial process and enable our clients to reduce costs
and get their products to market more quickly through more informed site selection, faster patient recruitment practices and virtual
trials. We transform Real World Evidence by linking prospective and retrospective approaches and introduce innovation such as
secondary control arms, which eliminate the need for a placebo group. We bring best in class SaaS platforms, purpose built for life
sciences, to our clients to help them run their clinical and commercial operations more efficiently.
Build upon our extensive client relationships and leverage our global presence. We have a diversified base of over 10,000
clients in over 100 countries and have expanded our client value proposition to address a broader market for research and development
and commercial operations which we estimate to be more than $260 billion in 2020. Through the combined offerings of research and
development and commercial services we built a platform that allows us to be a more complete partner to our clients.
Expand the penetration of our offerings to the broader healthcare marketplace. We believe that substantial opportunities
exist to use our existing technology and domain expertise to serve additional healthcare stakeholders (payers, providers, healthcare
professionals) to quantify and optimize cost of care delivery; provide registry technology to professional association and patient
communities and support healthcare providers with system implementation and platform migration.
Expand portfolio through strategic acquisitions. We have and expect to continue to acquire assets and businesses that
strengthen our value proposition to clients. We have developed an internal capability to source, evaluate and integrate acquisitions that
have created value for stockholders. As the global healthcare landscape evolves, we expect that there will be a growing number of
acquisition opportunities across the life sciences, payer and provider sectors. We expect to continue to invest in or explore
opportunities for strategic acquisitions to grow our platform and enhance our ability to provide more services to our clients.
Our Offerings
We offer hundreds of distinct services, applications, technology platforms and solutions to help our clients make critical
decisions and perform better. We have three operating segments: Technology & Analytics Solutions, Research & Development
Solutions and Contract Sales & Medical Solutions. Their offerings complement each other and can provide enhanced value to our
clients when delivered together, with each driving demand for the other.
Our Technology & Analytics Solutions offerings include:
Technology platforms. We provide an extensive range of cloud-based applications and associated implementation services.
Software as a Service (“SaaS”) solutions that support a wide range of clinical and commercial processes, including clinical trial design
and planning, site start-up, patient consent, site payments, content management, multi-channel marketing, real-world evidence
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generation, customer relationship management (“CRM”), performance management, incentive compensation, territory alignment,
roster management, call planning, compliance and safety reporting and master data management. These solutions are used by
healthcare companies to manage, optimize and execute their clinical and commercial strategies in an orchestrated manner while
addressing their regulatory obligations. Using proprietary algorithms, we combine our country-level data, healthcare expertise and
therapeutic knowledge in over 100 countries to create our Global Market Insight family of offerings such as MIDAS, Analytics Link
and Disease Insights, which provides a leading source of insight into international market dynamics and are used by most large
pharmaceutical companies.
Real World Solutions. We enable life sciences and provider customers to generate and disseminate evidence in a cost-
efficient manner which informs health care decision making and ultimately improves patients’ outcomes. Our use of a wide range of
privacy and security safeguards protect non-identified patient-level medical claims, prescriptions, electronic medical records,
genomics, patient reported outcome and social media data. Our scaled information networks include more than one billion non-
identified patients globally. We technology-enable these data flows by harmonizing them to common data models and loading them
onto our proprietary evidence platforms for secure access by our customers. We provide access to deep clinical data in Oncology, Rare
Disease, and other specialty areas. Our Natural Language Processing capabilities help us create structured data from unstructured
clinical notes. We help our global customers across payers, providers, governments, and biopharmaceutical companies to answer
critical questions about healthcare interventions related to safety, effectiveness, and value. We also bring together stakeholders across
healthcare to collaborate in efforts to develop new information sources, more effective reimbursement models, and better patient
outcomes.
Analytics and consulting services. We provide a broad set of strategic and implementation consulting services, including
advanced analytics and commercial processes outsourcing services to help the commercial operations of life sciences companies
successfully transform their commercial models, engage more effectively with the healthcare stakeholders and reduce their operating
costs. We also help our client’s R&D function to address strategic challenges in the drug development process. Our global teams
leverage local market knowledge, deep scientific and therapeutic area expertise and our global information resources to assist our
clients with R&D strategy, portfolio, brand and commercial strategy, as well as pricing and market access and launch excellence.
Information offerings. Our national offerings comprise unique services in over 100 countries that provide consistent country
level performance metrics related to sales of pharmaceutical products, prescribing trends, medical treatment and promotional activity
across multiple channels including retail, hospital and mail order. Our sub-national offerings comprise unique services in over 70
countries that provide a consistent measurement of sales or prescribing activity at the regional, zip code and individual prescriber level
(depending on regulation in the relevant country). Our widely used reference database that tracks over 22 million healthcare
professionals in over 100 countries, providing a comprehensive view of health care practitioners that is critical for the commercial
success of our clients’ marketing and sales initiatives.
Our Research & Development Solutions offerings include:
Project Management and Clinical Monitoring. Drawing upon our years of experience, our site databases, our site
relationships and our highly trained staff, our solutions and services enables the efficient conduct and coordination of multi-site clinical
trials (generally Phase II-IV). Our service offerings include protocol design, feasibility and operational planning, site start up, patient
recruitment and clinical site monitoring. By infusing technology into field-based monitoring, we are able to reduce data collection steps
and time.
Clinical Trial Support Services. Each clinical trial requires a number of concurrent services and data streams. We offer a
broad range of functional services and consultation to support clinical trials through specialized expertise that help clients efficiently
collect, analyze and report the quality data and evidence they need to gain regulatory approval.
Clinical Laboratory Services. We provide our clients globally scaled end-to-end clinical trial laboratory and research services
through our majority-owned joint venture with Quest Diagnostics Incorporated (“Quest”), which was formed on July 1, 2015. We offer
the full range of central laboratory, genomic, bioanalytical, ADME, discovery, vaccine and biomarker laboratory services along with
sample and consent tracking services supporting clinical trials offerings within the joint venture, which is referred to as Q2 Solutions.
Strategic Planning and Design. By bringing our data science capabilities to our strategic planning and design services, we
offer consultation services to improve decisions and performance including portfolio, program and protocol planning and design,
biomarker consultation, benefit-risk management, regulatory affairs, biostatistics, modeling and simulation, and personalized medicine.
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Virtual Trials. Utilizing our proprietary information assets and transformative technology, we bring trials directly to patients,
with the objective of increasing participation and improving cycle times. Combining this with purpose-built processes and industry-
leading clinical capabilities, we help clients reach diverse and difficult to recruit patient populations.
Our principal Contract Sales & Medical Solutions offerings include:
Health Care Provider Engagement Services. We partner with biopharmaceutical companies and other life sciences providers
(e.g., medical device companies) to develop and deploy tailored stakeholder engagement solutions, including contract sales and market
access professionals, which are focused on product sales and improving brand value at all stages of the product lifecycle from initial
market entry to brands nearing patent expiry.
Patient Engagement Services. Our nurse-based programs directly engage with patients to help improve their disease and
medication understanding through interventional and non-interventional support, while also providing assistance in navigating complex
reimbursement coverage issues. Our patient engagement services combine insight from clinical trials and social listening, behavioral
design, personal and innovative eHealth multichannel interactions across multiple sites (e.g., the physician’s office, hospital, pharmacy,
home), that act as an extension of the Health Care Provider prescribed treatment course which can lead to improved adherence and
better overall outcomes.
Medical Affairs Services. We provide a range of scientific strategy and medical affairs services to help biopharmaceutical
companies plan and transition from the clinical trial setting to commercialization. Beginning in the clinical trial stage, our services can
deploy educators to clinical trial sites to accelerate patient recruitment and improve retention, assist in translation of complex clinical
trial data into a compelling scientific platform and publication strategy, and, provide field medical teams to facilitate scientific
engagement with key opinion leaders and healthcare decision makers, before and after product approval.
Our Clients
Sales to companies in life sciences, including pharmaceutical companies, biotechnology companies, device and diagnostic
companies, and consumer health companies, account for the majority of our revenues. Nearly all of the top 100 global pharmaceutical
and biotechnology companies, measured by revenue, are clients, and many of these companies subscribe to reports and services in
many countries. Other clients include payers, government and regulatory agencies, providers, pharmaceutical distributors, and
pharmacies. Our client base is broad in scope and enables us to avoid dependence on any single client. No single client accounted for
10% or more of our total company revenues in 2020, 2019, or 2018. As of December 31, 2020 the largest client based on its percentage
of total company revenue contributed approximately 5%.
Our Competition
Our Technology & Analytics Solutions business competes with a broad and diverse set of businesses. While we believe no
competitor provides the combination of geographical reach and breadth of its services, we generally compete in the countries in which
we operate with other information, analytics, technology, services and consulting companies, as well as with the in-house capabilities of
our clients. Also, we compete with certain government agencies, private payers and other healthcare stakeholders that provide their data
directly to others. In addition to country- by-country competition, we have a number of regional and global competitors in the
marketplace as well. Our offerings compete with various firms, including Accenture, Aetion, Panalgo, Cognizant Technology Solutions,
Covance Inc., Deloitte, Evidera (now part of PPD), GfK, LexisNexis Risk Solutions, IBM, Infosys, Kantar Health (now part of Cerner
Corporation), McKinsey, Nielsen, OptumInsight, PAREXEL International Corporation, Press Ganey, RTI Health Solutions, PRA Health
Sciences, Tempus, Veeva, and ZS Associates. We also compete with a broad range of new entrants and start-ups that are looking to bring
new technologies and business models to healthcare information services and technology services.
The markets for Research & Development Solutions offerings are highly competitive, and we compete against traditional
clinical research organizations (“CROs”), the in-house research and development departments of biopharmaceutical companies,
universities, and teaching hospitals. Among the traditional CROs, there are several-hundred small, limited-service providers, several
medium-sized firms and only a few full-service companies with global capabilities. Our primary competitors include Covance Inc.,
ICON plc, PAREXEL International Corporation, Pharmaceutical Product Development, Inc., PRA Health Sciences, and Syneos
Health, among others.
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Our Contract Sales & Medical Solutions business competes against the in-house sales and marketing departments of
biopharmaceutical companies, other contract pharmaceutical sales and service organizations and consulting firms. Contract Sales &
Medical Solutions’ primary competitor in the United States is Syneos Health, Eversana and UDG Healthcare plc. Outside of the United
States, Contract Sales & Medical Solutions typically competes against single country or more regionally focused service providers, such
as UDG Healthcare plc, Syneos Health, EPS Corporation and CMIC HOLDINGS Co., Ltd.
Government Regulation
Many aspects of our businesses are regulated by federal and state laws, rules and regulations. Accordingly, we maintain a
robust compliance program aimed at ensuring we operate our business in compliance with all existing legal requirements material to
the operation of our businesses. There are, however, occasionally uncertainties involving the application of various legal requirements,
the violation of which could result in, among other things, fines or other sanctions. See Part I, Item 1A, "Risk Factors” for additional
detail.
Good Clinical Practice
Good Clinical Practice (“GCP”) regulations and guidelines are the industry standard for the conduct of clinical trials with
respect to maintaining the integrity of the data and safety of the research subjects. The United States Food and Drug Administration
(“FDA”), the European Medicines Agency (“EMA”), Japan’s Ministry of Health, Labour and Welfare and most other global regulatory
authorities expect that study results and data submitted to such authorities be based on clinical trials conducted in accordance with GCP
provisions. Records for clinical trials must be maintained for specified periods for inspection by the FDA and other regulators.
Regulation of Drugs, Biologics and Medical Devices
In the United States, pharmaceutical, biological and medical device products are subject to extensive regulation by the FDA.
The Federal Food, Drug, and Cosmetic Act (“FDC Act”), the Public Health Service Act (“PHS Act”), and other federal and state
statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping,
approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of
pharmaceutical, biological and medical device products. Failure to comply with applicable United States requirements may subject a
company to a variety of administrative or judicial sanctions, such as FDA refusal to approve a pending new drug application (“NDA”)
for a new drug, a biologics license application (“BLA”) for a new biological product pre-market approval (“PMA”) or clearance for a
new medical device, warning or untitled letters, clinical holds, product recalls, product seizures, total or partial suspension of
production or distribution, injunctions, fines, civil penalties, and criminal prosecution.
Regulation of Patient Information
Our information management services relate to the processing of information regarding patient diagnosis and treatment of
disease and are, therefore, subject to substantial governmental regulation. In addition, the confidentiality of patient-specific information
and the circumstances under which such patient-specific records may be released for inclusion in our databases or used in other aspects
of our business is heavily regulated. Federal, state and foreign governments are contemplating or have proposed or adopted additional
legislation governing the possession, use and dissemination of personal data, such as personal health information and personal financial
data, as well as security breach notification rules for loss or theft of such data. Additional legislation or regulation of this type might,
among other things, require us to implement additional security measures and processes or bring within the legislation or regulation de-
identified health or other data, each of which may require substantial expenditures or limit our ability to offer some of our services.
In particular, personal health information is recognized in many countries such as the United States, the European Union, or
EU, and several countries in Asia, as a special, sensitive category of personal information, subject to additional mandatory protections.
Violations of data protection regulations are subject to administrative penalties, civil money penalties and criminal prosecution,
including corporate fines and personal liability.
Regulation of Promotion, Marketing and Distribution of Pharmaceutical Products and Medical Devices
Certain of our services are subject to detailed and comprehensive regulation in each geographic market in which we operate.
Such regulation relates, among other things, to the distribution of drug samples, the marketing and promotion of approved products, the
qualifications of sales representatives and the use of healthcare professionals in sales functions.
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In the United States, certain of our services are subject to numerous federal and state laws pertaining to promotional activities
involving pharmaceutical products and medical devices. Certain of our services are subject to the FDA’s regulations against “off-label
promotion,” which require sales representatives to restrict promotion of the approved product they are detailing to the approved
labeling for the product. The Prescription Drug Marketing Act imposes licensing, personnel record keeping, packaging, labeling,
product handling and facility storage and security requirements. Other federal and state laws prohibit manufacturers, suppliers and
providers from offering, giving or receiving kickbacks or other remuneration in connection with ordering or recommending the
purchase or rental of healthcare items and services. The sale or distribution of pharmaceutical products and devices is also governed by
the United States Federal Trade Commission Act and state consumer protection laws. We are subject to similar regulations currently in
effect in the other countries where we offer Contract Sales & Medical Solutions.
We are also subject to various laws and regulations that may apply to certain drug and device promotional practices,
including, among others, various aspects of Medicare and federal healthcare programs. Violations of these laws and regulations may
result in criminal and/or civil penalties, including possibly as an “aider and abettor.”
Regulation of Laboratories
Our United States laboratories are subject to licensing and regulation under federal, state and local laws relating to hazard
communication and employee right-to-know regulations, and the safety and health of laboratory employees. Additionally, our United
States laboratories are subject to applicable federal and state laws and regulations and licensing requirements relating to the handling,
storage and disposal of hazardous waste, radioactive materials and laboratory specimens, including the regulations of the
Environmental Protection Agency, the Nuclear Regulatory Commission, the Department of Transportation, the National Fire
Protection Agency and the United States Drug Enforcement Administration (“DEA”). The use of controlled substances in testing for
drugs with a potential for abuse is regulated in the United States by the DEA and by similar regulatory bodies in other parts of the
world. Our United States laboratories using controlled substances for testing purposes are licensed by the DEA. The regulations of the
United States Department of Transportation, Public Health Service and Postal Service apply to the surface and air transportation of
laboratory specimens. Our laboratories also are subject to International Air Transport Association regulations, which govern
international shipments of laboratory specimens. Furthermore, when the materials are sent to a foreign country, the transportation of
such materials becomes subject to the laws, rules and regulations of such foreign country. Our laboratories outside the United States
are subject to applicable national laws governing matters such as licensing, the handling and disposal of medical specimens, genetic
material, hazardous waste and radioactive materials, as well as the health and safety of laboratory employees.
In addition to its comprehensive regulation of safety in the workplace, the United States Occupational Safety and Health
Administration has established extensive requirements relating to workplace safety for healthcare employers whose workers may be
exposed to blood-borne pathogens such as HIV and the hepatitis B virus. Although we believe that we are currently in compliance in
all material respects with such federal, state and local laws, failure to comply with such laws could subject us to denial of the right to
conduct business, fines, criminal penalties and other enforcement actions.
Further, laboratories that analyze human blood or other biological samples for the diagnosis and treatment of clinical trial
subjects must comply with Clinical Laboratory Improvement Amendments (“CLIA”), as well as requirements established by various
states. The failure to meet these requirements may result in civil penalties and suspension or revocation of the CLIA certification.
Our Intellectual Property
In addition to our proprietary data sets described above, we develop and use a number of proprietary methodologies,
analytics, systems, technologies and other intellectual property in the conduct of our business. We rely upon a combination of legal,
technical, and administrative safeguards to protect our proprietary and confidential information and trade secrets, and patent, copyright
and trademark laws to protect other intellectual property rights. We consider our trademark and related names, marks and logos to be of
material importance to our business, and we have registered or applied for registration for certain of these trademarks including IQVIA,
in the United States and other jurisdictions and aggressively seek to protect them. Trademarks and service marks generally may be
renewed indefinitely so long as they are in use and/or their registrations are properly maintained, and so long as they have not been
found to have become generic. The technology and other intellectual property rights owned and licensed by us are of importance to our
business, although our management believes that our business, as a whole, is not dependent upon any one intellectual property or group
of such properties.
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Human Capital
Overview. Our approximately 70,000 employees help us drive our business success and achieve our ambition to advance
human health. We are a diverse global team that shares a passion for collaboration and solving complex problems. Our workforce is
comprised of a wide variety of professionals, including clinicians, data scientists, epidemiologists, and more.
Our culture is one in which employees are encouraged to apply their insight, curiosity, and intellectual courage across
everything they do. The way we manage our people and the programs we offer our employees reflect our commitment to fostering this
culture of empowerment and engagement.
Each one of our employees provide value, no matter where they sit within the organization. We are committed to creating an
environment where all employees are respected and heard, where people from all backgrounds can contribute to and share in our growth,
and where opportunity and advancement is available to everyone.
Employee Engagement. In 2020, we completed our second company-wide employee survey since the Merger between
Quintiles and IMS Health in 2016. The survey provided a valuable opportunity to hear the perspectives of our workforce around the
world.
In 2020, responses increased for this survey, and 81% of respondents indicated a favorable view of the Company's employee
engagement, which was a 13 percentage point increase from our last company-wide employee survey in 2018, 4 points higher than the
Fortune 500 benchmark and 5 points higher than the broader survey benchmark. The survey results indicate the actions we have taken
over the past two years have had a positive impact. Other areas where we saw favorable scores were: Employees acquiring the
knowledge and skills needed to be effective in their jobs (84%); employees feeling part of a team (84%); and employees who would
recommend IQVIA as a great place to work (81%).
Protection and Support of our Employees During the COVID-19 Pandemic. As a company, we did our best to support our
employees, preserve employment and maintain base compensation throughout the year. We accepted that our financial performance
would be affected by the pandemic, but declined to make dramatic cuts that would impact the lives of our employees. We also launched
the IQVIA Cares program to provide over $1 million of financial assistance to approximately 2,200 employees facing financial hardship
resulting from the crisis. This program was entirely funded by our directors, senior leaders and other employees from around the world
voluntarily forgoing a portion of their pay for a period of time. We continued to build a strong supportive culture around values of
mutual respect and pride in the important work we do. This will endure far beyond the crisis.
The safety of employees, patients, healthcare professionals, customers and suppliers with whom we frequently interact was our
highest priority as COVID-19 spread across the globe. To limit exposure, we substantially restricted travel, supplied personal protective
equipment to field-based employees, closed facilities and asked most of our staff to work remotely. On short notice, we added bandwidth
and VPN capacity to our advanced infrastructure to enable 95% of our employees at the peak of the pandemic to work remotely and
avoid service disruptions. At the same time, we continued to maintain and enhance our cybersecurity protections, which included
completing the global roll-out of our core Endpoint Detection & Response solution to all workstations, thus protecting them from cyber
threats regardless of location and network status (on or off VPN), and accelerating the deployment of an Advance Response tool to
enable bulk remediation of vulnerabilities on remote workstations.
Diversity and Inclusion. Our commitment to diversity and inclusion is reflected in the various policies, programs, training and
support we offer, including our Employee Resource Groups, manager diversity and inclusion training and our highly diverse global
workforce.
Our global workforce operates in over 100 countries and represents approximately 80 different ethnicities. In the United States,
approximately 63% of our employees identify as white and approximately 37% and 11% identify as non-White and Black or African
American, respectively. Approximately 59% of our employees globally are female and approximately 51% of employees worldwide at a
manager level are female.
Our growing network of Employee Resource Groups (ERGs) provides a framework for employees to connect and collaborate
with colleagues with similar interests. These groups support our values and business goals and foster the diverse thinking required for
innovation. They provide a forum for the exchange of ideas and opportunities for mentoring and professional development.
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There are five global ERGs—all are employee-led, voluntary, and open to every employee. Each ERG has a mission that is
aligned to our vision, values, and core operating principles.
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•
•
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Black, Asian, and Minority Ethnic Network Group (BAME): connects employees to provide a sense of community to
support in the professional and personal development of Black, Asian and minority ethnic group employees across the
organization.
Emerging Professionals Group (EPG): fosters ambition and builds community among our leadership and talent pipeline for
emerging professionals through networking, personal development, and volunteerism.
Lesbian, Gay, Bisexual and Transgender (LGBT+) Group: supports the ability for all people at IQVIA to be their authentic
selves by fostering an inclusive, equal, and inspiring culture for LGBT+ employees.
Veterans Employee Resource Group (VERG): offers opportunities and support through the IQVIA community to its veteran
and active service members and family.
• Women Inspired Network (WIN): fosters a corporate culture that inspires women to excel in their careers at IQVIA and
within the biopharma industry.
In 2020, we grew our ERG membership to more than 2,500 participants worldwide, with multiple chapters being established
across the globe. In response to COVID-19, the ERGs quickly pivoted and moved much of their engagement efforts online, hosting
multiple virtual events and meet-ups to ensure the sense of community they provide to was not lost amid the pandemic.
Employee Well-being. Investing in resources and incentives to promote the personal well-being of our employees and their
families is an important way we take care of our people. As a digital healthcare company, we also use our own in-house technical
expertise to develop online tools to enable our employees to access resources quickly and seamlessly.
We provide a variety of health and welfare benefit plans that are available to employees and their family members, based on
their location and specific country regulations. Plans may include medical, dental, and vision coverage; telemedicine and on-site medical
care; critical illness coverage; disability, accidental death and dismemberment, pet and life insurance; tuition reimbursement; identity
theft protection; commuter benefits; matching gift programs; and locally relevant savings and retirement plans such as pensions and
401(k) plans.
We provide parental leave for all full-time employees for the birth or adoption of a child, with variability in leave time
dependent on location. We also provide paid leave for other life matters including sick time, bereavement, jury duty, military service,
and time off for voting, depending on country specific policies.
Beyond health and welfare benefits, many regions also offer employee wellness programs. In the United States, our “Healthy
You” wellness program offers employees a range of wellness benefits, including free flu shots, teledoc services, nutrition counseling,
tobacco cessation support and reimbursement for wellness-related expenses.
Our Employee Assistance Program (EAP) is available to approximately 70% of our workforce worldwide. Our EAP is a free
and voluntary program that offers confidential mental and emotional well-being support, including assessments, counseling, and follow-
up services. In 2020, employees were faced with new and difficult burdens as the COVID-19 pandemic upended nearly everyone’s life.
As the year unfolded, we saw an urgent need to address and assist all employees in helping them build resilience in response to the
ongoing pandemic. As a result, we accelerated our plans to roll out our EAP to the remainder of our workforce. This acceleration will
make support available to our entire global workforce in the second quarter of 2021 through a network of existing and new EAP
programs and programs included in local benefit packages. In addition, we are exploring a training program for all managers on how to
support team members who may be affected by the pandemic.
Compensation and Benefits. IQVIA compensation programs support our overall strategy by linking employee compensation
with both business and personal performance. This approach to compensation demonstrates our “pay for performance” philosophy, as
well as our focus on providing compensation program that attract, retain and motivate and reward employees. In addition to the benefits
described above, our compensation programs include base salaries, annual bonuses, and long-term incentive awards.
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Talent and Learning. Helping our people grow, develop, and reach their full potential is a key component of our management
approach. Nurturing talent is critical in a highly competitive industry, and it also keeps our employees motivated and engaged.
We invest in our employees’ development throughout their careers at IQVIA through our various talent and learning initiatives.
Our strategy is focused on supporting business growth, optimizing our offerings through enhanced digital tools, and building the future
leaders of IQVIA. At the same time, we are working to transform the employee experience and evolve our performance management
approach to be more responsive to our employees’ experiences. Mirroring our overall culture, our approach to talent and learning is
underpinned by the philosophy of empowerment, and we encourage all employees to take ownership of their careers.
We offer a suite of formal and informal learning opportunities, many which focus on business specific topics such as regulatory
compliance, technology, analytics, clinical and therapy areas, and more.
We want our employees to have meaningful careers, and we are committed to the idea that career development is a result of
growth through new experiences. To foster this growth, we engage employees on their purpose, strengths, and agility. We encourage
employees to remain curious and flexible towards their career, exploring opportunities across the organization. Employees take
ownership for their development in partnership with managers, mentors, and others. Similarly, performance management is driven by
ongoing conversations about priorities, contributions and development.
In 2020, we also introduced our Future Leaders Program, a robust training aimed to develop the next generation of leadership at
IQVIA. More than 60 attendees from 18 countries were chosen to take part in this four-month program. In light of COVID-19, we
rapidly adapted the program design to make it a fully virtual experience. Sessions consisted of live webinars co-led by senior executives,
peer coaching, projects, and skills assessments. Feedback was positive, and we will bring together two more cohorts in 2021, targeting
nearly 100 more participants from around the world.
Health and Safety. Ensuring the health and safety of our employees is essential, whether they work in our corporate offices or
labs. We strive to create a culture of safety so our employees can remain healthy and productive.
We incorporate environmental laws and regulations into our policies and procedures throughout our organization. At the
corporate level, we have group certifications to ISO 14001:2015 and ISO45001: 2018. In accordance with both certifications, we have a
robust, integrated Environmental, Health and Safety Management System (EHSMS) with supporting standard operating procedures in
place, which demonstrates our commitment to continuous improvement. Under our EHSMS, all employees must actively participate in
helping to maintain a safe, healthy, and secure work environment. Our Code of Conduct describes the obligations of employees to
maintain such an environment, follow all applicable safety and security rules and complete required training.
Q2 Solutions, our joint venture with Quest Diagnostics, operates laboratories in the United States, United Kingdom, Singapore,
India, Japan, and China. Q2 facilities are certified to ISO 14001:2015 and ISO45001: 2018. Depending on the location and services
provided accreditation also will include ISO 14001, CAP ISO 15189, ISO 9001, NGSP Level 1, ANVISA, ISO45001, CDC Lipids,
CLIA, MOH Certified Laboratory.
Available Information
Our website address is www.iqvia.com, and our investor relations website is located at http://ir.iqvia.com. Information on our
website is not incorporated by reference herein. Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and our Proxy Statements for our annual meetings of stockholders, and any amendments to those reports, as well
as Section 16 reports filed by our insiders, are available free of charge on our website as soon as reasonably practicable after we file the
reports with, or furnish the reports to, the Securities and Exchange Commission (“SEC”). In addition, the SEC maintains an Internet
site (http://www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC. Information on the SEC’s website does not constitute part of this report. Also posted on our website are
our certificate of incorporation and by-laws, the charters for our Audit Committee, Leadership Development and Compensation
Committee and Nominating and Governance Committee, our Corporate Governance Guidelines, and our Code of Conduct governing
our directors, officers and employees. Copies of our SEC reports and corporate governance information are available in print upon the
request of any stockholder to our Investor Relations Department. Within the time period required by the SEC and the New York Stock
Exchange (“NYSE”), we will post on our website any amendment to the Code of Conduct or any waiver of such policy applicable to
any of our senior financial officers, executive officers or directors.
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Item 1A. Risk Factors
RISK FACTORS
We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. You
should consider carefully the risks and uncertainties described below together with the other information included in this Annual
Report on Form 10-K, including our consolidated financial statements and related notes included elsewhere in this Annual Report on
Form 10-K, in evaluating our Company. The occurrence of any of the following risks may materially and adversely affect our business,
financial condition, results of operations and future prospects.
Summary of Risk Factors
Below is a summary of some of the principal risks that could adversely affect our business, operations and financial results:
Risks Relating to Our Business
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Our business and operations may be adversely affected by the COVID-19 pandemic.
The potential loss or delay of contracts could adversely affect our results.
Our financial results may be adversely affected if we underprice our contracts, overrun our cost estimates or fail to receive
approval for or experience delays in documenting change orders.
Failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our
competitiveness and harm our operating results.
If we are unsuccessful at investing in growth opportunities and are unable to develop and market new services or enter new
markets, our growth, results of operations or financial condition could be adversely affected.
If we are unable to successfully identify, acquire and integrate existing businesses, services and technologies, our business,
results of operations and financial condition could be adversely impacted.
If we are unable to attract suitable investigators and patients for our clinical trials, our clinical development business might
suffer.
If we lose the services of key personnel or are unable to recruit additional qualified personnel, our business could be adversely
affected.
Intellectual Property
• We depend on third parties for data and support services. Our suppliers or providers might restrict our use of or refuse to
license data or provide services, which could lead to our inability to access certain data or provide certain services and, as a
result, materially and adversely affect our operating results and financial condition.
Our success depends on our ability to protect our intellectual property rights.
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• We may be subject to claims by others that we are infringing on their intellectual property rights.
• We rely on licenses from third parties to certain technology and intellectual property rights for some of our services and the
licenses we currently have could terminate or expire.
IT systems and Information
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Security breaches and unauthorized use of our IT systems and information could expose us, our clients, our data suppliers or
others to risk of loss.
• We may experience challenges with the acquisition, development, enhancement or deployment of technology necessary for our
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business.
Our business depends on the continued effectiveness and availability of our information systems, including the information
systems we use to provide our services to our clients.
Data protection, privacy and similar laws restrict access, use and disclosure of personal information, and failure to comply with
these laws could materially harm our business.
Client Risks
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Consolidation in the industries in which our clients operate may reduce the volume of services purchased by consolidated
clients following an acquisition or merger.
• We may be adversely affected by client or therapeutic concentration.
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Our relationships with existing or potential clients who are in competition with each other may adversely impact the degree to
which other clients or potential clients use our services.
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There is a risk that we may initiate a clinical trial for a client, and then the client becomes unwilling or unable to fund the
completion of the clinical trial, and we may be ethically bound to complete or wind down the clinical trial at our own expense.
Market Forces
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Disruptions in the credit and capital markets and unfavorable general economic conditions could negatively affect our business,
results of operations and financial condition.
Our effective income tax rate may fluctuate for a variety of reasons.
Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting
bodies may adversely affect our financial statements.
Due to the global nature of our business we are subject to international economic, political and other risks that could negatively
affect our results of operations and financial condition.
Liability Exposure
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Our Research & Development Solutions business could subject us to potential liability.
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Our Contract Sales & Medical Solutions business could result in liability to us if a drug causes harm to a patient.
Our insurance may not cover all of our indemnification obligations and other liabilities associated with our operations.
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• We may make mistakes in conducting a clinical trial that could negatively impact the usefulness of the clinical trial which
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could subject us to significant costs or liability.
If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations,
we could be subject to significant costs or liability.
Risks Relating to Our Industry
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The biopharmaceutical services industry is highly competitive.
Outsourcing trends in the biopharmaceutical industry and changes in aggregate spending and research and development
budgets could adversely affect our operating results and growth rate.
• We may be affected by healthcare reform and potential additional reforms.
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Actions by government regulators or clients to limit a prescription’s scope or withdraw an approved drug from the market
could affect our business and result in a loss of revenues.
If we do not keep pace with rapid technological changes, our services may become less competitive or obsolete.
Laws restricting biopharmaceutical sales and marketing practices may adversely impact demand for our services.
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Risks Relating to Our Indebtedness
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Restrictions imposed in the Senior Secured Credit Facilities (as defined below) and other outstanding indebtedness, including
the indentures governing outstanding notes issued by our wholly owned subsidiary IQVIA Inc., may limit our ability to operate
our business and to finance our future operations or capital needs or to engage in other business activities.
Restrictive covenants in our other indebtedness may limit our flexibility in our current and future operations.
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Interest rate fluctuations and our ability to deduct interest expense may affect our results of operations and financial condition.
• We may be adversely affected by changes in the method of determining the London Interbank Offered Rate (“LIBOR”), or the
replacement of LIBOR with an alternative reference rate.
Risks Related to Ownership of Our Common Stock
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Provisions of the corporate governance documents of IQVIA could make an acquisition of IQVIA difficult and may prevent
attempts by its stockholders to replace or remove its management, even if beneficial to its stockholders.
Our operating results and share price may be volatile, which could cause the value of our stockholders’ investments to decline.
Our certificate of incorporation contains a provision renouncing any interest and expectancy in certain corporate opportunities
identified by certain parties.
For a more complete discussion of the material risk facing our business, see below.
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Risks Relating to Our Business
Our business and operations has been and may in the future be adversely affected by the novel coronavirus (COVID-19) pandemic.
The outbreak of the novel coronavirus, or COVID-19, and the various governmental, industry and consumer actions related
thereto, could have a material and adverse effect on our business, financial condition and results of operations. These effects, which
largely depend on future developments that cannot be accurately predicted and are uncertain, could include a negative impact on the
availability of our key personnel, temporary closures of our facilities or the facilities of our business partners, customers, suppliers,
third party service providers or other vendors, an increased risk of customer defaults or delays in payments or purchasing decisions,
and the interruption of domestic and global supply chains, distribution channels, liquidity and capital or financial markets.
As COVID-19 continues to spread, we have and may in the future experience disruptions that could severely impact our
business, including:
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closure or inaccessibility of clinical site locations;
delays or difficulties in enrolling patients in our clinical trials and starting new clinical trials;
delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical
site staff;
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or
recommended by federal or state governments, employers and others;
delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; and
significant disruption in our businesses that rely on face-to-face interactions or are dependent on in-person gatherings,
events or conferences.
In addition, we have directed a substantial portion of our workforce to work from home while the outbreak persists in order
to help minimize the risk of COVID-19 to our employees. Having a significant portion of our workforce working from home could
cause an increased risk of loss of productivity, greater cybersecurity risk, and increased risk to our system of internal controls over
financial reporting.
Further, the effects of the pandemic may also increase our cost of capital or make additional capital more difficult or
available only on terms less favorable to us.
The potential loss or delay of our large contracts or of multiple contracts could adversely affect our results.
Most of our Research & Development Solutions clients can terminate our contracts upon 30 to 90 days notice. Our clients
may delay, terminate or reduce the scope of our contracts for a variety of reasons beyond our control, including but not limited to:
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decisions to forego or terminate a particular clinical trial;
lack of available financing, budgetary limits or changing priorities;
actions by regulatory authorities;
production problems resulting in shortages of the drug being tested;
failure of products being tested to satisfy safety requirements or efficacy criteria;
unexpected or undesired clinical results for products;
insufficient patient enrollment in a clinical trial;
insufficient investigator recruitment;
shift of business to a competitor or internal resources;
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•
•
product withdrawal following market launch; or
shut down of manufacturing facilities.
The COVID-19 pandemic, or a similar global event, could also exacerbate many of the above situations and cause delays,
changes in scope or cancellation of our contracts. As a result, contract terminations, delays and alterations are a regular part of our
Research & Development Solutions business. In the event of termination, our contracts often provide for fees for winding down the
project, but these fees may not be sufficient for us to realize the full amount of revenues or profits anticipated under the related services
contracts, and termination may result in lower resource utilization rates. In addition, we will not realize the full benefits of our backlog
of contractually committed services if our clients cancel, delay or reduce their commitments under our contracts with them, which may
occur if, among other things, a client decides to shift its business to a competitor or revoke our status as a preferred provider. Thus, the
loss or delay of a large contract or the loss or delay of multiple contracts could adversely affect our revenues and profitability. We
believe the risk of loss or delay of multiple contracts potentially has greater effect where we are party to broader partnering
arrangements with global biopharmaceutical companies.
We depend on third parties for data and support services. Our suppliers or providers might restrict our use of or refuse to
license data or provide services, which could lead to our inability to access certain data or provide certain services and, as a result,
materially and adversely affect our operating results and financial condition.
Each of our Technology & Analytics Solutions information services is derived from data we collect from third parties. These
data suppliers are numerous and diverse, reflecting the broad scope of information that we collect and use in our business.
Although we typically enter into long-term contractual arrangements with many of these suppliers of data, at the time of entry
into a new contract or renewal of an existing contract, suppliers may increase restrictions on our use of such data, increase the price
they charge us for data or refuse altogether to license the data to us. In addition, during the term of any data supply contract, suppliers
may fail to adhere to our data quality control standards or fail to deliver data. Further, although no single individual data supplier is
material to our business, if a number of suppliers collectively representing a significant amount of data that we use for one or more of
our services were to impose additional contractual restrictions on our use of or access to data, fail to adhere to our quality-control
standards, repeatedly fail to deliver data or refuse to provide data, now or in the future, our ability to provide those services to our
clients could be materially adversely impacted, which may harm our operating results and financial condition.
Additionally, we depend on third parties for support services to our business. Such support services include, but are not
limited to, third- party transportation providers, suppliers of drugs for patients participating in clinical trials, suppliers of kits for use in
our clinical trial laboratories business, suppliers of reagents for use in our testing equipment and providers of maintenance contracts for
our equipment. The failure of any of these third parties to adequately provide the critical support services could have a material adverse
effect on our business.
If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical
considerations, we could be subject to significant costs or liability and our reputation could be harmed.
We contract with biopharmaceutical companies to perform a wide range of services to assist them in bringing new drugs to
market. Our services include monitoring clinical trials, data and laboratory analysis, electronic data capture, patient recruitment and
other related services, and we perform these services in a number of ways, including through physical and technology-enabled efforts.
Such services are complex and subject to contractual requirements, regulatory standards and ethical considerations. For example, we
must adhere to regulatory requirements such as the FDA and current GCP and Good Laboratory Practice requirements. If we fail to
perform our services in accordance with these requirements, regulatory agencies may take action against us for failure to comply with
applicable regulations governing clinical trials or sales and marketing practices. Such actions may include sanctions, such as
injunctions or failure of such regulatory authorities to grant marketing approval of products, delay, suspension or withdrawal of
approvals, license revocation, product seizures or recalls, operational restrictions, civil or criminal penalties or prosecutions, damages
or fines. Clients may also bring claims against us for breach of our contractual obligations and patients in the clinical trials and patients
taking drugs approved on the basis of those clinical trials may bring personal injury claims against us for negligence. Any such action
could have a material adverse effect on our results of operations, financial condition and reputation.
Such consequences could arise if, among other things, the following occur:
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Improper performance of our services. The performance of clinical development services is complex and time-consuming.
For example, we may make mistakes in conducting a clinical trial that could negatively impact or obviate the usefulness of the clinical
trial or cause the results of the clinical trial to be reported improperly. If the clinical trial results are compromised, we could be subject
to significant costs or liability, which could have an adverse impact on our ability to perform our services. As examples:
•
•
•
non-compliance generally could result in the termination of ongoing clinical trials or sales and marketing projects
or the disqualification of data for submission to regulatory authorities;
compromise of data from a particular clinical trial, such as failure to verify that informed consent was obtained
from patients, could require us to repeat the clinical trial under the terms of our contract at no further cost to our
client, but at a substantial cost to us; and
breach of a contractual term could result in liability for damages or termination of the contract.
Large clinical trials can cost up to hundreds of millions of dollars, and while we endeavor to contractually limit our exposure
to such risks, improper performance of our services could have an adverse effect on our financial condition, damage our reputation and
result in the cancellation of current contracts by or failure to obtain future contracts from the affected client or other clients.
Investigation of clients. From time to time, one or more of our clients are audited or investigated by regulatory authorities or
enforcement agencies with respect to regulatory compliance of their clinical trials, programs or the marketing and sale of their drugs. In
these situations, we have often provided services to our clients with respect to the clinical trials, programs or activities being audited or
investigated, and we are called upon to respond to requests for information by the authorities and agencies. There is a risk that either
our clients or regulatory authorities could claim that we performed our services improperly or that we are responsible for clinical trial
or program compliance. If our clients or regulatory authorities make such claims against us and prove them, we could be subject to
damages, fines or penalties. In addition, negative publicity regarding regulatory compliance of our clients’ clinical trials, programs or
drugs could have an adverse effect on our business and reputation.
Insufficient client funding to complete a clinical trial. As noted above, clinical trials can cost hundreds of millions of
dollars. There is a risk that we may initiate a clinical trial for a client, and then the client becomes unwilling or unable to fund the
completion of the clinical trial. In such a situation, notwithstanding the client’s ability or willingness to pay for or otherwise facilitate
the completion of the clinical trial, we may be ethically bound to complete or wind down the clinical trial at our own expense.
Security breaches and unauthorized use of our IT systems and information, or the IT systems or information in the
possession of our vendors, could expose us, our clients, our data suppliers or others to risk of loss.
We rely upon the security of our computer and communications systems infrastructure to protect us from cyberattacks and
unauthorized access. Cyberattacks can include malware, computer viruses, hacking or other significant disruption of our computer,
communications and related systems. Cyber threats are rapidly evolving and are becoming increasingly sophisticated. Despite our
efforts to ensure the integrity of our systems, as cyber threats evolve and become more difficult to detect and successfully defend
against, one or more cyber threats might defeat the measures that we or our vendors take to anticipate, detect, avoid or mitigate such
threats. Certain techniques used to obtain unauthorized access, introduce malicious software, disable or degrade service, or sabotage
systems may be designed to remain dormant until a triggering event and we may be unable to anticipate these techniques or implement
adequate preventative measures since techniques change frequently or are not recognized until launched, and because cyberattacks can
originate from a wide variety of sources. Although we take steps to manage and avoid these risks and to prevent their recurrence, our
preventive and remedial actions may not be successful. Such attacks, whether successful or unsuccessful, could result in our incurring
costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions,
paying damages or fines, or taking other remedial steps with respect to third parties. Publicity about vulnerabilities and attempted or
successful incursions could damage our reputation with clients and data suppliers and reduce demand for our services.
We also store proprietary and sensitive information in connection with our business, which could be compromised by a
cyberattack. To the extent that any disruption or security breach results in a loss or damage to our data, an inappropriate disclosure of
proprietary or sensitive information, an inability to access data sources, or an inability to process data or provide our offerings to our
clients, it could cause significant damage to our reputation, affect our relationships with our data suppliers and clients (including loss of
suppliers and clients), lead to claims against us and ultimately harm our business. We may be required to incur significant costs to
alleviate, remedy or protect against damage caused by these disruptions or security breaches in the future. We may also face inquiry or
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increased scrutiny from government agencies as a result of any such disruption or breach. While we have insurance coverage for
certain instances of a cyber security breach, our coverage may not be sufficient if we suffer a significant attack or multiple attacks. Any
such breach or disruption could have a material adverse effect on our operating results and our reputation as a service provider.
Some of our vendors have significant responsibility for the security of certain of our data centers and computer-based
platforms or software-as-a-service (SaaS) applications upon which our businesses rely to host or process data or to perform
various functions. Also, our data suppliers have responsibility for security of their own computer and communications
environments. These third parties face risks relating to cyber security similar to ours, which could disrupt their businesses and
therefore materially impact ours. Accordingly, we are subject to any flaw in or breaches to their computer and communications
systems or those that they operate for us, which could result in a material adverse effect on our business, operations and
financial results.
Failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our
competitiveness and harm our operating results.
We are pursuing business transformation initiatives to update technology, increase innovation and obtain operating
efficiencies. As part of these initiatives, which include accelerating site start-up timelines and improving our customer buying
experience, we seek to improve our productivity, flexibility, quality, functionality and cost savings by investing in the development and
implementation of global platforms and integration of our business processes and functions to achieve economies of scale. These
various initiatives may not yield their intended gains, or be completed in timely manner, which may impact our competitiveness and
our ability to meet our growth objectives and, as a result, materially and adversely affect our business, operating results and financial
condition.
If we are unsuccessful at investing in growth opportunities, our business could be materially and adversely affected.
We continue to invest significantly in growth opportunities, including the development and acquisition of new data,
technologies and services to meet our clients’ needs. For example, we are expanding our services and technology offerings, such as the
development of a cloud-based platform with a growing number of applications to support commercial and clinical operations for life
sciences companies (e.g., multi-channel marketing, marketing campaign management, customer relationship management, incentive
compensation management, targeting and segmentation, performance management, site engagement payments, trial master file, risk
based monitoring, clinical trial management and decentralized trials and other applications). We also continue to invest significantly in
growth opportunities in emerging markets, such as the development, launch and enhancement of services in China, India, Russia,
Turkey, and other countries. We consider our presence in these markets to be an important component of our growth strategy.
There is no assurance that our investment plans or growth strategy will be successful or will produce a sufficient or any return
on our investments. Further, if we are unable to develop new technologies and services, clients do not purchase our new technologies
and services, our new technologies and services do not work as intended or there are delays in the availability or adoption of our new
technologies and services, then we may not be able to grow our business or growth may occur slower than anticipated. Additionally,
although we expect continued growth in healthcare spending in emerging markets, such spending may occur more slowly or not at all,
and we may not benefit from our investments in these markets.
We plan to fund growth opportunities with cash from operations or from future financings. There can be no assurance that
those sources will be available in sufficient amounts to fund future growth opportunities when needed.
Any of the foregoing could have a material and adverse effect on our operating results and financial condition.
Data protection, privacy and similar laws in the United States and around the world restrict access, use and disclosure of
personal information, and failure to comply with or adapt to changes in these laws could materially and adversely harm our
business.
The confidentiality, collection, use, retention, security, transfer and disclosure of personal data, including individually
identifiable health information and clinical trial patient-specific information, are subject to governmental regulation generally in the
country that the personal data were collected or used (collectively, "Privacy Laws"). For example, United States federal regulations
under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) create specific requirements for the protection of the
privacy and security of individual health information. These provisions apply to both “covered entities” (primarily health care
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providers and health insurers) and their “business associates” or service providers. As there are some instances where we are a HIPAA
“business associate” of a “covered entity,” we can be directly liable for mishandling protected health information. Under HIPAA’s
enforcement scheme, we can be subject to significant penalties in connection with HIPAA violations, along with the potential for
significant other expenditures related to these activities. These rules require individuals’ written authorization in many situations, in
addition to any required informed consent, before protected health information may be used for research. We are both directly and
indirectly affected by the privacy provisions surrounding individual authorizations because many investigators with whom we are
involved in clinical trials are directly subject to them as a HIPAA “covered entity” and because we obtain identifiable health
information from third parties that are subject to such regulations.
In general, patient health information is among the most sensitive (and highly regulated) of personal information. Privacy Laws
in the United States and around the world are designed to ensure that information about an individual’s healthcare is properly protected
from inappropriate access, use and disclosure. Privacy Laws also include the European Union’s (“EU”) General Data Protection
Regulation, Canada’s Personal Information Protection and Electronic Documents Act and other data protection, privacy, data security,
data localization and similar national, state/provincial and local laws. In the EU, personal data includes any information that relates to an
identifiable natural person. Health information about an identifiable person carries additional obligations under EU law, including
obtaining the explicit consent from the individual for collection, use or disclosure of the information. In addition, we are subject to EU
rules with respect to cross-border transfers of such data out of the EU (along with similar data transfer requirements or data localization
requirements in other countries).
We have established frameworks, models, processes and technologies to manage privacy and security for many data types,
from a variety of sources, and under a myriad of Privacy Laws. In addition, we rely on our data suppliers to deliver information to us in
a form and in a manner that complies with applicable Privacy Laws. These laws are complex and there is no assurance that the
safeguards and controls employed by us or our data suppliers will be sufficient to prevent a breach of these laws, or that claims will not
be filed against us or our data suppliers despite such safeguards and controls. Failure to comply with such laws, certain certification/
registration and annual re-certification/registration provisions associated with these data protection and privacy regulations, and similar
rules in various jurisdictions, or to resolve any serious privacy complaints, may result in, among other things, regulatory sanctions,
criminal prosecution, civil liability, negative publicity, damage to our reputation, or data being blocked from use or liability under
contractual provisions. For example, in July 2015, indictments were issued by the Seoul Central District Prosecutors’ Office in South
Korea against IMS Korea and two of its employees, among others, alleging improper handling of sensitive health information in
violation of applicable privacy laws. See Item 3 “Legal Proceedings” for additional information.
Laws and expectations relating to privacy continue to evolve, and we continue to adapt to changing needs. For example, the
definition of “personally identifiable information” and “personal data” continues to evolve and broaden and many new laws and
regulations are being enacted. In addition, certain established programs have been (or are at risk of being) declared invalid (such as the
EU-U.S. Privacy Shield framework that operated for several years but was struck down by the European Court of Justice in July,
2020), so that this area remains in a state of flux. Changes to these programs may adversely impact our ability to provide services to
our clients or develop new products or services. Federal, state and foreign governments are contemplating or have proposed or adopted
new Privacy Laws or modifications to existing Privacy Laws, including by amendment, replacement or interpretation through judicial
or administrative decisions. New or modified Privacy Laws might, among other things, require us to implement new security
measures and processes or bring within the scope of the Privacy Law other data not currently regulated, each of which may require
substantial expenditures or limit our ability to offer some of our services. Additionally, changes in Privacy Laws may limit our data
access, use and disclosure, and may require increased expenditures by us or may dictate that we not offer certain types of services. Any
of the foregoing may have a material adverse impact on our ability to provide services to our clients or maintain our profitability.
There is ongoing concern from privacy advocates, regulators and others regarding data protection and privacy issues, and the
number of jurisdictions with Privacy Laws has been increasing. Also, there are ongoing public policy discussions regarding whether
the standards for de-identified, anonymous or pseudonymized health information are sufficient, and the risk of re-identification
sufficiently small, to adequately protect patient privacy. These discussions may lead to further restrictions on the use of such
information. There can be no assurance that these initiatives or future initiatives will not adversely affect our ability to access and use
data or to develop or market current or future services.
Many Privacy Laws protect more than patient information, and although they vary by jurisdiction, these laws can extend to
employee information, business contact information, provider information and other information relating to identifiable individuals.
Failure to comply with these laws may result in, among other things, civil and criminal liability, negative publicity, damage to our
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reputation and liability under contractual provisions. In addition, compliance with such laws may require increased costs to us or may
dictate that we not offer certain types of services.
The occurrence of any of the foregoing could impact our ability to provide the same level of service to our clients, require us
to modify our offerings or increase our costs, which could materially and adversely affect our operating results and financial condition.
Our success depends on our ability to protect our intellectual property rights.
Our success depends, in part, upon our ability to develop, use and protect our proprietary methodologies, analytics, systems,
technologies and other intellectual property. We rely upon a combination of trade secrets, confidentiality policies, nondisclosure,
invention assignment and other contractual arrangements, and patent, copyright and trademark laws, to protect our intellectual property
rights. These laws are subject to change at any time and certain agreements may not be fully enforceable, which could further restrict
our ability to protect our innovations. Further, these laws may not provide adequate protection for our intellectual property, particularly
in countries in which the legal system provides less protection for intellectual property rights. Our intellectual property rights may not
prevent competitors from independently developing services similar to or duplicative of ours. Further, the steps we take in this regard
might not be adequate to prevent or deter infringement or other misappropriation of our intellectual property by competitors, former
employees or other third parties, and we might not be able to detect unauthorized use of, or take appropriate and timely steps to
enforce, our intellectual property rights.
Our ability to obtain, protect and enforce our intellectual property rights is subject to general litigation or third-party
opposition risks, as well as the uncertainty as to the scope of protection, registrability, patentability, validity and enforceability of our
intellectual property rights in each applicable country. Governments may adopt regulations, and government agencies or courts may
render decisions, requiring compulsory licensing of intellectual property rights. When we seek to enforce our intellectual property
rights, we may be subject to claims that the intellectual property rights are invalid or unenforceable. Litigation may be necessary in the
future to enforce our intellectual property rights and to protect our confidential and proprietary information. Litigation brought to
protect and enforce our intellectual property rights could be costly, time consuming and distracting to management and could result in
the impairment or loss of portions of our intellectual property rights. Furthermore, our efforts to enforce our intellectual property rights
may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of
our management’s attention and resources, could delay further sales or the implementation of our solutions, impair the functionality of
our solutions, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our solutions, or
injure our reputation and harm our operating results and financial condition.
The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the
differentiation of our services and harm our business; the value of our investment in development or business acquisitions could be
reduced; and third parties might make claims against us related to losses of their confidential or proprietary information. In addition,
we may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. Third parties that license our
proprietary rights also may take actions that diminish the value of our proprietary rights or reputation. The protection of our intellectual
property may require the expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our
intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary
rights. These incidents and claims could harm our business, reduce revenue, increase expenses and harm our reputation.
We may be subject to claims by others that we are infringing on their intellectual property rights.
Third parties may assert claims that we or our clients infringe their intellectual property rights and these claims, with or
without merit, could be expensive to litigate, cause us to incur substantial costs and divert management resources and attention in
defending the claim. In some jurisdictions, plaintiffs can also seek injunctive relief that may limit the operation of our business or
prevent the marketing and selling of our services that infringe on the plaintiff’s intellectual property rights. To resolve these claims, we
may enter into licensing agreements with restrictive terms or significant fees, stop selling, be required to implement costly redesigns to
the affected services, or pay damages to satisfy contractual obligations to others. If we do not resolve these claims in advance of a trial,
there is no guarantee that we will be successful in court. These outcomes may have a material adverse impact on our business,
operating results and financial condition.
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In addition, certain contracts with our suppliers or clients contain provisions whereby we indemnify, subject to certain
limitations, the counterparty for damages suffered as a result of claims related to intellectual property infringement and the use of data.
Claims made under these provisions could be expensive to litigate and could result in significant payments.
We rely on licenses from third parties to certain technology and intellectual property rights for some of our services and
the licenses we currently have could terminate or expire.
Some of our business services rely on technology or intellectual property rights owned and controlled by others. Our licenses
to this technology or these intellectual property rights could be terminated or could expire. We may be unable to replace these licenses
in a timely manner. Failure to renew these licenses, or renewals of these licenses on less advantageous terms, could harm our operating
results and financial condition.
Our financial results may be adversely affected if we underprice our contracts, overrun our cost estimates or fail to
receive approval for or experience delays in documenting change orders.
Most of our Research & Development Solutions contracts are either fee for service contracts or fixed-fee contracts. Our past
financial results have been, and our future financial results may be, adversely impacted if we initially underprice our contracts or
otherwise overrun our cost estimates and are unable to successfully negotiate a change order. Change orders typically occur when the
scope of work we perform needs to be modified from that originally contemplated by our contract with the client. Modifications can
occur, for example, when there is a change in a key clinical trial assumption or parameter or a significant change in timing. Where we
are not successful in converting out-of-scope work into change orders under our current contracts, we bear the cost of the additional
work. Such underpricing, significant cost overruns or delay in documentation of change orders could have a material adverse effect on
our business, results of operations, financial condition or cash flows.
The relationship of backlog to revenues varies over time.
Backlog represents future revenues for our Research & Development Solutions business from work not yet completed or
performed under signed binding commitments and signed contracts. Once work begins on a project, revenue is recognized over the
duration of the project. Projects may be terminated or delayed by the client or delayed by regulatory authorities for reasons beyond our
control. To the extent projects are delayed, the timing of our revenue could be affected. In the event that a client cancels a contract, we
typically would be entitled to receive payment for all services performed up to the cancellation date and subsequent client-authorized
services related to terminating the canceled project. Typically, however, we have no contractual right to the full amount of the revenue
reflected in our backlog in the event of a contract cancellation. The duration of the projects included in our backlog, and the related
revenue recognition, range from a few weeks to many years. Our backlog may not be indicative of our future revenues from our
Research & Development Solutions business, and we may not realize all the anticipated future revenue reflected in our backlog. A
number of factors may affect backlog, including:
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•
•
•
the size, complexity and duration of the projects;
the percentage of full services versus functional services;
the cancellation or delay of projects; and
change in the scope of work during the course of a project.
Although an increase in backlog will generally result in an increase in revenues to be recognized over time (depending on the
level of cancellations), an increase in backlog at a particular point in time does not necessarily correspond directly to an increase in
revenues during a particular period. The extent to which contracts in backlog will result in revenue depends on many factors, including
but not limited to delivery against projected schedules, the need for scope changes (change orders), contract cancellations and the
nature, duration, size, complexity and phase of the contracts, each of which factors can vary significantly from time to time.
The rate at which our backlog converts to revenue may vary over time for a variety of reasons. The revenue recognition on
larger, more global projects could be slower than on smaller, less global projects for a variety of reasons, including but not limited to
an extended period of negotiation between the time the project is awarded to us and the actual execution of the contract, as well as an
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increased timeframe for obtaining the necessary regulatory approvals. Additionally, the increased complexity of the drug development
pipeline and the need to enroll precise patient populations could extend the length of clinical trials causing revenue to be recognized
over a longer period of time. Further, delayed projects will remain in backlog, unless otherwise canceled by the client, and will not
generate revenue at the rate originally expected. Thus, the relationship of backlog to realized revenues may vary over time.
Our business depends on the continued effectiveness and availability of our information systems, including the
information systems we use to provide our services to our clients, and failures of these systems may materially limit our operations.
Due to the global nature of our business and our reliance on information systems to provide our services, we intend to
increase our use of web-enabled and other integrated information systems in delivering our services. We also provide access to similar
information systems to certain of our clients in connection with the services we provide them. As the breadth and complexity of our
information systems continue to grow, we will increasingly be exposed to the risks inherent in the development, integration and
ongoing operation of evolving information systems, including:
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•
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disruption, impairment or failure of data centers, telecommunications facilities or other key infrastructure platforms;
security breaches of, cyberattacks on and other failures or malfunctions in our critical application systems or their
associated hardware; and
excessive costs, excessive delays or other deficiencies in systems development and deployment.
The materialization of any of these risks may impede the processing of data, the delivery of databases and services, and the
day-to-day management of our business and could result in the corruption, loss or unauthorized disclosure of proprietary, confidential
or other data. While we have disaster recovery plans in place, they might not adequately protect us in the event of a system failure.
While many of our operations have disaster recovery plans in place, we currently do not have excess or standby computer processing
or network capacity everywhere in the world to avoid disruption in the receipt, processing and delivery of data in the event of a system
failure. Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer
viruses, break-ins and similar events at our various computer facilities could result in interruptions in the flow of data to our servers
and from our servers to our clients. Corruption or loss of data may result in the need to repeat a clinical trial at no cost to the client, but
at significant cost to us, the termination of a contract or damage to our reputation.
In addition, any failure by our computer environment to provide sufficient processing or network capacity to transfer data
could result in interruptions in our service. In the event of a delay in the delivery of data, we could be required to transfer our data
collection operations to an alternative provider of server hosting services. Such a transfer could result in significant delays in our ability
to deliver services to our clients and increase our costs. Additionally, significant delays in system enhancements or inadequate
performance of new or upgraded systems once completed could damage our reputation and harm our business. Finally, long-term
disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of
terrorism, particularly involving cities in which we have offices, could adversely affect our businesses. Although we carry property and
business interruption insurance, our coverage might not be adequate to compensate us for all losses that may occur.
We have continued to undertake significant programs to optimize business processes with respect to our services. Our
inability to effectively manage the implementation and adapt to new processes designed into new or upgraded systems in a timely and
cost-effective manner may result in disruption to our business and negatively affect our operations.
We have entered into agreements with certain vendors to provide systems development and integration services that develop
or license to us the IT platform for programs to optimize our business processes. If such vendors fail to perform as required or if there
are substantial delays in developing, implementing and updating the IT platform, our client delivery may be impaired, and we may
have to make substantial further investments, internally or with third parties, to achieve our objectives. Additionally, our progress may
be limited by parties with existing or claimed patents who seek to enjoin us from using preferred technology or seek license payments
from us. Meeting our objectives is dependent on a number of factors which may not take place as we anticipate, including obtaining
adequate technology-enabled services, creating IT-enabled services that our clients will find desirable and implementing our business
model with respect to these services. Also, increased IT-related expenditures may negatively impact our profitability.
We may experience challenges with the acquisition, development, enhancement or deployment of technology necessary
for our business.
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We operate in businesses that require sophisticated computer systems and software for data collection, data processing, cloud-
based platforms, analytics, cryptography, statistical projections and forecasting, mobile computing, social media analytics and other
applications and technologies, particularly in our Technology & Analytics Solutions and Research & Development Solutions
businesses. We seek to address our technology risks by increasing our reliance on the use of innovations by cross-industry technology
leaders and adapt these for our biopharmaceutical and healthcare industry clients. Some of these technologies supporting the industries
we serve are changing rapidly and we must continue to adapt to these changes in a timely and effective manner at an acceptable cost.
We also must continue to deliver data to our clients in forms that are easy to use while simultaneously providing clear answers to
complex questions. There can be no guarantee that we will be able to develop, acquire or integrate new technologies, that these new
technologies will meet our needs or those of our clients’ needs or achieve expected investment goals, or that we will be able to do so as
quickly or cost-effectively as our competitors. Significant technological change could render certain of our services obsolete.
Moreover, the introduction of new services embodying new technologies could render certain of our existing services obsolete. Our
continued success will depend on our ability to adapt to changing technologies, manage and process ever-increasing amounts of data
and information and improve the performance, features and reliability of our services in response to changing client and industry
demands. We may experience difficulties that could delay or prevent the successful design, development, testing, introduction or
marketing of our services. New services, or enhancements to existing services, may not adequately meet our own requirements or those
of current and prospective clients or achieve any degree of significant market acceptance. These types of failures could have a material
adverse effect on our operating results, financial condition and reputation.
Consolidation in the industries in which our clients operate may reduce the volume of services purchased by consolidated
clients following an acquisition or merger, which could materially harm our operating results and financial condition.
Mergers or consolidations among our clients have in the past and could in the future reduce the number of our clients and
potential clients. When companies consolidate, overlapping services previously purchased separately are usually purchased only once
by the combined entity, leading to loss of revenue. Other services that were previously purchased by one of the merged or consolidated
entities may be deemed unnecessary or cancelled. If our clients merge with or are acquired by other entities that are not our clients, or
that use fewer of our services, they may discontinue or reduce their use of our services. There can be no assurance as to the degree to
which we may be able to address the revenue impact of such consolidation. Any of these developments could materially harm our
operating results and financial condition.
We may be adversely affected by client or therapeutic concentration.
Although we did not have any client that represented 10% or more of our revenues in 2020, 2019 and 2018, we derive the
majority of our revenues from a number of large clients. If any large client decreases or terminates its relationship with us, our
business, results of operations or financial condition could be materially adversely affected.
Additionally, conducting multiple clinical trials for different clients in a single therapeutic class involving drugs with the
same or similar chemical action has in the past and may in the future adversely affect our business if some or all of the clinical trials are
canceled because of new scientific information or regulatory judgments that affect the drugs as a class or if industry consolidation
results in the rationalization of drug development pipelines. Similarly, marketing and selling drugs for different biopharmaceutical
companies with similar chemical actions subjects us to risk if new scientific information or regulatory judgment prejudices the drugs as
a class, which may lead to compelled or voluntary prescription limitations or withdrawal of some or all of such drugs from the market.
Our business is subject to international economic, political and other risks that could negatively affect our results of
operations and financial condition.
We have significant operations in countries that may require complex arrangements to deliver services throughout the world
for our clients. Additionally, we have established operations in locations remote from our most developed business centers. As a result,
we are subject to heightened risks inherent in conducting business internationally, including the following:
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required compliance with a variety of local laws and regulations which may be materially different than those to
which we are subject in the United States or which may change unexpectedly; for example, conducting a single
clinical trial across multiple countries is complex, and issues in one country, such as a failure to comply with local
regulations or restrictions, may affect the progress of the clinical trial in the other countries, for example, by
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limiting the amount of data necessary for a clinical trial to proceed, resulting in delays or potential cancellation of
contracts, which in turn may result in loss of revenue;
the United States or foreign countries could enact legislation or impose regulations or other restrictions, including
unfavorable labor regulations, tax policies or economic sanctions, which could have an adverse effect on our ability
to conduct business in or expatriate profits from the countries in which we operate, including hiring, retaining and
overseeing qualified management personnel for managing operations in multiple countries, differing employment
practices and labor issues, and tax-related risks, including the imposition of taxes and the lack of beneficial treaties,
that result in a higher effective tax rate for us;
foreign countries are expanding or may expand their regulatory framework with respect to patient informed
consent, protection and compensation in clinical trials, which could delay or inhibit our ability to conduct clinical
trials in such jurisdictions;
the regulatory or judicial authorities of foreign countries may not enforce legal rights and recognize business
procedures in a manner in which we are accustomed or would reasonably expect;
local, economic, political and social conditions, including potential hyperinflationary conditions, political
instability, and potential nationalization, repatriation, expropriation, price controls or other restrictive government
actions, including changes in political and economic conditions may lead to changes in the business environment in
which we operate, as well as changes in foreign currency exchange rates;
immigration laws are subject to legislative change and varying standards of application and enforcement due to
political forces, economic conditions or other events (including proposals in the U.S. to change limitations on
temporary and permanent workers), and local immigration laws may require us to meet certain other legal
requirements as a condition to obtaining or maintaining entry visas, which may impact our ability to provide
services to our clients;
potential violations of local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act
(“FCPA”), and the UK Bribery Act, may cause difficulty in managing foreign operations, as well as significant
consequences to us if those laws are violated;
regulatory changes and economic conditions following the UK’s exit from the EU (“Brexit”), including
uncertainties as to its effect on trade laws, tariffs, instability and volatility in the global financial and currency
markets, conflicting or redundant regulatory regimes in Europe and political stability;
clients in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables
in foreign jurisdictions; and
natural disasters, pandemics such as the COVID-19 (coronavirus), or international conflict, including terrorist acts,
could interrupt our services, endanger our personnel, lower patient visits and increase patient drop-out rates, cause
delays in recruitment of new patients, decrease the productivity of our clinical research associates, cause other
project delays or loss of clinical trial materials or results.
These risks and uncertainties could negatively impact our ability to, among other things, perform large, global projects for our
clients. Furthermore, our ability to deal with these issues could be affected by applicable United States laws and the need to protect our
assets. Any such risks could have an adverse impact on our financial condition and results of operations.
Exchange rate fluctuations may affect our results of operations and financial condition.
Because a large portion of our revenues and expenses are denominated in currencies other than the United States dollar and
our financial statements are reported in United States dollars, changes in foreign currency exchange rates could significantly affect our
results of operations and financial condition. Exchange rate fluctuations between local currencies and the United States dollar create
risk in several ways, including:
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Foreign Currency Translation Risk. The revenue and expenses of our foreign operations are generally
denominated in local currencies and translated into United States dollars for financial reporting purposes.
Accordingly, exchange rate fluctuations will affect the translation of foreign results into United States dollars for
purposes of reporting our consolidated results.
Foreign Currency Transaction Risk. We are 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. We earn
revenue from our service contracts over a period of several months and, in some cases, over several years.
Accordingly, exchange rate fluctuations during this period may affect our profitability with respect to such
contracts.
We may limit these risks through exchange rate fluctuation provisions stated in our service contracts, or we may hedge our
transaction risk with foreign currency exchange contracts or options. We have not, however, hedged all of our foreign currency
transaction risk, and we may experience fluctuations in financial results from our operations outside the United States and foreign
currency transaction risk associated with our service contracts.
Due to the global nature of our business, we may be exposed to liabilities under anti-corruption laws, including the
United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act and various international anti-corruption laws, and
any allegation or determination that we violated these laws could have a material adverse effect on our business.
We are required to comply with the FCPA, the UK Bribery Act and other international anti-corruption laws, which prohibit
companies from engaging in bribery including corruptly or improperly offering, promising, or providing money or anything else of
value to non-United States officials and certain other recipients. In addition, the FCPA imposes certain books, records, and accounting
control obligations on public companies and other issuers. We operate in parts of the world in which corruption can be common and
compliance with anti-bribery laws may conflict with local customs and practices. Our global operations face the risk of unauthorized
payments or offers being made by employees, consultants, sales agents, and other business partners outside of our control or without
our authorization. It is our policy to implement safeguards to prohibit these practices by our employees and business partners with
respect to our operations. However, irrespective of these safeguards, or as a result of monitoring compliance with such safeguards, it is
possible that we or certain other parties may discover or receive information at some point that certain employees, consultants, sales
agents, or other business partners may have engaged in corrupt conduct for which we might be held responsible. Violations of the
FCPA, the UK Bribery Act or other international anti-corruption laws may result in restatements of, or irregularities in, our financial
statements as well as severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our
business, operating results and financial condition. In some cases, companies that violate the FCPA may be debarred by the United
States government and/or lose their United States export privileges. Changes in anti-corruption laws or enforcement priorities could
also result in increased compliance requirements and related costs which could adversely affect our business, financial condition and
results of operations. In addition, the United States or other governments may seek to hold us liable for successor liability FCPA
violations or violations of other anti-corruption laws committed by companies in which we invest or that we acquired or will acquire.
We face risks related to sales to government entities.
We derive a portion of our revenue from sales to government entities in the United States. In general, our contracts with
United States government entities are terminable at will by the government entity at any time. Government demand and payment for
our services may be affected by public-sector budgetary cycles and funding authorizations, including government shutdowns.
Government contracts are subject to oversight, including special rules on accounting, expenses, reviews and security. Failure to comply
with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines and suspensions, or
debarment from future business with the United States government. As a result, failure to comply with these rules could have an
adverse effect on our future business, reputation, operating results and financial condition.
If we are unable to successfully develop and market new services or enter new markets, our growth, results of operations
or financial condition could be adversely affected.
A key element of our growth strategy is the successful development and marketing of new services or entering new markets
that complement or expand our existing business. As we develop new services or enter new markets, including services targeted at
participants in the broader healthcare industry, we may not have or adequately build the competencies necessary to perform such
services satisfactorily, may not receive market acceptance for such services or may face increased competition. If we are unable to
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succeed in developing new services, entering new markets or attracting a client base for our new services or in new markets, we will be
unable to implement this element of our growth strategy, and our future business, reputation, results of operations and financial
condition could be adversely affected.
Our Research & Development Solutions business could subject us to potential liability that may adversely affect our
results of operations and financial condition.
Our Research & Development Solutions business involves the testing of new drugs on patients in clinical trials and, if
marketing approval is granted, the availability of these drugs to be prescribed to patients. Our involvement in the clinical trials and
development process creates a risk of liability for personal injury to or death of patients, particularly those with life-threatening
illnesses, resulting from adverse reactions to the drugs administered during testing or after product launch, respectively. For example,
we have from time to time been sued and may be sued in the future by individuals alleging personal injury due to their participation in
clinical trials and seeking damages from us under a variety of legal theories. Although we maintain the types and amounts of insurance
we view as customary in the industries and countries in which we operate, if we are required to pay damages or incur defense costs in
connection with any personal injury claim that is outside the scope of indemnification agreements we have with our clients, if any
indemnification agreement is not performed in accordance with its terms or if our liability exceeds the amount of any applicable
indemnification limits or available insurance coverage, our financial condition, results of operations and reputation could be materially
and adversely affected. We maintain professional liability insurance, including liability for completed operations coverage. In the
future, we may not be able to get adequate insurance for these types of risks at reasonable rates.
We also contract with physicians to serve as investigators in conducting clinical trials. If the investigators commit errors or
make omissions during a clinical trial that result in harm to clinical trial patients or after a clinical trial to a patient using the drug after
it has received regulatory approval, claims for personal injury or liability damages may result. Additionally, if the investigators engage
in fraudulent behavior, clinical trial data may be compromised, which may require us to repeat the clinical trial or subject us to liability.
We do not believe we are legally responsible for the medical care rendered by such third-party investigators, and we would vigorously
defend any claims brought against us. However, it is possible we could be found liable for claims with respect to the actions of third-
party investigators, which may adversely affect our financial condition, results of operations and reputation.
Some of our services involve direct interaction with clinical trial subjects or volunteers and subcontracting into a network
of Phase I clinical facilities, which could create potential liability that may adversely affect our results of operations, financial
condition and reputation.
We subcontract into a network of facilities where Phase I clinical trials are conducted, which ordinarily involve testing an
investigational drug on a limited number of healthy individuals, typically 20 to 80 persons, to determine such drug’s basic safety.
Failure to operate such a facility in accordance with applicable regulations could result in that facility being shut down, which could
disrupt our operations. Additionally, we face risks associated with adverse events resulting from the administration of such drugs to
healthy volunteers and the professional malpractice of medical care providers. Any professional malpractice or negligence by such
investigators, nurses or other subcontracted employees could potentially result in liability to us in the event of personal injury to or
death of a healthy volunteer in clinical trials, and could also cause us reputational harm. This liability, particularly if it were to exceed
the limits of any indemnification agreements and insurance coverage we may have, may adversely affect our financial condition,
results of operations and reputation.
Our Contract Sales & Medical Solutions business could result in liability to us if a drug causes harm to a patient. While
we are generally indemnified and insured against such risks, we may still suffer financial losses.
When we market drugs under contract for a biopharmaceutical company, we could suffer liability for harm allegedly caused
by those drugs, either as a result of a lawsuit against the biopharmaceutical company to which we are joined, a lawsuit naming us or
any of our subsidiaries or an action launched by a regulatory body. While we are generally indemnified by the biopharmaceutical
company for the action of the drugs we market on its behalf, and we carry insurance to cover harm caused by our negligence in
performing services, it is possible that we could nonetheless incur financial losses, regulatory penalties or both. In particular, any claim
could result in potential liability for us if the claim is outside the scope of the indemnification agreement we have with the
biopharmaceutical company, the biopharmaceutical company does not abide by the indemnification agreement as required or the
liability exceeds the amount of any applicable indemnification limits or available insurance coverage. Such a finding could have an
adverse impact on our financial condition, results of operations and reputation. Furthermore, negative publicity associated with harm
caused by drugs we helped to market could have an adverse effect on our business and reputation.
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Our insurance may not cover all of our indemnification obligations and other liabilities associated with our operations.
We maintain insurance designed to provide coverage for ordinary risks associated with our operations and our ordinary
indemnification obligations. The coverage provided by such insurance may not be adequate for all claims we may make or may be
contested by our insurance carriers. If our insurance is not adequate or available to pay liabilities associated with our operations, or if
we are unable to purchase adequate insurance at reasonable rates in the future, our profitability may be adversely impacted.
If we are unable to attract suitable investigators and patients for our clinical trials, our clinical development business might
suffer.
The timely recruitment of investigators and patients for clinical trials is essential to our Research & Development Solutions
business. Investigators are typically located at hospitals, clinics or other sites and supervise the administration of the investigational
drug to patients during the course of a clinical trial. Patients generally include people from the communities in which the clinical trials
are conducted. Our clinical development business could be adversely affected if we are unable to attract suitable and willing
investigators or patients for clinical trials on a consistent basis. For example, if we are unable to engage investigators to conduct
clinical trials as planned or enroll sufficient patients in clinical trials, we might need to expend additional funds to obtain access to
resources or else be compelled to delay or modify the clinical trial plans, which may result in additional costs to us.
If we lose the services of key personnel or are unable to recruit additional qualified personnel, our business could be
adversely affected.
Our success substantially depends on the collective performance, contributions and expertise of our personnel including
senior management and key personnel, qualified professional, scientific and technical operating staff and qualified sales representatives
for our contract sales services. There is significant and increasing competition for qualified personnel, particularly those with higher
educational degrees, such as a medical degree, a Ph.D. or an equivalent degree, or relevant experience in the industry and in the
locations in which we operate. In addition, the departure of our key employees, or our inability to continue to identify, attract and retain
qualified personnel or replace any departed personnel in a timely fashion, may impact our ability to grow our business and compete
effectively in our industry and may negatively affect our ability to meet financial and operational goals.
Disruptions in the credit and capital markets and unfavorable general economic conditions could negatively affect our
business, results of operations and financial condition.
Disruptions in the credit and capital markets could have negative effects on our business that may be difficult to predict or
anticipate, including the ability of our clients, vendors, contractors and financing sources to meet their contractual obligations.
Although we are unable to quantify the impact it has had on us, we are aware of a limited number of instances in our Research &
Development Solutions business during the past several years where cancellations, changes in scope and failure to pay timely were
attributable, at least in part, to difficulty in our clients’ ability to obtain financing. In the future such actions by our clients could, if they
involve a significant amount of business with us, have a material adverse effect on our results of operations.
Our effective income tax rate may fluctuate for a variety of reasons, which may adversely affect our operations, earnings
and earnings per share.
Our effective income tax rate is influenced by our projected profitability in the various taxing jurisdictions in which we
operate. Changes in a jurisdiction’s income tax rates and the distribution of our profits and losses among such jurisdictions may have a
significant impact on our effective income tax rate, which in turn could have an adverse effect on our net income and earnings per
share. Other factors that may affect our effective income tax rate include, but are not limited to:
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changes in the value of deferred tax assets and liabilities;
changes in tax laws in various jurisdictions;
audits by taxing authorities; and
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the establishment of valuation allowances against deferred income tax assets if we determined that it is more likely
than not that future income tax benefits will not be realized.
In addition, our effective income tax rate is influenced by U.S. tax law which has been substantially modified by the Tax
Cuts and Jobs Act enacted in 2017 (“Tax Act”). Currently, regulations regarding Global Intangible Low-Taxed Income (“GILTI”) and
the use of Foreign Tax Credits have been issued in proposed form, and if the application of these provisions are modified to change the
interpretation to us it could have an adverse impact on our effective income tax rate. In the course of our business, there are many
transactions and calculations where the ultimate tax determination is uncertain which may require the use of estimates and significant
judgement to account for their impact on the effective income tax rate in our consolidated financial statements. As the regulations and
guidance evolve with respect to the Tax Act, our results may differ from previous estimates and may materially affect our consolidated
financial statements.
All of these items described above may cause fluctuations in our effective income tax rate through increased U.S. tax liability
and/or the loss of tax attributes in any given year that could adversely affect our results of operations and impact our earnings and
earnings per share. Additional information regarding our income taxes is presented in Note 16 to our audited consolidated financial
statements included in this Annual Report on Form 10-K.
Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-
setting bodies may adversely affect our financial statements.
We are required to prepare our financial statements in accordance with generally accepted accounting principles in the United
States of America (“GAAP”), which is periodically revised and/or expanded. From time to time, we are required to adopt new or
revised accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that future
accounting standards we are required to adopt, such as amended guidance for income taxes, may require additional changes to the
current accounting treatment that we apply to our financial statements and may require us to make significant changes to our reporting
systems. Such changes could result in a material adverse impact on our results of operations and financial condition.
Our relationships with existing or potential clients who are in competition with each other may adversely impact the
degree to which other clients or potential clients use our services, which may adversely affect our results of operations.
The biopharmaceutical industry is highly competitive, with biopharmaceutical companies each seeking to persuade payers,
providers and patients that their drug therapies are better and more cost-effective than competing therapies marketed or being
developed by competing firms. In addition to the adverse competitive interests that biopharmaceutical companies have with each other,
biopharmaceutical companies also have adverse interests with respect to drug selection and reimbursement with other participants in
the healthcare industry, including payers and providers. Biopharmaceutical companies also compete to be first to market with new drug
therapies. We regularly provide services to biopharmaceutical companies who compete with each other, and we sometimes provide
services or funding to such clients regarding competing drugs in development. Our existing or future relationships with our
biopharmaceutical clients may therefore deter other biopharmaceutical clients from using our services or may result in our clients
seeking to place limits on our ability to serve other biopharmaceutical industry participants in connection with drug development
activities. In addition, our further expansion into the broader healthcare market may adversely impact our relationships with
biopharmaceutical clients, and such clients may elect not to use our services, reduce the scope of services that we provide to them or
seek to place restrictions on our ability to serve clients in the broader healthcare market with interests that are adverse to theirs. A loss
of clients or reductions in the level of revenues from a client could have a material adverse effect on our results of operations, business
and prospects.
If we are unable to successfully identify, acquire and integrate existing businesses, services and technologies, our
business, results of operations and financial condition could be adversely impacted.
We anticipate that a portion of our future growth may come from acquiring existing businesses, services or technologies. The
success of any acquisition will depend upon, among other things, our ability to effectively integrate acquired personnel, operations,
services and technologies into our business and to retain the key personnel and clients of our acquired businesses. In addition, we may
be unable to identify suitable acquisition opportunities or obtain any necessary financing on commercially acceptable terms. We may
also spend time and money investigating and negotiating with potential acquisition targets but not complete the transaction. Any future
acquisition could involve other risks, including, among others, the assumption of additional liabilities and expenses, difficulties and
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expenses in connection with integrating the acquired companies and achieving the expected benefits, issuances of potentially dilutive
securities or interest-bearing debt, loss of key employees of the acquired companies, transaction costs, diversion of management’s
attention from other business concerns and, with respect to the acquisition of foreign companies, the inability to overcome differences
in foreign business practices, language and customs. Our failure to identify potential acquisitions, complete targeted acquisitions and
integrate completed acquisitions could have a material adverse effect on our business, financial condition and results of operations.
Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets.
We assess the realizability of our indefinite-lived intangible assets and goodwill annually and conduct an interim evaluation
whenever events or changes in circumstances, such as operating losses or a significant decline in earnings associated with the acquired
business or asset, indicate that these assets may be impaired. Our ability to realize the value of the goodwill and indefinite-lived
intangible assets will depend on the future cash flows of the businesses we have acquired, which in turn could depend in part on how
well we have integrated these businesses into our own business. If we are not able to realize the value of the goodwill and indefinite-
lived intangible assets, we may be required to incur material charges relating to the impairment of those assets. Such impairment
charges could materially and adversely affect our operating results and financial condition.
We face risks arising from the restructuring of our operations.
From time to time, we have adopted restructuring plans to improve our operating efficiency through various means such as
reduction of overcapacity, elimination of non-billable support roles or other realignment of resources. Restructuring presents
significant potential risks of events occurring that could adversely affect us, including:
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actual or perceived disruption of service or reduction in service standards to clients;
the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve
conflicts that may arise;
loss of sales as we reduce or eliminate staffing on non-core services;
diversion of management attention from ongoing business activities; and
the failure to maintain employee morale and retain key employees.
Further, any such restructuring would result in charges that, if material, could harm our results of operations and significantly
reduce our cash position or increase debt. In addition, we may incur certain unforeseen costs once any restructuring activities are
implemented. Further, if we determine to effect any restructuring, we can give no assurance that any projected cost reductions resulting
from such restructuring activities will be achieved within the expected timeframe, or at all.
Because of these and other factors, we cannot predict whether we will realize the purpose and anticipated benefits of these
measures and, if we do not, our business and results of operations may be adversely affected.
Additionally, there may be delays in implementing the restructuring activities or a failure to achieve the anticipated levels of
cost savings and efficiency as a result of the restructuring activities, each of which could materially and adversely impact our business
and results of operations. Further restructuring or reorganization activities may also be required in the future beyond what is currently
planned, which could further enhance the risks associated with these activities.
Risks Relating to Our Industry
The biopharmaceutical services industry is highly competitive.
The biopharmaceutical services industry is highly competitive. Our business often competes with other biopharmaceutical
services companies, internal discovery departments, development departments, sales and marketing departments, information
technology departments and other departments within our clients, some of which could be considered large biopharmaceutical services
companies in their own right with greater resources than ours. We also compete with universities, teaching hospitals, governments
agencies and others. If we do not compete successfully, our business will suffer. The biopharmaceutical services industry is highly
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fragmented, with numerous smaller specialized companies and a handful of companies with global capabilities similar to certain of our
own capabilities. Increased competition has led to price and other forms of competition, such as acceptance of less favorable contract
terms, that could adversely affect our operating results. There are few barriers to entry for companies considering offering any one or
more of the services we offer. Because of their size and focus, these companies might compete effectively against us, which could have
a material adverse impact on our business.
Our future growth and success will depend on our ability to successfully compete with other companies that provide similar
services in the same markets, some of which may have financial, marketing, technical and other advantages. We also expect that
competition will continue to increase as a result of consolidation among these various companies. Large technology companies with
substantial resources, technical expertise and greater brand power could also decide to enter or further expand in the markets where our
business operates and compete with us. If one or more of our competitors or potential competitors were to merge or partner with
another of our competitors, or if a new entrant emerged with substantial resources, the change in the competitive landscape could
adversely affect our ability to compete effectively. We compete on the basis of various factors, including breadth and depth of services,
reputation, reliability, quality, geographic coverage, innovation, security, price and industry expertise and experience. In addition, our
ability to compete successfully may be impacted by the growing availability of health information from social media, government
health information systems and other free or low-cost sources. Consolidation or integration of wholesalers, retail pharmacies, health
networks, payers or other healthcare stakeholders may lead any of them to provide information services directly to clients or indirectly
through a designated service provider, resulting in increased competition from firms that may have lower costs to market (e.g., no data
supply costs). Any of the above may result in lower demand for our services, which could result in a material adverse impact on our
operating results and financial condition.
Outsourcing trends in the biopharmaceutical industry and changes in aggregate spending and research and development
budgets could adversely affect our operating results and growth rate.
Economic factors and industry trends that affect biopharmaceutical companies affect our Research & Development Solutions
business. Biopharmaceutical companies continue to seek long-term strategic collaborations with global clinical research organizations
with favorable pricing terms. Competition for these collaborations is intense and we may decide to forego an opportunity or we may
not be selected, in which case a competitor may enter into the collaboration and our business with the client, if any, may be limited. In
addition, if the biopharmaceutical industry reduces its Research & Development Solutions activities or reduces its outsourcing of
clinical trials and sales and marketing projects or such outsourcing fails to grow at projected rates, our operations and financial
condition could be materially and adversely affected. We may also be negatively impacted by consolidation and other factors in the
biopharmaceutical industry, which may slow decision making by our clients or result in the delay or cancellation of clinical trials. Our
commercial services may be affected by reductions in new drug launches and increases in the number of drugs losing patent protection.
All of these events could adversely affect our business, results of operations or financial condition.
Our business may be materially and adversely impacted by factors affecting the biopharmaceutical and healthcare
industries.
The vast majority of our revenue is generated from sales to the biopharmaceutical and healthcare industries. The clients we
serve in these industries are commonly subject to financial pressures, including, but not limited to, increased costs, reduced demand for
their products, reductions in pricing and reimbursement for products and services, formulary approval and placement, government
approval to market their products and limits on the manner by which they market their products, loss of patent exclusivity (whether due
to patent expiration or as a result of a successful legal challenge) and the proliferation of or changes to regulations applicable to these
industries. To the extent our clients face such pressures, or they change how they utilize our offerings, the demand for our services, or
the prices our clients are willing to pay for those services, may decline. Any such decline could have a material adverse effect on our
business, operating results and financial condition.
We may be affected by healthcare reform and potential additional reforms.
The United States Congress continues to consider healthcare reform legislation and impose health industry cost containment
measures, which may significantly impact the biopharmaceutical industry. In addition, numerous government bodies are considering or
have adopted various healthcare reforms and may undertake, or are in the process of undertaking, efforts to control growing healthcare
costs through legislation, regulation and voluntary agreements with medical care providers and biopharmaceutical companies. We are
uncertain as to the effects of these recent reforms on our business and are unable to predict what legislative proposals, if any, will be
adopted in the future. If regulatory cost containment efforts limit the profitability of new drugs, our clients may reduce their research
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and development spending or promotional, marketing and sales expenditures, which could reduce the business they outsource to us.
Similarly, if regulatory requirements are relaxed or simplified drug approval procedures are adopted, the demand for our services could
decrease.
Foreign and domestic government bodies may also adopt healthcare legislation or regulations that are more burdensome than
existing regulations. For example, product safety concerns and recommendations by the Drug Safety Oversight Board could change the
regulatory environment for drug products, and new or heightened regulatory and licensing requirements may increase our expenses or
limit or delay our ability to offer some of our services. Additionally, new or heightened regulatory requirements may have a negative
impact on the ability of our clients to conduct industry-sponsored clinical trials, which could reduce the need for our services.
Actions by government regulators or clients to limit a prescription’s scope or withdraw an approved drug from the market
could adversely affect our business and result in a loss of revenues.
Government regulators have the authority, after approving a drug, to regulate or limit its scope of prescription or withdraw it
from the market completely based on safety concerns. Similarly, clients may act to voluntarily limit the scope of prescription of drugs
or withdraw them from the market. In the past, we have provided services with respect to drugs that have been limited and/or
withdrawn. If we are providing services to clients for drugs that are limited or withdrawn, we may be required to narrow the scope of
or terminate our services with respect to such drugs, which would prevent earning the full amount of revenues anticipated under the
related service contracts with negative impacts to our financial results.
If we do not keep pace with rapid technological changes, our services may become less competitive or obsolete.
The biopharmaceutical industry is subject to rapid technological changes. Our current competitors or other businesses might
develop technologies or services that are more effective or commercially attractive than, or render obsolete, our current or future
technologies and services. If our competitors introduce superior technologies or services, including in the provision of clinical services,
and if we cannot make enhancements to remain competitive, our competitive position would be harmed. If we are unable to compete
successfully, we may lose clients or be unable to attract new clients, which could lead to a decrease in our revenue and financial
condition.
Laws restricting biopharmaceutical sales and marketing practices may adversely impact demand for our services.
There have been a significant number of laws, legislative initiatives and regulatory actions over the years that seek to limit
biopharmaceutical sales and marketing practices. For example, three states in 2006 and 2007 passed laws restricting the use of
prescriber identifiable information for the purpose of promoting branded prescription medicines. Although these laws were
subsequently declared to be unconstitutional based on a decision of the U.S. Supreme Court in Sorrell v. IMS Health in 2011, we are
unable to predict whether, and in what form, other initiatives may be introduced or actions taken at the state or Federal levels to limit
biopharmaceutical sales and marketing practices. In addition, while we will continue to seek to adapt our services to comply with the
requirements of these laws (to the extent applicable to our services), if enacted, there can be no assurance that our efforts to adapt our
offerings will be successful and provide the same financial contribution to us. There can also be no assurance that future legislative
initiatives will not adversely affect our ability to develop or market current or future offerings, or that any future laws will not diminish
the demand for our services, all of which could, over time, result in a material adverse impact on our operating results and financial
condition.
Our Research & Development Solutions clients face intense competition from lower cost generic products, which may
lower the amount that they spend on our services.
Our Research & Development Solutions clients face increasing competition from lower cost generic products, which in turn
may affect their ability to pursue research and development activities with us. In the United States, EU and Japan, political pressure to
reduce spending on prescription drugs has led to legislation and other measures which encourages the use of generic products. In
addition, proposals emerge from time to time in the United States and other countries for legislation to further encourage the early and
rapid approval of generic drugs. Loss of patent protection for a product typically is followed promptly by generic substitutes, reducing
our clients’ sales of that product and their overall profitability. Availability of generic substitutes for our clients’ drugs may adversely
affect their results of operations and cash flow, which in turn may mean that they would not have surplus capital to invest in research
and development and drug commercialization, including in our services. If competition from generic products impacts our clients’
34
finances such that they decide to curtail our services, our revenues may decline and this could have a material adverse effect on our
business.
Risks Relating to Our Indebtedness
Restrictions imposed in the Senior Secured Credit Facilities (as defined below) and other outstanding indebtedness,
including the indentures governing outstanding notes issued by our wholly owned subsidiary IQVIA Inc., may limit our ability to
operate our business and to finance our future operations or capital needs or to engage in other business activities.
The terms of the Senior Secured Credit Facilities restrict IQVIA and its restricted subsidiaries from engaging in specified
types of transactions. These covenants restrict the ability of IQVIA and its restricted subsidiaries, among other things, to:
•
•
•
•
•
•
•
•
•
•
•
•
incur liens;
make investments and loans;
incur indebtedness or guarantees;
issue preferred stock of a restricted subsidiary;
issue disqualified equity;
engage in mergers, acquisitions and asset sales;
declare dividends, make payments or redeem or repurchase equity interests;
alter the business IQVIA and its restricted subsidiaries conduct;
make restricted payments;
enter into agreements limiting restricted subsidiary distributions;
prepay, redeem or purchase certain indebtedness; and
engage in certain transactions with affiliates.
In addition, the revolving credit facility and the term A and B loans under the Credit Agreement (as defined below) require
IQVIA to comply with a quarterly maximum senior secured net leverage ratio test and minimum interest coverage ratio test. IQVIA’s
ability to comply with these financial covenants can be affected by events beyond our control, and IQVIA may not be able to satisfy
them. Additionally, the restrictions contained in the indentures governing the outstanding notes could also limit our ability to plan for
or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans.
A breach of any of these covenants could result in a default under the Senior Secured Credit Facilities or the indentures
governing the outstanding notes, which could trigger acceleration of our indebtedness and may result in the acceleration of or default
under any other debt to which a cross-acceleration or cross-default provision applies, which could have a material adverse effect on our
business, operations and financial results. In the event of any default under the Senior Secured Credit Facilities, the applicable lenders
could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together with accrued and unpaid
interest and any fees and other obligations, to be due and payable. In addition, or in the alternative, the applicable lenders could
exercise their rights under the security documents entered into in connection with the Senior Secured Credit Facilities. IQVIA and the
other subsidiary guarantors have pledged substantially all of their tangible and intangible assets (subject to customary exceptions) as
collateral under the Senior Secured Credit Facilities, including the stock and the assets of certain of our current and future wholly
owned United States subsidiaries and a portion of the stock of certain of our non-United States subsidiaries.
If we were unable to repay or otherwise refinance these borrowings and loans when due, the applicable lenders could proceed
against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation. In the event the
35
applicable lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that
indebtedness. Any acceleration of amounts due under the Credit Agreement governing the Senior Secured Credit Facilities or the
exercise by the applicable lenders of their rights under the security documents would likely have a material adverse effect on us.
Despite our level of indebtedness, we are able to incur more debt and undertake additional obligations. Incurring such
debt or undertaking such additional obligations could further exacerbate the risks to our financial condition.
Although the Credit Agreement, which governs the Senior Secured Credit Facilities of our wholly owned subsidiary through
which we conduct our operations, IQVIA Inc., contains restrictions on the incurrence of additional indebtedness, these restrictions are
subject to a number of qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could increase.
In addition, the receivables financing facility for one of our consolidated subsidiaries, a bankruptcy-remote special purpose entity (the
“SPE”) limits borrowing based on the amount of receivables purchased by the SPE from certain of our other subsidiaries, but when
supported by the value of such purchased receivables, the debt under our receivables financing facility can increase.
While the Credit Agreement also contains restrictions on our and our restricted subsidiaries’ ability to make loans and
investments, these restrictions are subject to a number of qualifications and exceptions, and the investments incurred in compliance
with these restrictions could be substantial.
Restrictive covenants in our other indebtedness may limit our flexibility in our current and future operations, particularly
our ability to respond to changes in our business or to pursue our business strategies.
The terms contained in certain of our indebtedness, including credit facilities and any future indebtedness of ours, may
include a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our and
our restricted subsidiaries’ ability to take actions that we believe may be in our interest. These agreements, among other things, limit
our ability to:
•
•
•
•
•
•
•
•
•
•
•
•
incur additional debt;
provide guarantees in respect of obligations of other persons;
issue redeemable stock and preferred stock;
pay dividends or distributions or redeem or repurchase capital stock;
prepay, redeem or repurchase debt;
make loans, investments and capital expenditures;
enter into transactions with affiliates;
create or incur liens;
make distributions from our subsidiaries;
sell assets and capital stock of our subsidiaries;
make acquisitions; and
consolidate or merge with or into, or sell substantially all of our assets to, another person.
A breach of the covenants or restrictions under the agreements governing our other indebtedness could result in a default
under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration
of any other debt to which a cross-acceleration or cross-default provision applies. In the event our lenders and noteholders accelerate
the repayment of our borrowings, we cannot assure that we and our subsidiaries would have sufficient assets to repay such
indebtedness.
36
Our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of
future financing.
Interest rate fluctuations and our ability to deduct interest expense may affect our results of operations and financial
condition.
Because we have variable rate debt, fluctuations in interest rates affect our business. We attempt to minimize interest rate risk
and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate caps and swaps.
We have entered into interest rate caps and swaps with financial institutions that have reset dates and critical terms that match those of
our senior secured term loan credit facility. Accordingly, any change in market value associated with the interest rate caps and swaps is
offset by the opposite market impact on the related debt. Because we do not attempt to hedge all of our variable rate debt, we may incur
higher interest costs for the portion of our variable rate debt which is not hedged.
In addition, the deduction for our interest expense may be limited, which could have an adverse impact on our taxes and net
income.
We may be adversely affected by changes in the method of determining the London Interbank Offered Rate (“LIBOR”), or
the replacement of LIBOR with an alternative reference rate, for our variable rate loans, derivative contracts and other financial
assets and liabilities.
The interest rates under our credit facilities and related interest rate swaps may be impacted by the expected discontinuation
of LIBOR. LIBOR is used as a reference rate to calculate interest rates under our credit facilities. In 2017, the United Kingdom's
Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if
LIBOR will cease to exist at that time or if new methods of calculating LIBOR will be established such that it continues to exist after
2021. The banking industry alongside regulators have taken steps to introduce alternative reference rates to LIBOR particularly in the
US, the UK and Switzerland. Whether or not alternative reference rates attain market traction as a LIBOR replacement tool remains in
question. If LIBOR ceases to exist or another indexed rate gains wide market acceptance as the successor to LIBOR, our lenders will
select a replacement index that will be applied under our credit facilities and related interest rate swaps, and certain of the interest rates
under our credit facilities may change. The new rates may not be as favorable to us as those in effect prior to any LIBOR phase-out.
Risks Relating to Ownership of Our Common Stock
Provisions of the corporate governance documents of IQVIA could make an acquisition of IQVIA difficult and may
prevent attempts by its stockholders to replace or remove its management, even if beneficial to its stockholders.
Our certificate of incorporation and Delaware bylaws and the General Corporation Law of Delaware (the “DGCL”) contain
provisions that could make it difficult for a third party to acquire IQVIA even if doing so might be beneficial to its stockholders,
including:
•
•
•
•
•
•
the division of the board of directors into three classes and the election of each class for three-year terms;
the sole ability of the board of directors to fill a vacancy created by the death or resignation of a director or the
expansion of the board of directors;
advance notice requirements for stockholder proposals and director nominations;
limitations on the ability of stockholders to call special meetings and to take action by written consent;
the approval of holders of at least seventy-five percent (75%) of the outstanding shares of IQVIA entitled to vote on
any amendment, alteration, change, addition or repeal of the Delaware bylaws is required to amend, alter, change,
add to or repeal the Delaware bylaws;
the required approval of holders of at least seventy-five percent (75%) of the outstanding shares of IQVIA to
remove directors, which removal may only be for cause; and
37
•
the ability of the board of directors to issue new series of, and designate the terms of, preferred stock, without
stockholder approval, which could be used to, among other things, institute a rights plan that would have the effect
of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have
not been approved by the board of directors.
In addition, IQVIA is subject to Section 203 of the DGCL regulating corporate takeovers. Section 203, subject to certain
exceptions, prohibits a Delaware corporation from engaging in any “business combination” with any “interested stockholder” for a
period of three years following the date that such stockholder became an interested stockholder unless:
•
•
•
prior to such date, the board of directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding those shares owned by persons who are directors and also officers, and
employee stock plans in which employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer; or
on or subsequent to such date, the business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds
of the outstanding voting stock that is not owned by the interested stockholder.
In general, Section 203 defines “business combination” to include mergers or consolidations between a Delaware corporation
and an interested stockholder, transactions with an interested stockholder involving the assets or stock of the corporation or its
majority-owned subsidiaries and transactions which increase an interested stockholder’s percentage ownership of stock. In general,
Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting
stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. These provisions
may frustrate or prevent any attempts by stockholders to replace members of the board of directors. Because IQVIA’s board is
responsible for appointing the members of management, these provisions could in turn affect any attempt to replace current members
of management. As a result, stockholders of IQVIA may lose their ability to sell their stock for a price in excess of the prevailing
market price due to these protective measures, and efforts by stockholders to change the direction or management of IQVIA may be
unsuccessful.
Our operating results and share price may be volatile, which could cause the value of our stockholders’ investments to
decline.
Our quarterly and annual operating results may fluctuate in the future, and such fluctuations may be significant. In addition,
securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations.
This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide
price fluctuations regardless of our operating performance. Our operating results and the trading price of our shares may fluctuate in
response to various factors, including:
•
•
•
•
•
•
market conditions in the broader stock market;
actual or anticipated fluctuations in our quarterly and annual financial and operating results;
introduction of new services by us or our competitors;
issuance of new or changed securities analysts’ reports or recommendations;
sales, or anticipated sales, of large blocks of our stock;
additions or departures of key personnel;
38
•
•
•
•
regulatory or political developments;
litigation and governmental investigations;
changing economic conditions; and
exchange rate fluctuations.
These and other factors, many of which are beyond our control, may cause our operating results and the market price for our
shares to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful
indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling their
shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price
of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that
issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a
lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability
and reputation.
Since we have no current plans to pay regular cash dividends on our common stock, stockholders may not receive any
return on investment unless they sell their common stock for a price greater than that which they paid for it.
Although we have previously declared dividends to our stockholders prior to our initial public offering in May 2013, we do
not currently anticipate paying any regular cash dividends on our common stock. Any decision to declare and pay dividends in the
future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial
condition, cash requirements, contractual restrictions and other factors that our Board may deem relevant. In addition, our ability to pay
dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur,
including under our existing credit facilities. Therefore, any return on investment in our common stock is solely dependent upon the
appreciation of the price of our common stock on the open market, which may not occur.
Our certificate of incorporation contains a provision renouncing any interest and expectancy in certain corporate
opportunities identified by certain parties, even if such corporate opportunities are ones that we might reasonably be deemed to
have pursued or had the ability or desire to pursue.
Our certificate of incorporation provides that IQVIA renounces any interest or expectancy in the business opportunities of the
TPG Global, LLC, the Bain Capital, LLC, CPP Investment Board Private Holdings Inc., and Leonard Green & Partners, L.P., and their
affiliates (other than our Company and our subsidiaries) and all of their respective partners, principals, directors, officers, members,
managers, managing directors and/or employees, and each such person will have no obligation to offer us such opportunities. This
provision applies to each of these current or former stockholders (and associated parties) only for so long as a nominee designated by
such stockholder under the Shareholders Agreement continues to serve on our board of directors and no individual serving our board of
directors has at any time been designated as a nominee by such stockholder under the Shareholders Agreement. Stockholders are
deemed to have notice of and have consented to this provision of our certificate of incorporation.
Therefore, a director or officer of our Company who also serves as a director, officer, member, manager, or employee of such
stockholders may pursue certain business opportunities, including acquisitions, that may be complementary to its business and, as a
result, such opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on the
business, financial condition, results of operations, or prospects of our company if attractive corporate opportunities are allocated by
such stockholders to themselves or their other affiliates instead of to us.
Item 1B. Unresolved Staff Comments
None.
39
Item 2. Properties
As of December 31, 2020, we had approximately 262 offices located in approximately 82 countries. Our executive
headquarters are located adjacent to Research Triangle Park, North Carolina and in Danbury, Connecticut. We own facilities in Buenos
Aires, Argentina; Caracas, Venezuela; Los Ruices, Venezuela; and Bangalore, India. All of our other offices are leased. Our properties
are geographically distributed to meet our worldwide operating requirements, and none of our properties are individually material to our
business operations. We believe that collectively our facilities are suitable and adequate for our present purposes. We continue to assess
the impacts of COVID-19 on the suitability, adequacy, productive capacity and utilization of our existing principal physical properties,
and we are in the process of evaluating the future state of our workforce practices, which may result in changes to our physical property
needs.
Item 3. Legal Proceedings
Information pertaining to legal proceedings can be found in Note 12 to our audited consolidated financial statements
included elsewhere in this Annual Report on Form 10-K and is incorporated by reference herein.
Item 4. Mine Safety Disclosures
Not applicable.
40
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
PART II
Securities Market Information for Common Stock
Our common stock trades on the NYSE under the symbol “IQV.”
Holders of Record
On February 1, 2021, we had approximately 25 stockholders of record as reported by our transfer agent. Holders of record
are defined as those stockholders whose shares are registered in their names in our stock records and do not include beneficial owners
of common stock whose shares are held in the names of brokers, dealers or clearing agencies.
Dividend Policy
We do not currently intend to pay dividends on our common stock, and no dividends were declared or paid in 2020 or 2019.
However, we expect to reevaluate our dividend policy on a regular basis and may, subject to compliance with the covenants contained
in our Senior Secured Credit Facilities and long-term debt arrangements and other considerations, determine to pay dividends in the
future. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of
our Board, which may take into account general and economic conditions, our financial condition and results of operations, our
available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the
implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our Board
may deem relevant. Our long-term debt arrangements contain usual and customary restrictive covenants that, among other things, place
limitations on our ability to declare dividends. For additional information regarding these restrictive covenants, see Part II, Item 7
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and
Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Recent Sales of Unregistered Securities
We did not sell any unregistered equity securities in 2020.
Purchases of Equity Securities by the Issuer
On October 30, 2013, our Board of Directors (the “Board”) approved an equity repurchase program (the “Repurchase
Program”) authorizing the repurchase of up to $125.0 million of either our common stock or vested in-the-money employee stock
options, or a combination thereof. Our Board increased the stock repurchase authorization under the Repurchase Program with respect
to the repurchase of our common stock by $600 million, $1.5 billion, $2 billion, $1.5 billion, and $2.0 billion in 2015, 2016, 2017,
2018, and 2019, respectively, which increased the total amount that has been authorized under the Repurchase Program to $7.725
billion. The Repurchase Program does not obligate us to repurchase any particular amount of common stock or vested in-the-money
employee stock options, and it may be modified, extended, suspended or discontinued at any time. The timing and amount of
repurchases are determined by our management based on a variety of factors such as the market price of our common stock, our
corporate requirements, and overall market conditions. Purchases of our common stock may be made in open market transactions
effected through a broker-dealer at prevailing market prices, in block trades, or in privately negotiated transactions. The Repurchase
Program for common stock does not have an expiration date. 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.
From inception of the Repurchase Program through December 31, 2020, we have repurchased a total of $6.4 billion of our
securities under the Repurchase Program.
During the year ended December 31, 2020, we repurchased 2,718,447 shares of our common stock for approximately $423.1
million under the Repurchase Program. These amounts include 1,000,000 shares of our common stock repurchased from certain
Selling Stockholders in a private transaction for an aggregate purchase price of approximately $164.3 million. For additional
information regarding our equity repurchases, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and
41
Results of Operations—Liquidity and Capital Resources” and Note 13 to our audited consolidated financial statements included
elsewhere in this Annual Report on Form 10-K.
As of December 31, 2020, we had remaining authorization to repurchase up to $0.9 billion of our common stock under the
Repurchase Program.
Since the Merger between Quintiles and IMS health, we have repurchased 65.6 million shares of our common stock at an
average market price per share of $97.29 for an aggregate purchase price of $6.4 billion both under and outside of the Repurchase
Program. This includes shares withheld from employees to satisfy certain tax obligations due in connection with grants of stock under
the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award Plan (the “Plan”). The Plan provides for the withholding of shares to
satisfy tax obligations. It does not specify a maximum number of shares that can be withheld for this purpose. The shares of common
stock withheld to satisfy tax withholding obligations may be deemed to be “issuer purchases” of shares that are required to be disclosed
pursuant to this Item.
The following table summarizes the monthly equity repurchase activity for the three months ended December 31, 2020 and
the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program.
Period
Total Number of Shares
Purchased
Average Price Paid per
Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the
Plans or Programs
October 1, 2020 – October 31, 2020
November 1, 2020 – November 30,
2020
December 1, 2020 – December 31,
2020
Stock Performance Graph
(in millions, except per share data)
0.1 $
0.0 $
0.5 $
0.6
156.83
—
168.49
0.1 $
0.0 $
0.5 $
0.6
999
999
918
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by
reference into any filing of IQVIA Holdings Inc. under the Exchange Act or under the Securities Act, except as shall be expressly set
forth by specific reference in such filing.
The following graph shows a comparison from December 31, 2015 through December 31, 2020 of the cumulative total return
for our common stock, the Standard & Poor’s 500 Stock Index (“S&P 500”) and a select peer group. The peer group consists of Cerner
Corporation, Charles River Laboratories, Inc., Equifax Inc., ICON plc, IHS Markit Ltd., Laboratory Corporation of America Holdings,
Nielsen N.V., PRA Health Sciences, Inc., Syneos Health (formerly INC Research Holdings), Thomson Reuters Corporation and Verisk
Analytics, Inc. The companies in our peer group are publicly traded information services, information technology or clinical research
companies, and thus share similar business model characteristics to IQVIA, or provide services to similar customers as IQVIA. Many
of these companies are also used by our compensation committee for purposes of compensation benchmarking.
The graph assumes that $100 was invested in IQVIA, the S&P 500 and the peer group as of the close of market on December
31, 2015, assumes the reinvestments of dividends, if any. The S&P 500 and our peer group are included for comparative purposes only.
They do not necessarily reflect management’s opinion that the S&P 500 and our peer group are an appropriate measure of the relative
performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of our common
stock.
42
12/31/2015
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
IQVIA
Peer Group
S&P 500
$
$
$
100 $
100 $
100 $
111 $
103 $
112 $
143 $
119 $
136 $
169 $
114 $
130 $
225 $
160 $
171 $
261
197
203
Item 6. Selected Financial Data
We have derived the following consolidated statements of income data and cash flows for 2020, 2019 and 2018 and
consolidated balance sheet data as of December 31, 2020 and 2019 from our audited consolidated financial statements included
elsewhere in this Annual Report on Form 10-K. We have derived the following consolidated statements of income data for 2017 and
2016 and consolidated balance sheet data as of December 31, 2018, 2017 and 2016 from our audited consolidated financial statements
not included in this Annual Report on Form 10-K. You should read the consolidated financial data set forth below in conjunction with
our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K and the information
under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Effective January 1,
2018, we adopted the requirements of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers
(Topic 606) (“ASU 2014-09”) and ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of
Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”) using the full retrospective method. As a
result of the adoption of ASU 2014-09 and ASU 2017-07, the Company retrospectively adjusted related presentations. We have
included the results of operations of acquired businesses from the respective date of acquisition. As a result, our period to period results
of operations vary depending on the dates and sizes of the acquisitions. Effective January 1, 2019, we adopted the requirements of
ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification and elected the transition method
which allows for disclosures to be updated prospectively and prior periods to be presented in accordance with previous guidance.
43
Comparison of 5 Years Cumulative Total ReturnAssumes Initial Investment of $100December 2020IQVIA Holdings Inc.S&P 500 - Total ReturnPeer Group12/31/201512/31/201612/31/201712/31/201812/31/201912/31/2020050100150200250300
Accordingly, this selected financial data is not necessarily comparable or indicative of our future results. You should read this selected
consolidated financial data in conjunction with our audited consolidated financial statements and related footnotes included elsewhere
in this Annual Report on Form 10-K.
(in millions, except per share data)
Statement of Income Data:
Revenues
Costs of revenue, exclusive of depreciation and
amortization
Selling, general and administrative expenses
Depreciation and amortization
Impairment charges(1)
Restructuring costs
Merger related costs(2)
Income from operations
Interest expense, net
Loss on extinguishment of debt
Other expense (income), net
Income before income taxes and equity in earnings
(losses) of unconsolidated affiliates
Income tax expense (benefit)(3)
Income before equity in earnings (losses) of
unconsolidated affiliates
Equity in earnings (losses) of unconsolidated affiliates
Net income
Net income attributable to non-controlling interests
Net income attributable to IQVIA Holdings Inc.
(in millions, except per share data)
Earnings per share attributable to common stockholders:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
(in millions)
Statement of Cash Flow Data:
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Other Financial Data:
Capital expenditures
2020
2019
2018
2017(4)
2016(4)(5)
Year Ended December 31,
$
11,359 $
11,088 $
10,412 $
9,702 $
6,815
7,500
1,789
1,287
7,300
1,734
1,202
6,746
1,716
1,141
—
52
—
731
410
13
(65)
373
72
301
7
308
(29)
279
—
75
—
777
438
24
(37)
352
116
236
(9)
227
(36)
191
—
68
—
741
406
2
5
328
59
269
15
284
(25)
259
6,301
1,622
1,011
40
63
—
665
339
19
13
294
(992)
1,286
10
1,296
(19)
1,277
4,748
1,016
289
28
71
87
576
140
31
(11)
416
325
91
(4)
87
(15)
72
2020
2019
2018
2017(4)
2016(4)(5)
As of December 31,
$
$
1.46 $
1.43 $
0.98 $
0.96 $
1.27 $
1.24 $
5.86 $
5.74 $
0.48
0.47
191.3
195.0
195.1
199.6
203.7
208.2
217.8
222.6
149.1
152.0
2020
2019
2018
2017(4)
2016(4)(5)
Year Ended December 31,
$
1,959 $
1,417 $
1,254 $
970 $
(796)
(217)
(1,190)
(276)
(810)
(452)
(1,190)
(72)
860
1,731
(2,284)
$
(616) $
(582) $
(459) $
(369) $
(164)
44
(in millions)
Balance Sheet Data:
Cash and cash equivalents
Investments in debt, equity and other securities
Trade accounts receivable and unbilled services, net
Property and equipment, net
Total assets
Total long-term liabilities
Total debt(6)
Total stockholders’ equity (deficit)
2020
2019
2018
2017(4)
2016(4)(5)
As of December 31,
$
1,814 $
166
2,410
482
24,564
13,726
12,600
6,280
837 $
127
891 $
88
2,582
458
23,251
13,043
11,705
6,263
2,394
434
22,549
12,061
11,056
6,954
959 $
1,198
54
2,097
440
22,857
11,457
10,269
8,244
53
1,816
406
21,312
9,609
7,219
8,781
(1)
(2)
(3)
(4)
(5)
(6)
In 2017, we recognized $40 million of impairment losses for declines in fair value of goodwill and identifiable intangible assets in
Encore, which we sold in the third quarter of 2017. In 2016, we recognized $28 million of impairment losses for declines in fair value of
goodwill ($23 million) and identifiable intangible assets ($5 million) in Encore. In 2015, we wrote down $2 million related to long-lived
assets.
Merger related costs include the direct and incremental costs associated with the Merger.
Income Tax expense in 2020 includes a tax benefit of $26 million related to our election for the GILTI high tax exception. Income tax
expense in 2019 includes a reversal of $25 million related to a reversal of an FDII benefit in 2018 due to proposed regulations being
issued in 2019. Income tax expense in 2018 includes $(35) million related to finalization of SAB 118 and the impacts of GILTI and FDII.
Income tax expense in 2017 includes $(966) million related to the enactment of the Tax Act and $(261) million related to purchase
accounting amortization as a result of the Merger. Income tax expense in 2016 includes $252 million related to a change in our
indefinitely reinvested assertion on our cumulative foreign earnings as a result of the Merger.
As a result of the adoption of ASU 2014-09, we retrospectively adjusted 2017 and 2016 related presentations.
Includes the acquisition of IMS Health effective October 3, 2016.
Excludes $67 million, $60 million, $49 million, $44 million, $19 million, $33 million and $22 million of unamortized discounts and debt
issuance costs as of December 31, 2020, 2019, 2018, 2017, and 2016.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our
consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. Some of the
information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect
to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read
the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actual results to differ
materially from the results described in or implied by the forward-looking statements contained in the following discussion and
analysis.
Overview
IQVIA is a leading global provider of advanced analytics, technology solutions, and clinical research services to the life
sciences industry. IQVIA creates intelligent connections across all aspects of healthcare through its analytics, transformative technology,
big data resources and extensive domain expertise. IQVIA Connected Intelligence™ delivers powerful insights with speed and agility —
enabling customers to accelerate the clinical development and commercialization of innovative medical treatments that improve
healthcare outcomes for patients. With approximately 70,000 employees, we conduct operations in more than 100 countries.
We are a global leader in protecting individual patient privacy. We use a wide variety of privacy-enhancing technologies and
safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare stakeholders identify
disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. Our insights and execution
capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government agencies, payers and other
healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances, in an effort to advance
their path toward cures.
We are managed through three reportable segments, Technology & Analytics Solutions, Research & Development Solutions
and Contract Sales & Medical Solutions. Technology & Analytics Solutions provides critical information, technology solutions and
real world insights and services to our life science clients. Research & Development Solutions, which primarily serves
45
biopharmaceutical clients, is engaged in research and development and provides clinical research and clinical trial services. Contract
Sales & Medical Solutions provides contract sales to both biopharmaceutical clients and the broader healthcare market.
For a description of our service offerings within our segments, refer to Part I, Item 1, “Business”.
Industry Outlook
For information about the industry outlook and markets that we operate in, refer to Part I, Item I, “Our Market Outlook”.
Overview of the Impact of COVID-19
As a result of the global spread of COVID-19 beginning in early March, we began to experience general business disruptions
that impeded normal business activity including our ability to perform on-site monitoring and deliver offerings that rely on face-to-face
interaction or in-person gatherings.
These disruptions have impacted all three of our reportable segments. The Research & Development Solutions business
responded quickly to support our clients with the development of vaccines and therapies for COVID-19. We have been involved in
clinical trials and studies for the virus, as well as patient recruitment for COVID-19 trials. The pandemic has accelerated the need for
remote and risk-based monitoring in clinical research, which in turn has accelerated the adoption of our virtual trial technology. This
technology was deployed to speed vaccine development and helped secure full-service COVID trials and new studies with top
pharmaceutical clients. We continue to see gradual improvement in the accessibility of clinical research sites in the Research &
Development Solutions business. We are seeing a return to on-site monitoring visits which exceeded the number of remote visits during
the second half of the year. In instances where sites remain physically inaccessible for clinical monitoring, remote monitoring and virtual
solutions continue to be effective alternatives. Site start-up activities continued to increase along with patient recruitment trends. In our
Technology & Analytics Solutions segment, our Real-World business has been relatively well insulated from the impacts of the virus
and it had strong growth for the year. The Real-World business is advanced in the use of secondary data, remote monitoring and virtual
research approaches, which helped us pivot quickly to working in the new remote world at the onset of the pandemic. However, the
portion of our Real-World business that requires site monitoring activity also experienced limitations on site accessibility, which led to a
reduction in the associated revenue. Within our Technology & Analytics Solutions segment, we have had very little interruption in data
supply and demand. Our analytics and consulting businesses have performed well despite business development being hampered by lack
of in-person interactions. Our Technology & Analytics solutions offerings that rely on face-to-face interactions or are dependent on in-
person gatherings, events or conferences continue to experience disruption, and where we were unable to execute on our commitments
due to COVID-19, we were not able to recognize the associated revenue in the period. Activity within the Contract Sales and Medical
Solutions business continues to be more challenging due to a decline in sales rep visits, and physician attention diverted to the
COVID-19 crisis.
We have accelerated and expanded a variety of cost containment actions to reduce the impact to profitability. We have
activated business continuity plans, including remote delivery capabilities in technology and analytics, remote monitoring and virtual
trials in Research & Development Solutions and virtual commercial activity with clients wherever possible. We anticipate an
acceleration of business momentum when the crisis subsides as delayed trial activities will still need to be performed.
The Company continues to maintain strong liquidity. As of December 31, 2020, cash and cash equivalents were $1,814 million
and the Company had no amounts drawn under its $1.5 billion revolving credit facility. At December 31, 2020, the Company was in
compliance with the financial covenants under its debt agreements in all material respects and does not have material uncertainty about
ongoing ability to meet the covenants of our credit arrangements.
To help ensure the safety and well-being of our employees, customers, partners and the broader community and continuity of
our business operations, we continue to monitor health authority guidance on mitigating the spread of COVID-19 and managing positive
cases. We manage our response to the pandemic through a combination of enterprise-wide and regional governance teams, with
particular focus on the medical and scientific, information technology, human capital and financial impacts of the pandemic on our
business. These teams met, and continue to meet, regularly as necessary based on the status of the pandemic. We closely monitor the
impact of COVID-19 on our operations and report to our Board regularly on the progress of our response to the COVID-19 outbreak. We
have established global workplace protocols that govern the return of our employees to our offices.
46
Business Combinations
We have completed and will continue to consider strategic business combinations to enhance our capabilities and offerings in
certain areas, including various individually immaterial acquisitions during the years ended December 31, 2020 and 2019. These
transactions were accounted for as business combinations and the acquired results of operations are included in our consolidated
financial information since the acquisition date. See Note 14 to our audited consolidated financial statements included elsewhere in this
Annual Report on Form 10-K for additional information with respect to these business combinations.
Sources of Revenue
Total revenues are comprised of revenues from the provision of our services. We do not have any material product revenues.
Costs and Expenses
Our costs and expenses are comprised primarily of our costs of revenue, reimbursed expenses and selling, general and
administrative expenses. Costs of revenue include compensation and benefits for billable employees and personnel involved in
production, trial monitoring, data management and delivery, and the costs of acquiring and processing data for our information
offerings; costs of staff directly involved with delivering technology-related services offerings and engagements, related
accommodations and the costs of data purchased specifically for technology services engagements; and other expenses directly related
to service contracts such as courier fees, laboratory supplies, professional services and travel expenses. As noted above, reimbursed
expenses are comprised principally of payments to investigators who oversee clinical trials and travel expenses for our clinical
monitors and sales representatives. Selling, general and administrative expenses include costs related to sales, marketing, and
administrative functions (including human resources, legal, finance, quality assurance, compliance and general management) for
compensation and benefits, travel, professional services, training and expenses for information technology, facilities and depreciation
and amortization.
Foreign Currency Translation
In 2020, approximately 35% of our revenues were denominated in currencies other than the United States dollar, which
represents approximately 60 currencies. Because a large portion of our revenues and expenses are denominated in foreign currencies
and our financial statements are reported in United States dollars, changes in foreign currency exchange rates can significantly affect
our results of operations. The revenue and expenses of our foreign operations are generally denominated in local currencies and
translated into United States dollars for financial reporting purposes. Accordingly, exchange rate fluctuations will affect the
translation of foreign results into United States dollars for purposes of reporting our condensed consolidated results. As a result, we
believe that reporting results of operations that exclude the effects of foreign currency rate fluctuations on certain financial results can
facilitate analysis of period to period comparisons. This constant currency information assumes the same foreign currency exchange
rates that were in effect for the comparable prior-year period were used in translation of the current period results.
Consolidated Results of Operations
For information regarding our results of operations for Technology & Analytics Solutions, Research & Development Solutions
and Contract Sales & Medical Solutions, refer to “Segment Results of Operations” later in this section.
For a discussion of our results of operations comparison for 2019 and 2018, refer to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2019 filed on February 18, 2020. Our reportable segment results of operations comparison for 2018
included below within this Annual Report on Form 10-K reflects the change in segment presentation that occurred during the first
quarter of 2019.
Revenues
Year Ended December 31,
2020 vs. 2019
2019 vs. 2018
Change
(dollars in millions)
Revenues
2020
11,359 $
2019
11,088 $
2018
10,412 $
$
$
%
$
%
271
2.4 % $
676
6.5 %
47
2020 compared to 2019
In 2020, our revenues increased $271 million, or 2.4%, as compared to 2019. This increase was comprised of constant
currency revenue growth of approximately $252 million, or 2.3%, reflecting a $365 million increase in Technology & Analytics
Solutions, offset by a $38 million decrease in Research & Development Solutions and a $75 million decrease in Contract Sales &
Medical Solutions.
Costs of Revenue, exclusive of Depreciation and Amortization
(dollars in millions)
Costs of revenue, exclusive of depreciation and amortization
% of revenues
2020 compared to 2019
Year Ended December 31,
2020
7,500
$
$
66.0 %
2019
2018
7,300
65.8 %
$
6,746
64.8 %
When compared to 2019, costs of revenue, exclusive of depreciation and amortization, in 2020 increased $200 million, or
2.7%. This increase included a constant currency increase of approximately $223 million, or 3.1%, comprised of a $232 million
increase in Technology & Analytics Solutions, a $67 million increase in Research & Development Solutions, offset by a $76 million
decrease in Contract Sales & Medical Solutions.
As a percent of revenues, costs of revenue remained flat compared to 2019.
Selling, General and Administrative Expenses
(dollars in millions)
Selling, general and administrative expenses
% of revenues
2020 compared to 2019
Year Ended December 31,
2020
1,789
$
$
15.7 %
2019
2018
1,734
15.6 %
$
1,716
16.5 %
The $55 million increase in selling, general and administrative expenses in 2020 as compared to 2019 included a constant
currency increase of approximately $62 million, or 3.6%, comprised of a $23 million increase in Technology & Analytics Solutions, a
$31 million increase in Research & Development Solutions, and a $12 million increase in general corporate and unallocated expenses.
These increases were partially offset by a $4 million decrease in Contract Sales & Medical Solutions.
Depreciation and Amortization
(dollars in millions)
Depreciation and amortization
% of revenues
Year Ended December 31,
2020
1,287
$
$
11.3 %
2019
2018
1,202
10.8 %
$
1,141
11.0 %
The $85 million increase in depreciation and amortization in 2020 as compared to 2019 was primarily due to higher
intangible asset balances as a result of acquisitions occurring in 2019, increased amortization due to higher capitalized software
balances, and accelerated depreciation on an internal-use software asset in the first quarter of 2020.
Restructuring Costs
(in millions)
Restructuring costs
Year Ended December 31,
2020
2019
2018
$
52 $
75 $
68
48
The restructuring costs incurred were due to ongoing efforts to streamline our global operations. The remaining actions under
these plans are expected to occur throughout 2021 and are expected to consist of consolidating functional activities, eliminating
redundant positions, and aligning resources with customer requirements.
Interest Income and Interest Expense
(in millions)
Interest income
Interest expense
Year Ended December 31,
2020
2019
2018
$
$
(6) $
416 $
(9) $
447 $
(8)
414
Interest income included interest received primarily from bank balances and investments.
Interest expense during 2020 was lower than 2019 due to lower interest rates attributed to lower LIBOR rates and the
redemption of the $800 million of 4.875% senior notes due 2023, partially offset by an increase in the average debt outstanding.
Loss on Extinguishment of Debt
(in millions)
Loss on extinguishment of debt
Year Ended December 31,
2020
2019
2018
$
13 $
24 $
2
During 2020, we recognized loss on extinguishment of debt of $13 million for fees and expenses related to the refinancing of
our 3.500% senior notes due 2024 as discussed further in Note 10 to our audited consolidated financial statements included elsewhere
in this Annual Report on Form 10-K.
During 2019, we recognized loss on extinguishment of debt of $24 million for fees and expenses related to the redemption of
our 4.875% senior notes due 2023 in aggregate principal amount of $800 million as discussed further in Note 10 to our audited
consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
See “—Liquidity and Capital Resources” for more information on these transactions.
Other Expense (Income), Net
(in millions)
Other (income) expense, net
Year Ended December 31,
2020
2019
2018
$
(65) $
(37) $
5
Other income, net for 2020 primarily consisted of a decrease in fair value of acquisition-related contingent consideration,
mark-to-market gains on equity securities, a decrease in foreign currency losses, and a gain on investments in mutual funds.
Other income, net for 2019 primarily consisted of a gain related to the remeasurement of a previously held equity interest of
an equity method investment upon acquiring the remaining interest as a result of a business combination.
Income Tax Expense (Benefit)
(dollars in millions)
Income tax expense (benefit)
Effective income tax rate
Year Ended December 31,
2020
2019
2018
$
72
$
116
$
19.3 %
33.0 %
59
18.0 %
In 2020, the U.S. Treasury Department issued final regulations regarding Foreign Derived Intangible Income (“FDII”) and
Global Intangible Low-Taxed Income (“GILTI”). We have determined we will elect the GILTI high tax exception as allowed by the
final regulations and we will amend our 2018 and 2019 US Federal consolidated income tax returns resulting in a favorable impact of
$26 million, which we recorded in 2020.
49
In 2019 the U.S. Treasury Department issued final regulations on the transition tax and proposed regulations on Foreign
Derived Intangible Income (“FDII") which we analyzed. While the final regulations related to the transition tax did not have a material
impact on us, the proposed guidance for FDII had an unfavorable impact. Although the proposed guidance for FDII is not authoritative
and subject to change in the regulatory review process, we reversed the tax benefit recorded in 2018 by recording a tax expense of $25
million for this impact.
Equity in Earnings (Losses) of Unconsolidated Affiliates
(in millions)
Equity in (losses) earnings of unconsolidated affiliates
Year Ended December 31,
2020
2019
2018
$
7 $
(9) $
15
Equity in earnings (losses) of unconsolidated affiliates increased in 2020 compared to 2019 primarily due to higher earnings
from our investment in NovaQuest Pharma Opportunities Fund III.
Net Income Attributable to Non-controlling Interests
(in millions)
Net income attributable to non-controlling interests
Year Ended December 31,
2020
2019
2018
$
(29) $
(36) $
(25)
Net income attributable to non-controlling interests primarily consists of Quest’s interest in Q2 Solutions.
Segment Results of Operations
Revenues and profit by segment are as follows:
(in millions)
Technology & Analytics Solutions
Research & Development Solutions
Contract Sales & Medical Solutions
Total
General corporate and unallocated
Depreciation and amortization
Restructuring costs
Consolidated
Segment Revenues
Segment Profit
2020
2019
2018
2020
2019
2018
$
4,858 $
5,760
741
11,359
4,486 $
5,788
814
11,088
4,137 $
5,465
810
10,412
$
11,359 $
11,088 $
10,412 $
1,216 $
1,048
57
2,321
(251)
1,101 $
1,141
52
2,294
(240)
1,041
1,055
61
2,157
(207)
(1,287)
(1,202)
(1,141)
(52)
731 $
(75)
777 $
(68)
741
Certain costs are not allocated to our segments and are reported as general corporate and unallocated expenses. These costs
primarily consist of stock-based compensation and expenses to integration activities and acquisitions. We also do not allocate
depreciation and amortization or impairment charges to our segments. Prior period segment results have been recast to conform to
changes to management reporting in 2019. The recast impacts the allocation of selling, general and administrative expenses for 2018.
50
Technology & Analytics Solutions
(dollars in millions)
Revenues
2020
2019
2018
$
4,858 $
4,486 $
4,137 $
2020 vs. 2019
372
8.3 % $
2019 vs. 2018
349
8.4 %
Year Ended December 31,
Change
Cost of revenue, exclusive
of depreciation and
amortization
Selling, general and
administrative expenses
Segment profit
2,900
2,663
2,343
742
1,216 $
722
1,101 $
$
753
1,041 $
237
20
115
8.9
2.8
10.4 % $
320
(31)
60
13.7
-4.1
5.8 %
Revenues
2020 compared to 2019
Technology & Analytics Solutions’ revenues were $4,858 million in 2020, an increase of $372 million, or 8.3%, over 2019.
This increase was comprised of constant currency revenue growth of approximately $365 million, or 8.1%, reflecting revenue growth
in the Europe and Africa region as well as the Americas region. The revenue growth in these regions was driven by higher real-world
and analytical services. See Part II—Item 7—“Overview of the Impact of COVID-19" included elsewhere in this Annual Report on
Form 10-K for a discussion of the impact from COVID-19 on Technology & Analytics Solutions business activity.
Costs of Revenue, exclusive of Depreciation and Amortization
2020 compared to 2019
Technology & Analytics Solutions’ costs of revenue, exclusive of depreciation and amortization, were $2,900 million in
2020, an increase of $237 million over 2019. This increase was comprised of constant currency increase of approximately
$232 million, or 8.7%, reflecting an increase in compensation and related expenses to support revenue growth.
Selling, General and Administrative Expenses
2020 compared to 2019
Technology & Analytics Solutions’ selling, general and administrative expenses increased $20 million in 2020 as compared
to 2019. This increase was comprised of a constant currency increase of approximately $23 million, or 3.2%, reflecting an increase in
compensation and related expenses.
Research & Development Solutions
(dollars in millions)
Revenues
Cost of revenue, exclusive of
depreciation and amortization
Selling, general and administrative
expenses
Segment profit
Backlog
Year Ended December 31,
2020
2019
2018
$
5,760 $
5,788 $
5,465 $
Change
2020 vs. 2019
(28)
(0.5) % $
2019 vs. 2018
323
5.9 %
3,974
3,936
3,721
38
1.0
738
1,048 $
711
1,141 $
689
1,055 $
$
27
(93)
3.8
(8.2) % $
215
22
86
5.8
3.2
8.2 %
Research & Development Solutions contracted backlog increased from $19.0 billion at December 31, 2019 to $22.6 billion at
December 31, 2020 and we expect approximately $5.9 billion of this backlog to convert to revenue in the next 12 months. Contracted
backlog was $17.1 billion at December 31, 2018.
51
Backlog represents, at a particular point in time, future revenues from work not yet completed or performed under signed
contracts. Once work begins on a project, revenues are recognized over the duration of the project.
We believe that backlog is an indicator of future revenues but the timing of revenue will be affected by a number of factors,
including the variable size and duration of projects, many of which are performed over several years, cancellations, and changes to the
scope of work during the course of projects. Projects that have been delayed remain in backlog, but the timing of the revenue generated
may differ from the timing originally expected. Additionally, projects may be terminated or delayed by the customer or delayed by
regulatory authorities. In the event that a client cancels a contract, we typically would be entitled to receive payment for all services
performed up to the cancellation date and subsequent client-authorized services related to winding down the canceled project. For more
details regarding risks related to our backlog, see Part I, Item IA, “Risk Factors—Risks Related to our Business—The relationship of
backlog to revenues varies over time.”
Revenues
2020 compared to 2019
Research & Development Solutions’ revenues were $5,760 million in 2020, a decrease of $28 million, or 0.5%, over 2019.
This decrease was comprised of constant currency revenue decline of approximately $38 million, or 0.7%, reflecting volume-related
decreases in clinical services and lab testing impacted by COVID-19, largely offset by the incremental revenue from the clinical trials
and studies to support the development of vaccines and therapies for COVID-19. See Part II—Item 7—“Overview of the Impact of
COVID-19" included elsewhere in this Annual Report on Form 10-K for a discussion of the impact from COVID-19 on Research &
Development Solutions business activity.
Costs of Revenue, exclusive of Depreciation and Amortization
2020 compared to 2019
Research & Development Solutions’ costs of revenue, exclusive of depreciation and amortization, increased $38 million, or
1.0%, in 2020 as compared to 2019. This increase included a constant currency increase of approximately $67 million, or 1.7%,
reflecting an increase in compensation and related expenses.
Selling, General and Administrative Expenses
2020 compared to 2019
Research & Development Solutions’ selling, general and administrative expenses increased $27 million, or 3.8%, in 2020 as
compared to 2019, which included a constant currency increase of approximately $31 million, or 4.4%, reflecting an increase in
compensation and related expenses.
Contract Sales & Medical Solutions
(dollars in millions)
Revenues
Cost of revenue, exclusive of depreciation and
amortization
Selling, general and administrative expenses
Segment profit
Year Ended December 31,
2020
2019
2018
$
$
741 $
626
58
57 $
814 $
701
61
810 $
682
67
52 $
61 $
52
2020 vs. 2019
(73)
(75)
(3)
5
Change
(9.0) % $
(10.7)
(4.9)
9.6 % $
2019 vs. 2018
4
19
(6)
(9)
0.5 %
2.8
(9.0)
(14.8) %
Revenues
2020 compared to 2019
Contract Sales & Medical Solutions’ revenues were $741 million in 2020, a decrease of $73 million, or 9.0%, over 2019. This
decrease was comprised of a constant currency revenue decline of approximately $75 million, or 9.2%, reflecting a volume decrease in
the Americas region. See Part II—Item 7—“Overview of the Impact of COVID-19" included elsewhere in this Annual Report on
Form 10-K for a discussion of the impact from COVID-19 on Contract Sales & Medical Solutions business activity.
Costs of Revenue, exclusive of Depreciation and Amortization
2020 compared to 2019
Contract Sales & Medical Solutions’ costs of revenue, exclusive of depreciation and amortization, decreased $75 million, or
10.7%, in 2020 as compared to 2019. This decrease included a constant currency decrease of approximately $76 million, or 10.8%,
reflecting a decrease in compensation and related expenses as a result of reduced volume in the Americas region.
Selling, General and Administrative Expenses
2020 compared to 2019
Contract Sales & Medical Solutions’ selling, general and administrative expenses decreased $3 million, or 4.9%, in 2020 as
compared to 2019. This decrease included a constant currency decrease of approximately $4 million, or 6.6%, reflecting a decrease in
compensation and related expenses.
Liquidity and Capital Resources
Overview
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Our
principal source of liquidity is operating cash flows. In addition to operating cash flows, other significant factors that affect our overall
management of liquidity include: capital expenditures, acquisitions, investments, debt service requirements, dividends, equity
repurchases, adequacy of our revolving credit and receivables financing facilities, and access to the capital markets.
We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the
extent to which those funds can be accessed on a cost-effective basis. The repatriation of cash balances from certain of our subsidiaries
could have adverse tax consequences; however, those balances are generally available without legal restrictions to fund ordinary
business operations. We have and expect to transfer cash from those subsidiaries to the United States and to other international
subsidiaries when it is cost effective to do so.
We had a cash balance of $1,814 million at December 31, 2020 ($1,065 million of which was in the United States), an
increase from $837 million at December 31, 2019.
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. We
regularly evaluate our debt arrangements, as well as market conditions, and from time to time we may explore opportunities to modify
our existing debt arrangements or pursue additional financing arrangements that could result in the issuance of new debt securities by
us or our affiliates. We may use our existing cash, cash generated from operations or dispositions of assets or businesses and/or
proceeds from any new financing arrangements or issuances of debt or equity securities to repay or reduce some of our outstanding
obligations, to repurchase shares from our stockholders or for other purposes. As part of our ongoing business strategy, we also
continually evaluate new acquisition, expansion and investment possibilities or other strategic growth opportunities, as well as
potential dispositions of assets or businesses, as appropriate, including dispositions that may cause us to recognize a loss on certain
53
assets. Should we elect to pursue any such transaction, we may seek to obtain debt or equity financing to facilitate those activities. Our
ability to enter into any such potential transactions and our use of cash or proceeds is limited to varying degrees by the terms and
restrictions contained in our existing debt arrangements. We cannot provide assurances that we will be able to complete any such
financing arrangements or other transactions on favorable terms or at all.
Equity Repurchase Program
On February 13, 2019, the Board increased the stock repurchase authorization under the “Repurchase Program by $2.0
billion, which increased the total amount that has been authorized under the Repurchase Program to $7.725 billion since the plan’s
inception in October 2013. 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.
As of December 31, 2020, the Company has remaining authorization to repurchase up to $0.9 billion of its common stock
under the Repurchase Program. 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.
Additional information regarding the Repurchase Program is presented in Part II, Item 5 “Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Note 13 to our audited consolidated financial
statements included elsewhere in this Annual Report on Form 10-K.
Debt
As of December 31, 2020, we had $12.6 billion of total indebtedness, excluding $1.5 billion of available borrowings under
our revolving credit facilities. See Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report
on Form 10-K for additional details regarding our credit arrangements.
Our long-term debt arrangements contain customary restrictive covenants and, as of December 31, 2020, we believe we were
in compliance with our restrictive covenants in all material respects.
Senior Secured Credit Facilities and Senior Notes
At December 31, 2020, our Fourth Amended and Restated Credit Agreement, as amended (the “Credit Agreement”)
provided financing through several senior secured credit facilities (collectively, the “senior secured credit facilities”) of up to
approximately $7,692 million, which consisted of $6,192 million principal amounts of debt outstanding (as detailed in the table
above), $4 million of issued standby letters of credit and $1,496 million of available borrowing capacity on the revolving credit
facility. 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. The term A loans and revolving credit facility under the
Credit Agreement mature in June 2023, while the term B loans under the Credit Agreement mature in 2024 and 2025. We are
required to make scheduled quarterly payments on the term A loans equal to 1.25% of the original principal amount, with the
remaining balance paid at maturity. We are required to make scheduled quarterly payments on the term B loans equal to
approximately 0.25% of the original principal amount, with the remaining balance paid at maturity. In addition, beginning with fiscal
year ending December 31, 2017, we were required to apply 50% of excess cash flow (as defined in the Credit Agreement), subject to
a reduction to 25% or 0% depending upon our senior secured first lien net leverage ratio, for prepayment of the term loans, with any
such prepayment to be applied toward principal payments due in subsequent quarters. We are also required to pay an annual
commitment fee that ranges from 0.20% to 0.35% in respect of any unused commitments under the revolving credit facility. The
Senior Secured Credit Facilities are collateralized by substantially all of our assets and the assets of our material domestic
subsidiaries including 100% of the equity interests of substantially all of our material domestic subsidiaries and 66% of the equity
interests of substantially all of our first-tier material foreign subsidiaries and their domestic subsidiaries.
For information regarding the Senior Secured Credit Facilities and senior notes, see Note 10 to our audited consolidated
financial statements included elsewhere in this Annual Report on Form 10-K.
54
Receivables Financing Facility
For information regarding receivables financing facility, see Note 10 to our audited consolidated financial statements
included elsewhere in this Annual Report on Form 10-K. As of December 31, 2020, there were $60 million of revolving loans
available under the receivables financing facility.
Years ended December 31, 2020, 2019 and 2018
Cash Flow from Operating Activities
(in millions)
Net cash provided by operating activities
2020 compared to 2019
Year Ended December 31,
2020
2019
2018
$
1,959 $
1,417 $
1,254
Cash provided by operating activities increased $542 million in 2020 as compared to 2019. The increase is primarily due to
improved collections from clients resulting in a decrease in accounts receivable and unbilled services ($377 million), an increase in
advanced billings ($182 million), an increase in cash-related net income ($102 million), and the timing of income tax and other payables
($78 million), partially offset by a decrease in customer prepayments ($54 million).
Cash Flow from Investing Activities
(in millions)
Net cash used in investing activities
2020 compared to 2019
Year Ended December 31,
2020
2019
2018
$
(796) $
(1,190) $
(810)
Cash used in investing activities decreased $394 million in 2020 as compared to 2019. The decrease was primarily driven by
lower cash used for the acquisition of businesses, net of cash acquired ($411 million).
Cash Flow from Financing Activities
(in millions)
Net cash used in financing activities
2020 compared to 2019
Year Ended December 31,
2019
2018
2020
$
(217) $
(276) $
(452)
Cash used in financing activities decreased $59 million in 2020 as compared to 2019. The decrease in cash used in financing
activities was primarily due to less cash used to repurchase common stock ($502 million), offset by a decrease in cash provided by
proceeds from debt issuances ($309 million) and a decrease in cash proceeds from revolving credit facilities, net of repayments
($131 million).
Contingencies
We are exposed to certain known contingencies that are material to our investors. The facts and circumstances surrounding
these contingencies and a discussion of their effect on us are in Note 12 to our audited consolidated financial statements included
elsewhere in this Annual Report on Form 10-K. These contingencies may have a material effect on our liquidity, capital resources or
results of operations. In addition, even where our reserves are adequate, the incurrence of any of these liabilities may have a material
effect on our liquidity and the amount of cash available to us for other purposes.
We believe that we have made appropriate arrangements in respect of the future effect on us of these known contingencies.
We also believe that the amount of cash available to us from our operations, together with cash from financing, will be sufficient for us
55
to pay any known contingencies as they become due without materially affecting our ability to conduct our operations and invest in
the growth of our business.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements except for operating leases entered into in the normal course of business.
Contractual Obligations and Commitments
Below is a summary of our future payment commitments by year under contractual obligations as of December 31, 2020:
(in millions)
Long-term debt, including interest(1)
2021
2022 - 2023
2024 - 2025
Thereafter
Total
$
498 $
2,758 $
6,875 $
4,088 $
14,219
Operating leases
Finance leases
Data acquisition
Purchase obligations(2)
Commitments to unconsolidated affiliates(3)
Benefit obligations(4)
Uncertain income tax positions(5)
Total
159
—
344
10
—
32
21
236
12
339
7
—
33
37
131
12
82
2
—
34
9
52
159
2
2
—
90
4
578
183
767
21
—
191
71
$
1,064 $
3,422 $
7,145 $
4,397 $
16,030
(1)
(2)
(3)
(4)
(5)
Interest payments on our debt are based on the interest rates in effect on December 31, 2020.
Purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all
significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable pricing provisions and the
approximate timing of the transactions.
We are currently committed to invest $130 million in private equity funds. As of December 31, 2020, we have funded approximately $80.2
million of these commitments and we have approximately $49.8 million remaining to be funded which has not been included in the above
table as we are unable to predict when these commitments will be paid.
Amounts represent expected future benefit payments for our pension and postretirement benefit plans, as well as expected contributions for
2021 for our funded pension benefit plans. We made cash contributions totaling approximately $30 million to our defined benefit plans in
2020, and we estimate that we will make contributions totaling approximately $32 million to our defined benefit plans in 2021. Due to the
potential impact of future plan investment performance, changes in interest rates, changes in other economic and demographic assumptions
and changes in legislation in foreign jurisdictions, we are not able to reasonably estimate the timing and amount of contributions that may
be required to fund our defined benefit plans for periods beyond 2021.
As of December 31, 2020, our liability related to uncertain income tax positions was approximately $129 million, $58 million of which has
not been included in the above table as we are unable to predict when these liabilities will be paid due to the uncertainties in the timing of
the settlement of the income tax positions.
Application of Critical Accounting Policies
Note 1 to the audited consolidated financial statements provided elsewhere in this Annual Report on Form 10-K describes the
significant accounting policies used in the preparation of the consolidated financial statements. The preparation of our consolidated
financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues
and expenses during the period. Our estimates are based on historical experience and various other assumptions we believe are
reasonable under the circumstances. We evaluate our estimates on an ongoing basis and make changes to the estimates and related
disclosures as experience develops or new information becomes known. Actual results may differ from those estimates.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the
preparation of our consolidated financial statements.
Revenue Recognition
The majority of the Company’s contracts within the Research & Development Solutions segment are service contracts for
clinical research that represent a single performance obligation. The Company provides a significant integration service resulting in a
56
combined output, which is clinical trial data that meets the relevant regulatory standards and can be used by the customer to progress to
the next phase of a clinical trial or solicit approval of a treatment by the applicable regulatory body. 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.
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). This cost-based method of revenue recognition requires the
Company to make estimates of costs to complete its projects on an ongoing basis. Significant judgment is required to evaluate
assumptions related to these estimates. The effect of revisions to estimates related to the transaction price or costs to complete a project
are recorded in the period in which the estimate is revised. Most contracts may be terminated upon 30 to 90 days notice by the
customer; 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.
Income Taxes
Certain items of income and expense are not recognized on our income tax returns and financial statements in the same year,
which creates timing differences. The income tax effect of these timing differences results in (1) deferred income tax assets that create
a reduction in future income taxes and (2) deferred income tax liabilities that create an increase in future income taxes. Recognition of
deferred income tax assets is based on management’s belief that it is more likely than not that the income tax benefit associated with
certain temporary differences, income tax operating loss and capital loss carryforwards and income tax credits, would be realized. We
recorded a valuation allowance to reduce our deferred income tax assets for those deferred income tax items for which it was more
likely than not that realization would not occur. We determined the amount of the valuation allowance based, in part, on our
assessment of future taxable income and in light of our ongoing income tax strategies. If our estimate of future taxable income or tax
strategies changes at any time in the future, we would record an adjustment to our valuation allowance. Recording such an adjustment
could have a material effect on our financial condition or results of operations.
Income tax expense is based on the distribution of profit before income tax among the various taxing jurisdictions in which
we operate, adjusted as required by the income tax laws of each taxing jurisdiction. Changes in the distribution of profits and losses
among taxing jurisdictions may have a significant impact on our effective income tax rate. We do not consider the undistributed
earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States.
Business Combinations
We use 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. We use significant judgments, estimates and assumptions in determining the estimated fair value of assets acquired,
liabilities assumed and non-controlling interest including expected future cash flows, discount rates that reflect the risk associated with
the expected future cash flows and estimated useful lives.
We have recorded and allocated to our 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. We review the carrying values of other identifiable intangible
assets if the facts and circumstances indicate a possible impairment. Any future impairment could have a material adverse effect on our
financial condition or results of operations.
Stock-based Compensation
We measure compensation cost for stock-based payment awards (stock options and stock appreciation rights) granted to
employees and non-employee directors at fair value using the Black-Scholes-Merton option-pricing model and for performance awards
using the Monte Carlo simulation model. Stock-based compensation expense includes stock-based awards granted to employees and
non-employee directors and has been reported in selling, general and administrative expenses in our consolidated statements of income
based upon the classification of the individuals who were granted stock-based awards.
57
The Black-Scholes-Merton option-pricing model requires the use of subjective assumptions, including share price volatility,
the expected life of the award, risk-free interest rate and the fair value of the underlying common shares on the date of grant. In
developing our assumptions, we take into account the following:
•
•
•
•
•
We calculate expected volatility based on reported data for selected reasonably similar publicly traded companies
for which the historical information is available. We plan to continue to use the guideline peer group volatility
information until the historical volatility of our common shares is relevant to measure expected volatility for future
award grants;
We determine the risk-free interest rate by reference to implied yields available from United States Treasury
securities with a remaining term equal to the expected life assumed at the date of grant;
We estimate the dividend yield to be zero as we do not currently anticipate paying any future dividends;
We estimate the average expected life of the award based on our historical experience; and
We estimate forfeitures based on our historical analysis of actual forfeitures.
Pensions and Other Postretirement Benefits
We provide retirement benefits to certain employees, including defined benefit pension plans and postretirement medical
plans. The determination of benefit obligations and expense is based on actuarial models. In order to measure benefit costs and
obligations using these models, critical assumptions are made with regard to the discount rate, expected return on plan assets, cash
balance crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost
trend rates are a key assumption used exclusively in determining costs for our postretirement health care and life insurance benefit
plans.
Recently Issued Accounting Standards
Information relating to recently issued accounting standards is included in Note 1 to our audited consolidated financial
statements included elsewhere in this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the potential loss arising from adverse changes in market rates and prices. In the ordinary course of business,
we are exposed to various market risks and we regularly evaluate our exposure to such changes. Our overall risk management strategy
seeks to balance the magnitude of the exposure and the cost and availability of appropriate financial instruments. The following
analyses present the sensitivity of our financial instruments to hypothetical changes that are reasonably possible over a one-year period.
Foreign Currency Exchange Rates
We transact business in more than 100 countries and approximately 60 currencies and are subject to risks associated with
fluctuating foreign currency exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign
currency exchange rate movements. Accordingly, we enter into foreign currency forward contracts to hedge certain forecasted foreign
currency cash flows related to service contracts and to hedge non-United States dollar anticipated intercompany reseller fees. It is our
policy to enter into foreign currency transactions only to the extent necessary to meet our objectives as stated above. We do not enter
into foreign currency transactions for investment or speculative purposes. The principal currencies hedged in 2020 were the British
Pound and the Japanese Yen.
The contractual value of our foreign exchange derivative instruments, all of which were foreign exchange forward contracts,
was approximately $70 million at December 31, 2020. The fair value of these contracts is subject to change as a result of potential
changes in foreign exchange rates. We assess our market risk based on changes in foreign exchange rates utilizing a sensitivity
analysis. The sensitivity analysis measures the potential gain or loss in fair values based on a hypothetical 10% change in foreign
currency exchange rates. The potential gain in fair value for foreign exchange forward contracts based on a hypothetical 10% decrease
in the value of the United States dollar was $7 million at December 31, 2020. However, the change in the fair value of the foreign
exchange forward contracts would likely be offset by a change in the value of the future service contract revenue or reseller fee being
58
hedged caused by the currency exchange rate fluctuation. The estimated fair values of the foreign exchange forward contracts were
determined based on quoted market prices.
Exchange rate fluctuations affect the United States dollar value of foreign currency revenue and expenses and may have a
significant effect on our results. Excluding the impacts from any outstanding or future hedging transactions, a hypothetical 10% change
in average exchange rates used to translate all foreign currencies to the United States dollar would have impacted income before
income taxes for 2020 by approximately $120 million. The actual impact of exchange rate movements in the future could differ
materially from this hypothetical analysis, based on the mix of foreign currencies and the timing and magnitude of individual exchange
rate movements.
Additionally, commencing in 2016, we designated a portion of our foreign currency denominated debt as a hedge of our net
investment in foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in the Euro exchange rate with
respect to the United States dollar. As of December 31, 2020, these borrowings (net of original issue discount) were €5,323 million
($6,529 million). A hypothetical 10% decrease in the value of the United States dollar would lead to a potential loss in fair value of
$653 million. However, this change in fair value would be offset by the change in value of the hedged portion of our net investment in
foreign subsidiaries caused by the currency exchange rate fluctuation.
Interest Rates
Because we have variable rate debt, fluctuations in interest rates affect our business. We attempt to minimize interest rate risk
and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate swaps. We have
entered into interest rate swaps with financial institutions that have reset dates and critical terms that match the underlying debt.
Accordingly, any change in market value associated with the interest rate swaps is offset by the opposite market impact on the related
debt. As of December 31, 2020, we had approximately $6.4 billion of variable rate indebtedness and interest rate swaps with a notional
value of $2.2 billion. Because we do not attempt to hedge all of our variable rate debt, we may incur higher interest costs for the
portion of our variable rate debt that is not hedged. Excluding debt covered by hedges, each quarter-point increase or decrease in the
interest rate on our variable rate debt would result in our interest expense changing by approximately $3.5 million per year.
Marketable Securities
At December 31, 2020, we held investments in marketable equity securities. These investments are classified as either
trading securities or available-for-sale securities and are recorded at fair value. These securities are subject to price risk. As of
December 31, 2020, the fair value of these investments was $88 million based on the quoted market value of the securities. The
potential loss in fair value resulting from a hypothetical decrease of 10% in quoted market values was approximately $9 million at
December 31, 2020.
59
Item 8. Financial Statements and Supplementary Data
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of IQVIA Holdings Inc. (the “Company”) is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020.
In making this assessment, management used the framework established in Internal Control—Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a result of this assessment and based on the
criteria in the COSO framework, management has concluded that, as of December 31, 2020, the Company’s internal control over
financial reporting was effective.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
/s/ Ari Bousbib
Ari Bousbib
Chairman and Chief Executive Officer
(Principal Executive Officer)
February 12, 2021
/s/ Ronald E. Bruehlman
Ronald E. Bruehlman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
60
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of IQVIA Holdings Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of IQVIA Holdings Inc. and its subsidiaries (the “Company”) as of
December 31, 2020 and 2019, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and
cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement
schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also
have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal
Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in
2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error
or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
61
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Revenue Recognition – Estimating Measure of Progress for Clinical Research Services
As described in Notes 1 and 20 to the consolidated financial statements, revenue of the Research & Development Solutions segment for
the year ended December 31, 2020, is $5,760 million, the majority of which relates to service contracts for clinical research that
represent a single performance obligation. The Company recognized revenue for these contracts over time using a cost-based input
method. 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). 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.
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.
/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
February 12, 2021
We have served as the Company’s auditor since 2002.
62
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
2020
2019
2018
11,088 $
10,412
(in millions, except per share data)
Revenues
Costs of revenue, exclusive of depreciation and amortization
Selling, general and administrative expenses
Depreciation and amortization
Restructuring costs
Income from operations
Interest income
Interest expense
Loss on extinguishment of debt
Other (income) expense, net
Income before income taxes and equity in earnings of unconsolidated
affiliates
Income tax expense
Income before equity in earnings (losses) of unconsolidated affiliates
Equity in earnings (losses) of unconsolidated affiliates
Net income
Net income attributable to non-controlling interests
Net income attributable to IQVIA Holdings Inc.
Earnings per share attributable to common stockholders:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
$
11,359 $
7,500
1,789
1,287
52
731
(6)
416
13
(65)
373
72
301
7
308
(29)
279
7,300
1,734
1,202
75
777
(9)
447
24
(37)
352
116
236
(9)
227
(36)
191
$
$
1.46 $
1.43 $
0.98 $
0.96 $
191.3
195.0
195.1
199.6
6,746
1,716
1,141
68
741
(8)
414
2
5
328
59
269
15
284
(25)
259
1.27
1.24
203.7
208.2
The accompanying notes are an integral part of these consolidated financial statements.
63
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
Net income
Comprehensive income adjustments:
Unrealized (losses) gains on derivative instruments, net of
income tax expense (benefit) of $(10), $4 and $(5)
Defined benefit plan adjustments, net of income tax (benefit) expense of
$(15), $5 and $(4)
Foreign currency translation, net of income tax expense
(benefit) of $(145), $(30) and $50
Reclassification adjustments:
Losses (gains) on derivative instruments included in net income, net of
income tax benefit of $3, $— and $1
Amortization of actuarial losses and prior service costs included in
net income
Comprehensive income
Comprehensive income attributable to non-controlling interests
Comprehensive income (loss) attributable to IQVIA Holdings Inc.
$
Year Ended December 31,
2020
2019
2018
$
308 $
227
$
284
(30)
(15)
(54)
(30)
1
(8)
183
(39)
(258)
10
—
417
(32)
385 $
(1)
—
142
(38)
104 $
(12)
1
8
(22)
(14)
The accompanying notes are an integral part of these consolidated financial statements.
64
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
Cash and cash equivalents
Trade accounts receivable and unbilled services, net
ASSETS
Prepaid expenses
Income taxes receivable
Investments in debt, equity and other securities
Other current assets and receivables
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Investments in debt, equity and other securities
Investments in unconsolidated affiliates
Goodwill
Other identifiable intangibles, net
Deferred income taxes
Deposits and other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
Unearned income
Income taxes payable
Current portion of long-term debt
Other current liabilities
Total current liabilities
Long-term debt, less current portion
Deferred income taxes
Operating lease liabilities
Other liabilities
Total liabilities
Commitments and contingencies (Note 1 and 12)
Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares authorized at
December 31, 2020 and 2019, $0.01 par value, 254.7 shares issued and 191.2 shares
outstanding at December 31, 2020; 253.0 shares issued and 192.3 shares outstanding
at December 31, 2019
Retained earnings
Treasury stock, at cost, 63.5 and 60.7 shares at December 31, 2020 and 2019,
respectively
Accumulated other comprehensive loss
Equity attributable to IQVIA Holdings Inc.’s stockholders
Non-controlling interests
Total stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2020
2019
$
1,814 $
2,410
159
56
88
563
5,090
482
471
78
84
12,654
5,205
114
386
24,564 $
2,813 $
1,252
102
149
242
4,558
12,384
338
371
633
$
$
837
2,582
138
56
62
451
4,126
458
496
65
87
12,159
5,514
119
227
23,251
2,512
1,014
108
100
211
3,945
11,545
646
396
456
18,284
16,988
11,095
1,277
(6,166)
(205)
6,001
279
6,280
24,564 $
$
11,049
998
(5,733)
(311)
6,003
260
6,263
23,251
The accompanying notes are an integral part of these consolidated financial statements.
65
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2020
2019
2018
$
308 $
227 $
284
(in millions)
Operating activities:
Net income
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation and amortization
Amortization of debt issuance costs and discount
Stock-based compensation
Loss on disposals of property and equipment, net
(Earnings) loss from unconsolidated affiliates
(Gain) loss on investments, net
Benefit from deferred income taxes
Changes in operating assets and liabilities:
Accounts receivable and unbilled services
Prepaid expenses and other assets
Accounts payable and accrued expenses
Unearned income
Income taxes payable and other liabilities
Net cash provided by operating activities
Investing activities:
Acquisition of property, equipment and software
Net cash paid for acquisition of businesses
Purchases of marketable securities, net
Investments in unconsolidated affiliates, net of payments received
(Investments in) proceeds from sale of equity securities
Other
Net cash used in investing activities
Financing activities:
Proceeds from issuance of debt
Payment of debt issuance costs
Repayment of debt
Proceeds from revolving credit facility
Repayment of revolving credit facility
(Payments) proceeds related to employee stock option plans
Repurchase of common stock
Distributions to non-controlling interest, net
Contingent consideration and deferred purchase price payments
Net cash used in financing activities
Effect of foreign currency exchange rate changes on cash
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
1,287
18
95
—
(7)
(25)
(176)
255
(146)
253
180
(83)
1,959
(616)
(177)
(9)
10
(2)
(2)
(796)
1,591
(33)
(864)
1,250
(1,635)
(44)
(447)
(13)
(22)
(217)
31
977
837
1,814 $
1,202
13
146
1
9
(43)
(157)
(122)
(92)
240
(2)
(5)
1,417
(582)
(588)
(3)
—
(22)
5
(1,190)
1,900
(47)
(899)
2,522
(2,776)
11
(949)
(18)
(20)
(276)
(5)
(54)
891
837 $
1,141
11
113
—
(15)
3
(177)
(297)
(66)
368
7
(118)
1,254
(459)
(309)
(4)
(17)
(23)
2
(810)
1,631
(22)
(732)
2,445
(2,329)
15
(1,405)
(31)
(24)
(452)
(60)
(68)
959
891
The accompanying notes are an integral part of these consolidated financial statements.
66
IQVIA HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Common
Stock Shares
Treasury
Stock Shares
Common
Stock
(in millions)
Balance, December 31, 2017
Issuance of common stock
Repurchase of common stock
Stock-based compensation
Distributions to non-controlling interest
Net income
Unrealized gain on derivative
instruments, net of tax
Defined benefit plan adjustments, net of
tax
Foreign currency translation, net of tax
Reclassification adjustments, net of tax
Other
Balance, December 31, 2018
Issuance of common stock
Repurchase of common stock
Stock-based compensation
Distributions to non-controlling interest
Net income
Unrealized losses on derivative
instruments, net of tax
Defined benefit plan adjustments, net of
tax
Foreign currency translation, net of tax
Reclassification adjustments, net of tax
Balance, December 31, 2019
Issuance of common stock
Repurchase of common stock
Stock-based compensation
Distributions to non-controlling interests,
net
Net income
Unrealized losses on derivative
instruments, net of tax
Defined benefit plan adjustments, net of
tax
Foreign currency translation, net of tax
Reclassification adjustments, net of tax
249.5
2.0
—
—
—
—
—
—
—
—
—
251.5
1.5
—
—
—
—
—
—
—
—
253
1.7
—
—
—
—
—
—
—
—
Additional
Paid-In Capital
10,780
10
—
108
—
—
—
—
—
—
—
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
(Loss) Income
Non-
controlling
Interests
538
—
—
—
—
259
—
—
—
—
10
(3,374)
—
(1,396)
—
—
—
—
—
—
—
—
49
—
—
—
—
—
1
(8)
(255)
(11)
—
249
—
—
—
(31)
25
—
—
(3)
—
—
Total
8,244
11
(1,396)
108
(31)
284
1
(8)
(258)
(11)
10
(41.4)
—
(12.6)
—
—
—
—
—
—
—
—
2
1
—
—
—
—
—
—
—
—
—
(54.0) $
3 $
10,898 $
807 $
(4,770) $
(224) $
240 $
6,954
—
(6.7)
—
—
—
—
—
—
— $
(60.7) $
—
(2.8)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11
—
137
—
—
—
—
—
— $
3 $
—
—
— $
11,046 $
(44)
—
—
—
—
—
—
—
—
—
90
—
—
—
—
—
—
—
—
—
—
191
—
—
—
— $
998 $
—
—
—
—
279
—
—
—
—
—
(963)
—
—
—
—
—
—
— $
(5,733) $
—
(433)
—
—
—
—
—
—
—
—
—
—
—
—
(15)
(30)
—
—
—
(18)
36
—
—
(41)
(1) $
(311) $
—
2
— $
260 $
—
—
—
—
—
(30)
(54)
180
10
—
—
(13)
29
—
—
3
—
11
(963)
137
(18)
227
(15)
(30)
(39)
(1)
6,263
(44)
(433)
90
(13)
308
(30)
(54)
183
10
Balance, December 31, 2020
254.7
(63.5) $
3 $
11,092 $
1,277 $
(6,166) $
(205) $
279 $
6,280
The accompanying notes are an integral part of these consolidated financial statements.
67
IQVIA HOLDINGS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
The Company
IQVIA Holdings Inc. (together with its subsidiaries, the “Company” or “IQVIA”) is a leading global provider of advanced
analytics, technology solutions, and clinical research services to the life sciences industry. IQVIA creates intelligent connections across
all aspects of healthcare through its analytics, transformative technology, big data resources and extensive domain expertise. IQVIA
Connected Intelligence™ delivers powerful insights with speed and agility — enabling customers to accelerate the clinical development
and commercialization of innovative medical treatments that improve healthcare outcomes for patients. With approximately 70,000
employees, the Company conducts business in more than 100 countries.
IQVIA is a global leader in protecting individual patient privacy. The company uses a wide variety of privacy-enhancing
technologies and safeguards to protect individual privacy while generating and analyzing information on a scale that helps healthcare
stakeholders identify disease patterns and correlate with the precise treatment path and therapy needed for better outcomes. IQVIA’s
insights and execution capabilities help biotech, medical device and pharmaceutical companies, medical researchers, government
agencies, payers and other healthcare stakeholders tap into a deeper understanding of diseases, human behaviors and scientific advances,
in an effort to advance their path toward cures.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts and operations of the Company, its subsidiaries and
investments in which the Company has control. Amounts pertaining to the non-controlling ownership interests held by third parties in
the operating results and financial position of the Company’s majority-owned subsidiaries are reported as non-controlling interests.
Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles in the United States of
America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
and the disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of
revenues and expenses during the period. These estimates are based on historical experience and various other assumptions believed
reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes changes to the estimates and
related disclosures as experience develops or new information becomes known. Actual results may differ from those estimates.
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. Assets and liabilities recorded
in foreign currencies on the books of foreign subsidiaries are translated at the exchange rate on the balance sheet date. Revenues, costs
and expenses are translated at average rates of exchange during the year. Translation adjustments resulting from this process are
charged or credited to the accumulated other comprehensive (loss) income (“AOCI”) component of stockholders’ equity. 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. Accordingly, exchange rate fluctuations during this period may affect the
Company’s profitability with respect to such contracts.
For operations outside the United States that are considered to be highly inflationary or where the United States dollar is
designated as the functional currency, monetary assets and liabilities are remeasured using end-of-period exchange rates, whereas
nonmonetary accounts are remeasured using historical exchange rates, and all remeasurement and transaction adjustments are
recognized in other expense (income), net.
68
Cash Equivalents
The Company considers all highly liquid investments with an initial maturity of three months or less when purchased to be
cash equivalents.
Derivatives
The Company uses derivative instruments to manage exposures to interest rates and foreign currencies. Derivatives are
recorded on the balance sheet at fair value at each balance sheet date utilizing pricing models for non-exchange-traded contracts.
At inception, the Company designates whether or not the derivative instrument is an effective hedge of an asset, liability or
firm commitment which is then classified as either a cash flow hedge or a fair value hedge. If determined to be an effective cash flow
hedge, changes in the fair value of the derivative instrument are recorded as a component of AOCI until realized. The Company
includes the impact from these hedges in the same line item as the hedged item on the consolidated statements of cash flows. Changes
in fair value of effective fair value hedges are recorded in earnings as an offset to the changes in the fair value of the related hedged
item. Hedge ineffectiveness, if any, is immediately recognized in earnings. Changes in the fair values of derivative instruments that are
not an effective hedge are recognized in earnings. When it is probable that a hedged forecasted transaction will not occur, the Company
discontinues hedge accounting for the affected portion of the forecasted transaction and reclassifies gains or losses that were
accumulated in AOCI to earnings in other expense (income), net for foreign exchange derivatives and interest expense for interest rate
derivatives on the consolidated statements of income. Cash flows are classified consistent with the underlying hedged item. The
Company has entered, and may in the future enter, into derivative contracts (caps, swaps, forwards, calls or puts, warrants, for
example) related to its debt and forecasted foreign currency transactions.
Business Combinations
The Company uses the acquisition method to account for business combinations, and accordingly, the identifiable assets
acquired, the liabilities assumed and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date
of the acquisition. The Company uses significant judgments, estimates and assumptions in determining the estimated fair value of
assets acquired, liabilities assumed and non-controlling interest including expected future cash flows, discount rates that reflect the risk
associated with the expected future cash flows and estimated useful lives.
The Company 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.
Long-Lived Assets
Property and equipment are stated at cost and are depreciated using the straight-line method over the shorter of the asset’s
estimated useful life or the lease term, if related to leased property, as follows:
Buildings and leasehold improvements
Equipment
Furniture and fixtures
Transportation equipment
3 - 40 years
3 - 10 years
5 - 10 years
3 - 20 years
Definite-lived identifiable intangible assets are amortized primarily using an accelerated method that reflects the pattern in
which the Company expects to benefit from the use of the asset over its estimated remaining useful life as follows:
Trademarks and trade names
Contract backlog and client relationships
Software and related assets
Databases
Non-compete agreements and other
69
1 - 17 years
1 - 25 years
1 - 10 years
1 - 9 years
2 - 5 years
Included in software and related assets is the capitalized cost of internal-use software used in supporting the Company’s
business. Qualifying costs incurred during the application development stage are capitalized and amortized over their estimated useful
lives. 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 $267 million,
$196 million and $179 million of amortization expense in 2020, 2019 and 2018, respectively, related to software and related assets.
The carrying values of property, equipment and intangible and other long-lived assets are reviewed for recoverability if the
facts and circumstances suggest that a potential impairment may have occurred. 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 2020, 2019 and 2018.
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 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.
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. The customer is able
to benefit from the provision of data as it is received. The Company’s subscription arrangements typically have terms ranging from one
to three years and are generally non-cancelable and do not contain refund-type provisions. Technology services offerings may contain
multiple performance obligations consisting of a mix of small and large-scale services and consulting projects, multi-year outsourcing
contracts and Software-as-a- Service (“SaaS”) arrangements. These arrangements typically have terms ranging from several weeks to
three years, with a majority having terms of one year or less. For arrangements that include multiple performance obligations, the
transaction price is allocated to the identified performance obligations based on their relative standalone selling prices. For these
contracts, the standalone selling prices are based on the Company’s normal pricing practices when sold separately with consideration
of market conditions and other factors, including customer demographics and geographic location. Revenues for services engagements
where the transfer of control occurs ratably over time are recognized on a straight-line basis over the term of the arrangement.
Revenues from time and material contracts are recognized based on hours as the services are provided. Revenues from fixed price ad
hoc services and consulting contracts are recognized over the contract term based on the ratio of the number of hours incurred for
services provided during the period compared to the total estimated hours to be incurred over the entire arrangement (hours-based).
Technology services offerings meet the over time criterion, as another party would not need to substantially re-perform the work
already completed to satisfy the remaining obligations if the services were migrated.
The majority of the Company’s contracts within the Research & Development Solutions segment are service contracts for
clinical research that represent a single performance obligation. The Company provides a significant integration service resulting in a
combined output, which is clinical trial data that meets the relevant regulatory standards and can be used by the customer to progress to
the next phase of a clinical trial or solicit approval of a treatment by the applicable regulatory body. 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.
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). This cost-based method of revenue recognition requires the
Company to make estimates of costs to complete its projects on an ongoing basis. Significant judgment is required to evaluate
70
assumptions related to these estimates. The effect of revisions to estimates related to the transaction price or costs to complete a project
are recorded in the period in which the estimate is revised. Most contracts may be terminated upon 30 to 90 days notice by the
customer; however, in the event of termination, most contracts require payment for services rendered through the date of termination,
as well as for subsequent services rendered to close out the contract.
The majority of revenue in our Contract Sales & Medical Solutions segment is from contract sales to the biopharmaceutical
industry and broader healthcare market and recognized over time using a single measure of progress dependent on the performance
obligation. 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; recruiting based on candidates recruited; sales force automation set-up based on hours worked; and sales force
automation hosting and maintenance based on usage. These services meet the over time criterion as the customer consumes the benefit
as activities are performed and another party would not need to substantially re-perform the work already completed to satisfy the
remaining obligations if the services were migrated to another party.
Variable Consideration
In some cases, contracts provide for variable consideration that is contingent upon the occurrence of uncertain future events,
such as performance incentives (including royalty payments or penalty clauses that can either increase or decrease the transaction
price). Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration.
Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue
recognized will not occur when the uncertainty associated with the variable consideration is resolved. The estimate of variable
consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of
its anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company and
reevaluated each reporting period.
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. 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.
The Company controls the good or service and has inventory risk on contractually reimbursable expenses, as sometimes the Company
is unable to obtain reimbursement from the customer for costs incurred.
Change Orders
Changes in the scope of work are common, especially under long-term contracts, and generally result in a change in
transaction price. Change orders are evaluated on a contract-by-contract basis to determine if they should be accounted for as a new
contract or as part of the existing contract. 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; (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; (iii) reimbursed expenses that are comprised principally of payments to investigators who
oversee clinical trials and travel expenses for the Company’s clinical monitors and sales representatives; and (iv) other expenses
directly related to service contracts such as courier fees, laboratory supplies, professional services and travel expenses.
71
Trade Receivables, Unbilled Services and Unearned Income
In general, billings and payments are established by contractual provisions including predetermined payment schedules,
which may or may not correspond to the timing of the transfer of control of the Company’s services under the contract. In general, the
Company’s intention in its invoicing (payment terms) is to maintain cash neutrality over the life of the contract. Generally, the payment
terms are 30 to 90 days based on contracts. Upfront payments, when they occur, are intended to cover certain expenses the Company
incurs at the beginning of the contract. 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 the condensed consolidated balance sheet
as the Company expects to recognize the associated revenue in less than one year.
Restructuring Costs
Restructuring costs, which primarily include termination benefits and facility closure costs, are recorded at estimated value.
Key assumptions in determining the restructuring costs include the terms and payments that may be negotiated to terminate certain
contractual obligations and the timing of employees leaving the Company.
Debt Fees
Fees incurred to issue debt are generally deferred and amortized as a component of interest expense over the estimated term
of the related debt using the effective interest rate method.
Contingencies
The Company records accruals for claims, suits, investigations and proceedings when it is probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. The Company reviews claims, suits, investigations and proceedings at
least quarterly and records or adjusts accruals related to such matters to reflect the impact and status of any settlements, rulings, advice
of counsel or other information pertinent to a particular matter. Legal costs associated with contingencies are charged to expense as
incurred.
The Company is party to legal proceedings incidental to its business. 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.
Income Taxes
Certain items of income and expense are not recognized on the Company’s income tax returns and financial statements in the
same year, which creates timing differences. The income tax effect of these timing differences results in (1) deferred income tax assets
that create a reduction in future income taxes and (2) deferred income tax liabilities that create an increase in future income taxes.
Recognition of deferred income tax assets is based on management’s belief that it is more likely than not that the income tax benefit
associated with certain temporary differences, income tax operating loss and capital loss carryforwards and income tax credits, would
be realized. The 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. The Company determines the amount of the valuation allowance
based, in part, on the Company’s assessment of future taxable income and in light of the Company’s ongoing income tax strategies. If
the estimate of future taxable income or tax strategies changes at any time in the future, the Company would record an adjustment to
our valuation allowance. Recording such an adjustment could have a material effect on the Company’s financial condition or results of
operations.
Income tax expense is based on the distribution of profit before income tax among the various taxing jurisdictions in which
we operate, adjusted as required by the income tax laws of each taxing jurisdiction. Changes in the distribution of profits and losses
72
among taxing jurisdictions may have a significant impact on our effective income tax rate. The Company does not consider the
undistributed earnings of our foreign subsidiaries to be indefinitely reinvested outside of the United States.
Pensions and Other Postretirement Benefits
The Company provides retirement benefits to certain employees, including defined benefit pension plans and postretirement
medical plans. The determination of benefit obligations and expense is based on actuarial models. In order to measure benefit costs and
obligations using these models, assumptions are made with regard to the discount rate, expected return on plan assets, cash balance
crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost trend
rates are a key assumption used exclusively in determining costs for the Company’s postretirement health care and life insurance
benefit plans.
Stock-based Compensation
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. The Company does not currently anticipate paying dividends. The expected term represents the
period of time the grants are expected to be outstanding. The risk- free interest rate is based on the United States Treasury yield curve
in effect at the time of the grant.
The Company values its stock-based compensation for restricted stock awards and restricted stock units based on the closing
market price of the Company’s common stock on the date of grant. The Company accounts for its stock-based compensation for
performance awards based on the closing market price of the Company’s common stock on the date of grant and for performance
awards that include market conditions based upon the Monte Carlo simulation model.
Leases
The Company determines if an arrangement is a lease at inception and reassesses if there are changes in terms and conditions
of the contract. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating
lease liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on
the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases
do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement
date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made before
lease commencement and initial direct costs and excludes lease incentives. The Company’s lease terms may include options to extend
or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is
recognized on a straight-line basis over the lease term.
The Company has lease agreements with lease and non-lease components that the Company has elected to account for as
single lease components.
On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method as of the beginning of
the period of adoption. Therefore, on January 1, 2019, the Company recognized and measured leases without revising the historical
comparative period information or disclosures.
Earnings Per Share
The calculation of earnings per share is based on the weighted average number of common shares or common stock
equivalents outstanding during the applicable period. 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. Employee equity share options, restricted stock
units, restricted stock, performance awards and similar equity instruments granted by the Company are treated as potential common
shares outstanding in computing diluted earnings per share. Diluted shares outstanding are calculated based on the average share price
for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for
73
exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount
of benefits that would be recorded in additional paid-in capital when the award becomes deductible for tax purposes are assumed to be
used to repurchase shares.
Equity Method Investments
The Company’s investments in and advances to unconsolidated affiliates are accounted for under the equity method if the
Company exercises significant influence or has an investment in a limited partnership that is considered to be greater than minor. These
investments and advances are classified as investments in and advances to unconsolidated affiliates on the accompanying consolidated
balance sheets. The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments
in equity in earnings (losses) of unconsolidated affiliates on the accompanying consolidated statements of income. The Company
reviews its investments in and advances to unconsolidated affiliates for impairment whenever events or changes in circumstances
indicate that the carrying amounts may not be recoverable.
Treasury Stock
The Company records treasury stock purchases under the cost method. Upon reissuance of treasury stock, amounts in excess
of the acquisition cost are credited to additional paid in capital. If the Company reissues treasury stock at an amount below its
acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference
between the acquisition cost and the reissue price, this shortfall is recorded in retained earnings.
Recently Issued Accounting Standards
Accounting pronouncements recently adopted
In August 2018, the FASB issued new accounting guidance that clarifies and aligns the accounting for implementation costs
for hosting arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use
software. The Company adopted this new accounting guidance on January 1, 2020. The adoption of this new accounting guidance did
not have a material effect on the Company’s consolidated financial statements.
In August 2018, the FASB issued new accounting guidance that modifies the disclosure requirements in Topic 820, Fair Value
Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure
requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized
gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of
the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value
measurements. This new accounting guidance also modifies the disclosure requirements for employers that sponsor defined benefit
pension or other postretirement plans. The Company adopted this new accounting guidance on January 1, 2020. The adoption of this new
accounting guidance did not have a material effect on the Company’s consolidated financial statements.
In January 2017, the FASB issued new accounting guidance that simplifies the measurement of goodwill by eliminating the
step two impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of goodwill with the
carrying amount of that goodwill. The new guidance requires a comparison of the Company’s fair value of a reporting unit with the
carrying amount and the Company is required to recognize an impairment charge for the amount by which the carrying amount exceeds
the fair value. The Company adopted this new accounting guidance on January 1, 2020. The adoption of this new accounting guidance
did not have a material effect on the Company’s consolidated financial statements.
In June 2016, the FASB issued a new accounting standard intended to provide financial statement users with more decision-
useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard
replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires
consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this
new accounting guidance on January 1, 2020. The adoption of this guidance did not have a material effect on the Company’s
consolidated financial statements. This is based on factors including the Company's assessment of historical losses, client's
creditworthiness and the fact that the Company's trade receivables are short term in duration.
74
Accounting pronouncements issued but not adopted as of December 31, 2020
In March 2020, the FASB issued new accounting guidance that provides optional expedients and exceptions for applying U.S.
GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate
that is expected to be discontinued. The new accounting guidance is effective for the Company as of March 12, 2020 through
December 31, 2022. The Company is currently evaluating the impact of this new accounting guidance on its credit arrangements and
derivatives that reference LIBOR. The Company does not expect the new accounting guidance to have a material effect on the
Company’s consolidated financial statements.
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 new accounting guidance will be effective for the Company on January 1, 2021 on a prospective basis. Early adoption is
permitted. The Company does not expect the new accounting guidance to have a material effect on the Company’s consolidated financial
statements.
In December 2019, the FASB issued new accounting guidance to clarify and simplify the accounting for income taxes. Changes
under the new guidance includes eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology
for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new
accounting guidance will be effective for the Company on January 1, 2021. Early adoption is permitted. The Company does not expect
the new accounting guidance to have a material effect on the Company’s consolidated financial statements.
2. Revenues by Geography, Concentration of Credit Risk and Remaining Performance Obligations
The Company attributes revenues to geographical region based upon where the services are performed. The following tables
represent revenues by geographical region and reportable segment for the years ended December 31, 2020, 2019 and 2018:
(in millions)
Revenues:
Americas
Europe and Africa
Asia-Pacific
Total revenues
(in millions)
Revenues:
Americas
Europe and Africa
Asia-Pacific
Total revenues
December 31, 2020
Technology &
Analytics
Solutions
Research &
Development
Solutions
Contract Sales &
Medical
Solutions
Total
$
$
2,413 $
2,680 $
1,844
601
4,858 $
1,667
1,413
5,760 $
326 $
184
231
741 $
5,419
3,695
2,245
11,359
December 31, 2019
Technology &
Analytics
Solutions
Research &
Development
Solutions
Contract Sales &
Medical
Solutions
Total
$
$
2,370 $
2,693 $
399 $
1,543
573
1,734
1,361
200
215
5,462
3,477
2,149
4,486 $
5,788 $
814 $
11,088
75
(in millions)
Revenues:
Americas
Europe and Africa
Asia-Pacific
Total revenues
December 31, 2018
Technology &
Analytics
Solutions
Research &
Development
Solutions
Contract Sales &
Medical
Solutions
Total
$
$
2,087 $
2,553 $
358 $
1,520
530
1,693
1,219
235
217
4,998
3,448
1,966
4,137 $
5,465 $
810 $
10,412
No individual country, except for the United States and the United Kingdom, accounted for 10% or more of total revenues for
the year ended December 31, 2020, 2019 and 2018. For the year ended December 31, 2020, revenues in the United States and the
United Kingdom accounted for 35% and 10% of total revenue, respectively. For the year ended December 31, 2019, revenues in the
United States and the United Kingdom accounted for 45% and 10% of total revenue, respectively. For the year ended December 31,
2018, revenues in the United States and the United Kingdom accounted for 43% and 11% of total revenue, respectively.
No individual customer represented 10% or more of total revenues for the years ended December 31, 2020, 2019 and 2018.
Transaction Price Allocated to the Remaining Performance Obligations
As of December 31, 2020, approximately $25.3 billion of revenue is expected to be recognized in the future from remaining
performance obligations. The Company expects to recognize revenue on approximately 30% of these remaining performance
obligations over the next twelve months, with the balance recognized thereafter. 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.
3. Trade Accounts Receivable, Unbilled Services and Unearned Income
Trade accounts receivables and unbilled services consist of the following:
(in millions)
Trade accounts receivable
Billed
Unbilled services
Trade accounts receivable and unbilled services
Allowance for doubtful accounts
Trade accounts receivable and unbilled services, net
Unbilled services and unearned income was as follows:
(in millions)
Unbilled services
Unearned income
Net balance
December 31,
2020
2019
$
1,181 $
1,263
2,444
(34)
$
2,410 $
1,312
1,286
2,598
(16)
2,582
December 31,
2020
1,263
(1,252)
11
$
$
2019
1,286
(1,014)
272
Change
(23)
(238)
(261)
$
$
$
$
Unbilled services, which is comprised of approximately 60% of unbilled receivables and 40% of contract assets as of
December 31, 2020, decreased by $23 million as compared to December 31, 2019. 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 $238 million over the same period resulting in a decrease of $261
million in the net balance of unbilled services and unearned income between December 31, 2020 and 2019. Decrease in the net balance
76
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, 2020, 2019 and 2018.
4. Investments
Debt, Equity and Other Securities
Current
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.
Long-term
The Company’s long-term equity investments (except those accounted for under the equity method, those that result in
consolidation of the investee and certain other investments) are measured at fair value and any changes in fair value are recognized in
net income at the end of each reporting period. For equity investments that do not have readily determinable fair values and do not
qualify for the existing practical expedient in Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement” (“ASC
820”) to estimate fair value using the net asset value per share of the investment, the Company applies a new measurement alternative
and measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly
transactions for the identical or a similar investment of the same issuer at each reporting period.
Unconsolidated Affiliates
The Company accounts for its investments in and advances to unconsolidated affiliates under the equity method of
accounting and records its pro rata share of its losses or earnings from these investments in equity in earnings (losses) of
unconsolidated affiliates. The following is a summary of the Company’s investments in and advances to unconsolidated affiliates:
(in millions)
NovaQuest Pharma Opportunities Fund III, L.P. (“NQ Fund III”)
NovaQuest Pharma Opportunities Fund IV, L.P. (“NQ Fund IV”)
NovaQuest Pharma Opportunities Fund V, L.P. (“NQ Fund V”)
NovaQuest Private Equity Fund I, L.P. (“NQ PE Fund I”)
NostraData Pty Ltd. (“NostraData”)
Inteliquet (“Inteliquet”)
Helparound ("Helparound")
Longwood Fund V, L.P. ("Longwood")
Other
Variable Interest Entities
December 31,
2020
2019
7 $
8
17
3
18
16
3
1
11
84 $
19
8
13
4
8
18
4
—
13
87
$
$
As of December 31, 2020, the Company’s investments in unconsolidated variable interest entities (“VIEs”) and its estimated
maximum exposure to loss were as follows:
77
(in millions)
NQ Fund III
NQ Fund IV
NQ Fund V
NQ PE Fund I
Longwood
Pappas Life Science Ventures V, L.P.
5. Derivatives
Foreign Exchange Risk Management
Investments in
Unconsolidated
VIEs
Maximum
Exposure to Loss
$
7 $
8
17
3
1
1
$
37 $
13
11
47
5
10
2
88
The Company transacts business in more than 100 countries and is subject to risks associated with fluctuating foreign
exchange rates. Accordingly, the Company enters into foreign currency forward contracts to (i) hedge certain forecasted foreign
exchange cash flows arising from service contracts (“Service Contract Hedging”) and (ii) hedge non-United States dollar anticipated
intercompany reseller fees (“Reseller Hedging”). It is the Company’s policy to enter into foreign currency transactions only to the
extent necessary to reduce earnings and cash flow volatility associated with foreign exchange rate movements. The Company does not
enter into foreign currency transactions for investment or speculative purposes. The principal currencies hedged in 2020 were the
British Pound and the Japanese Yen.
Service Contract Hedging and Reseller Hedging contracts are designated as cash flow hedges and are carried at fair value,
with changes in the fair value recorded to AOCI. 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 2021.
As of December 31, 2020 and 2019, the Company had open Service Contract Hedging and Reseller Hedging contracts to
hedge certain forecasted foreign currency cash flow transactions occurring in 2021 and 2020 with notional amounts totaling $70
million and $148 million, respectively. For accounting purposes these hedges are considered highly effective. As of December 31,
2020 and 2019, the Company had recorded gross unrealized gains (losses) of $5 million and $— million and $4 million and less than
$(1) million, respectively, related to these contracts. Upon expiration of the hedge instruments in 2020, the Company reclassified the
unrealized holding gains and losses on the derivative instruments included in AOCI into earnings. The unrealized gains (losses) are
included in other current assets and liabilities on the accompanying consolidated balance sheets as of December 31, 2020 and 2019.
Interest Rate Risk Management
The Company has entered into interest rate swap agreements for purposes of managing its exposure to interest rate
fluctuations.
In April 2014, IMS Health entered into United States dollar and Euro denominated interest rate swap agreements (“2014
Swaps”) to hedge interest rate exposure on notional amounts of approximately $600 million of its borrowings. The 2014 Swaps
commenced between April and June 2014 and expire at various times through March 2021. As of December 31, 2020, only one of the
2014 Swaps remain unexpired, with a notional value of $356 million. On this agreement, the Company pays a fixed rate of 1.6% and
receives a variable rate of interest equal to the greater of three-month Euro Interbank Offered Rate (“EURIBOR”) or the equivalent to
LIBOR, and 1%. During 2017, the 2014 Swaps ceased to be considered highly effective for accounting purposes and as such, the
Company discontinued hedge accounting and prospective changes in the fair value of the Swaps are recognized in earnings.
On June 3, 2015, the Company entered into seven forward starting interest rate swaps (“2015 Swaps”) in an effort to limit its
exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below). Interest on the swaps began
accruing on June 30, 2016, and the interest rate swaps expired at various times through March 2020. As of December 31, 2020, none
78
of the 2015 Swaps were still outstanding. The Company paid a fixed rate of 2.1% and received a variable rate of interest equal to the
three-month LIBOR on these agreements.
On July 19, 2018, the Company entered into two forward starting interest rate swaps (“2018 Swaps”) with a total notional
value of $500 million in an effort to limit its exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as
defined below). Interest on the 2018 Swaps began accruing on June 28, 2019 and the interest rate swaps expire on June 28, 2024. The
Company pays a fixed rate of 3.0% and receives a variable rate of interest equal to the three-month LIBOR on the 2018 Swaps.
On March 27, 2020, the Company entered into an interest rate swap with a notional value of $1 billion in an effort to limit its
exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below). Interest on the swap began
accruing on March 31, 2020 and the swap expires on March 31, 2023. The Company pays a fixed rate of .56% and receives a variable
rate of interest equal to the one-month LIBOR on the swap.
On June 4, 2020, the Company entered into an interest rate swap with a notional value of $300 million in an effort to limit its
exposure to changes in the variable interest rate on its Senior Secured Credit Facilities (as defined below). Interest on the swap began
accruing on June 30, 2020 and the swap expires on June 28, 2024. The Company pays a fixed rate of .54% and receives a variable rate
of interest equal to the three-month LIBOR on the swap.
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.
The fair value of these interest rate swaps represents the present value of the anticipated net payments the Company will
make to the counterparty, which, when they occur, are reflected as interest expense on the consolidated statements of income. These
interest rate swaps will result in a total debt mix of approximately 66% fixed rate debt and 34% variable rate debt.
Net Investment Risk Management
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. As of December 31, 2020, these borrowings (net of original issue discount) were €5,323
million ($6,528 million). The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in
the cumulative translation adjustment component of AOCI with the related offset in long-term debt. Those amounts would be
reclassified from AOCI to earnings upon the sale or substantial liquidation of these net investments. The amount of foreign exchange
losses related to the net investment hedge included in the cumulative translation adjustment component of AOCI for the year ended
December 31, 2020 was $561 million.
The fair values of the Company’s derivative instruments and the line items on the accompanying consolidated balance sheets
to which they were recorded are summarized in the following table:
(in millions)
Derivatives designated as
hedging instruments:
Balance Sheet Classification
Assets
Liabilities
Notional
Assets
Liabilities
Notional
December 31, 2020
December 31, 2019
Foreign exchange forward
contracts
Other current assets and
liabilities
$
Interest rate swaps
Other assets and liabilities
Derivatives not designated as
hedging instruments:
Interest rate swaps
Total derivatives
Other liabilities
5
—
—
— $
70 $
4 $
— $
55
1,800
—
1
56
356
—
$
4 $
27
3
30
148
875
325
$
5 $
79
The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive (loss) income is summarized in the
following table:
(in millions)
Foreign exchange forward contracts
Interest rate derivatives
Total
Year Ended December 31,
2020
2019
2018
$
$
1 $
(28)
(27) $
2 $
(22)
(20) $
(9)
(6)
(15)
The Company expects approximately $14 million of pre-tax unrealized losses related to its foreign exchange contracts and
interest rate derivatives included in AOCI at December 31, 2020 to be reclassified into earnings within the next twelve months. The
total amount of cash flow hedge effect on the income statement is immaterial for year ended December 31, 2020.
6. Fair Value Measurements
The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair
value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:
•
•
•
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets
and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data.
Level 3—Unobservable inputs that are supported by little or no market activity. This includes certain pricing
models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximated their fair values at
December 31, 2020 and 2019 due to their short-term nature. At December 31, 2020 and 2019, the fair value of total debt approximated
$12,746 million and $11,925 million, respectively, as determined under Level 1 and Level 2 measurements for these financial
instruments.
Recurring Fair Value Measurements
The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured and reported
at fair value on a recurring basis as of December 31, 2020:
(in millions)
Assets:
Marketable securities
Derivatives
Total
Liabilities:
Derivatives
Contingent consideration
Total
Level 1
Level 2
Level 3
Total
122 $
—
122 $
— $
—
— $
— $
5
5 $
56 $
—
56 $
— $
—
— $
— $
119
119 $
122
5
127
56
119
175
$
$
$
$
80
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, 2019:
(in millions)
Assets:
Marketable securities
Derivatives
Total
Liabilities:
Derivatives
Contingent consideration
Total
Level 1
Level 2
Level 3
Total
$
$
$
$
79 $
—
79 $
— $
—
— $
— $
4
4 $
30 $
—
30 $
— $
—
— $
— $
113
113 $
79
4
83
30
113
143
Below is a summary of the valuation techniques used in determining fair value:
Marketable securities—The Company values trading and available-for-sale securities using the quoted market value of the
securities held.
Derivatives—Derivatives consist of foreign exchange contracts and interest rate swaps. The fair value of foreign exchange
contracts is based on observable market inputs of spot and forward rates or using other observable inputs. The fair value of the interest
rate swaps is the estimated amount that the Company would receive or pay to terminate such agreements, taking into account market
interest rates and the remaining time to maturities or using market inputs with mid-market pricing as a practical expedient for bid-ask
spread.
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.
The following table summarizes the changes in Level 3 financial assets and liabilities measured on a recurring basis for the
year ended December 31,:
(in millions)
Balance as of January 1
Business combinations
Contingent consideration paid
Revaluations included in earnings and foreign currency translation adjustments
Balance as of December 31,
Contingent Consideration
2020
2019
2018
$
$
113 $
47
(22)
(19)
119 $
123 $
40
(46)
(4)
113 $
69
53
(24)
25
123
The Company used the following key assumptions when estimating the fair value of contingent considerations:
Unobservable Input
Revenue target
EBITDA target
Operational target
Weighted average
probability of target
achievement
82%
92%
91%
Range of potential
payment
0%-100%
0%-100%
0%-100%
The current portion of contingent consideration is included within accrued expenses and the long-term portion is included
within other liabilities on the accompanying consolidated balance sheets. Revaluations of contingent consideration are recognized in
other expense (income), net on the accompanying consolidated statements of income. A change in significant unobservable inputs
above could result in a significantly higher or lower fair value measurement of contingent consideration.
81
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 and when a triggering event occurs, and goodwill and 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, 2020, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaled
approximately $17,987 million and were identified as Level 3. These assets are comprised of cost and equity method investments of
$128 million, goodwill of $12,654 million and other identifiable intangibles, net of $5,205 million.
Cost and Equity Method Investments—The inputs available for valuing investments in non-public portfolio companies are
generally not easily observable. The valuation of non-public investments requires judgment by the Company due to the absence of
quoted market values, inherent lack of liquidity and the long-term nature of such assets. When a triggering event occurs, the Company
considers a wide range of available market data when assessing the estimated fair value. Such market data includes observations of the
trading multiples of public companies considered comparable to the private companies being valued as well as publicly disclosed
merger transactions involving comparable private companies. In addition, valuations are adjusted to account for company-specific
issues, the lack of liquidity inherent in a non-public investment and the fact that comparable public companies are not identical to the
companies being valued. Such valuation adjustments are necessary because in the absence of a committed buyer and completion of due
diligence similar to that performed in an actual negotiated sale process, there may be company-specific issues that are not fully known
that may affect value. Further, a variety of additional factors are reviewed by the Company, including, but not limited to, financing and
sales transactions with third parties, current operating performance and future expectations of the particular investment, changes in
market outlook and the third-party financing environment. Because of the inherent uncertainty of valuations, estimated valuations may
differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could
be material.
Goodwill—Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and
intangible net assets resulting from business combinations. On an annual basis and if a triggering event occurs, the Company performs
a qualitative analysis to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its book
value. This includes a qualitative analysis of macroeconomic conditions, industry and market considerations, internal cost factors,
financial performance, fair value history and other company specific events. If this qualitative analysis indicates that it is more likely
than not that the estimated fair value is less than the book value for the respective reporting unit, the Company determines whether the
estimated fair value of the reporting unit is in excess of its carrying value. If the carrying value of the net assets assigned to the
reporting unit exceeds the estimated fair value of the reporting unit, the Company compares the fair value with the carrying amount and
recognizes an impairment charge for the amount by which the carrying amount exceeds the fair value. 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. See Note 8 for additional information.
Indefinite-lived Intangible Asset—If a triggering event occurs and a qualitative analysis indicates that it is more likely than
not that the estimated fair value is less than the carrying value of an indefinite-lived intangible asset, the Company determines the
estimated fair value of the indefinite-lived intangible asset (trade name) by determining the present value of the estimated royalty
payments on an after-tax basis that it would be required to pay the owner for the right to use such trade name. If the carrying amount
exceeds the estimated fair value, an impairment loss is recognized in an amount equal to the excess.
7. Property and Equipment
The major classes of property and equipment were as follows:
82
(in millions)
Land, buildings and leasehold improvements
Equipment
Furniture and fixtures
Transportation equipment
Property and equipment, gross
Less accumulated depreciation
Property and equipment, net
Property and equipment depreciation expense was as follows:
(in millions)
Depreciation expense
8. Goodwill and Identifiable Intangible Assets
December 31,
2020
2019
$
$
351 $
657
76
71
1,155
(673)
482 $
331
570
81
73
1,055
(597)
458
Year Ended December 31,
2020
2019
2018
134
128
125
As of December 31, 2020, the Company has approximately $5,205 million of identifiable intangible assets, of which
approximately $18 million, relating to a trade name, is deemed to be indefinite-lived and, accordingly, is not being amortized.
Amortization expense associated with identifiable definite-lived intangible assets was as follows:
(in millions)
Amortization expense
Year Ended December 31,
2020
2019
2018
$
1,153 $
1,074 $
1,016
Estimated amortization expense for existing identifiable intangible assets is expected to be approximately $1,062 million, $708
million, $605 million, $508 million and $409 million for the years ending December 31, 2021, 2022, 2023, 2024, and 2025, respectively.
Estimated amortization expense can be affected by various factors, including future acquisitions or divestitures of service and/or
licensing and distribution rights or impairments.
The following is a summary of identifiable intangible assets:
(in millions)
Definite-lived identifiable
intangible assets:
Client relationships and backlog
Trademarks, trade name and other
Databases
Software and related assets
Non-compete agreements
Indefinite-lived identifiable
intangible assets
Trade name
As of December 31, 2020
As of December 31, 2019
Gross
Amount
Accumulated
Amortization
Net
Amount
Gross
Amount
Accumulated
Amortization
Net
Amount
$
5,095 $
(1,745) $
3,350 $
4,809 $
(1,303) $
3,506
544
1,930
2,109
28
(212)
(1,629)
(915)
(18)
332
301
1,194
10
528
1,836
1,620
32
(158)
(1,185)
(665)
(18)
370
651
955
14
$
9,706 $
(4,519) $
5,187 $
8,825 $
(3,329) $
5,496
$
18 $
— $
18 $
18 $
— $
18
The following is a summary of goodwill by segment for the years ended December 31, 2020 and 2019:
83
(in millions)
Balance as of December 31, 2018
Business combinations
Impact of foreign currency fluctuations and other
Balance as of December 31, 2019
Business combinations
Impact of foreign currency fluctuations and other
Balance as of December 31, 2020
Technology &
Analytics
Solutions
Research &
Development
Solutions
Contract Sales &
Medical
Solutions
Consolidated
$
10,239 $
1,427 $
134 $
11,800
216
(81)
10,374
86
404
215
4
1,646
29
(29)
5
—
139
0
5
436
(77)
12,159
115
380
$
10,864 $
1,646 $
144 $
12,654
There were no goodwill impairment losses for the years ended December 31, 2020 or 2019.
9. Accrued Expenses
Accrued expenses consist of the following:
(in millions)
Compensation, including bonuses, fringe benefits and payroll taxes
Restructuring
Interest
Client contract related
Professional fees
Contingent consideration and deferred purchase price
Other
December 31,
2020
2019
$
852 $
53
55
849
92
59
272
$
2,232 $
687
67
53
763
80
52
235
1,937
10. Credit Arrangements
The following is a summary of the Company’s revolving credit facilities at December 31, 2020:
Facility
$1,500 million (revolving credit facility)
$25 million (receivables financing facility)
£10 million (approximately $14 million) general banking
facility
Interest Rates
LIBOR in the relevant currency borrowed plus a margin of 1.50% at
December 31, 2020
LIBOR Market Index Rate (0.14% at December 31, 2020) plus 0.90%
Bank’s base rate of 0.10% at December 31, 2020 plus 1%
84
The following table summarizes the Company’s debt at the dates indicated:
(dollars in millions)
Senior Secured Credit Facilities:
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 1.75%
$
Term A Loan due 2023—U.S. Dollar LIBOR at average floating rates of 2.75%
Term A Loan due 2023—Euro LIBOR at average floating rates of 1.50%
Term B Loan due 2024—U.S. Dollar LIBOR at average floating rates of 1.90%
Term B Loan due 2024—Euro LIBOR at average floating rates of 2.00%
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 1.90%
Term B Loan due 2025—U.S. Dollar LIBOR at average floating rates of 2.00%
Term B Loan due 2025—Euro LIBOR at average floating rates of 2.00%
Revolving Credit Facility due 2023:
U.S. Dollar denominated borrowings—U.S. Dollar LIBOR at average floating rates of 1.64%
Japanese Yen denominated borrowings—Japanese Yen LIBOR at average floating rates of
1.50%
5.0% Senior Notes due 2027—U.S. Dollar denominated
5.0% Senior Notes due 2026—U.S. Dollar denominated
2.875% Senior Notes due 2025—Euro denominated
3.25% Senior Notes due 2025—Euro denominated
3.5% Senior Notes due 2024—Euro denominated
2.25% Senior Notes due 2028—Euro denominated
2.875% Senior Notes due 2028—U.S. Euro denominated
Receivables financing facility due 2022—U.S. Dollar LIBOR at average floating rates of 1.04%
December 31,
2020
2019
728 $
766
400
535
1,413
726
926
697
—
—
1,100
1,050
515
1,748
—
883
872
240
770
—
387
535
1,306
733
936
644
154
212
1,100
1,050
471
1,598
701
808
—
300
Principal amount of debt
Less: unamortized discount and debt issuance costs
Less: current portion
Long-term debt
12,600
11,705
(67)
(149)
(60)
(100)
$
12,384 $
11,545
Contractual maturities of long-term debt at December 31, 2020 are as follows:
(in millions)
2021
2022
2023
2024
2025
Thereafter
$
149
389
1,715
1,927
4,515
3,905
$
12,600
At December 31, 2020, there were bank guarantees totaling approximately £0.9 million (approximately $1.3 million) issued
against the availability of the general banking facility with a European headquartered bank through their operations in the United
Kingdom.
85
Senior Secured Credit Agreement and Senior Notes
2020 Financing Transactions
At December 31, 2020, the Company’s Fourth Amended and Restated Credit Agreement, as amended (the “Credit
Agreement”) provided financing through several senior secured credit facilities (collectively, the “senior secured credit facilities”) of
up to approximately $7,692 million, which consisted of $6,192 million principal amounts of debt outstanding (as detailed in the table
above), $4 million of issued standby letters of credit and $1,496 million of available borrowing capacity on the revolving credit
facility.
On June 24, 2020, IQVIA Inc. (the “Issuer”), a wholly owned subsidiary of the Company, completed the issuance and
sale of €711 million in gross proceeds of the Issuer’s 2.875% senior notes due 2028 (the “2.875% Notes”). The 2.875% Notes
were issued pursuant to an Indenture, dated June 24, 2020, among the Issuer, U.S. Bank National Association, as trustee of the
Notes, and certain subsidiaries of the Issuer as guarantors. The 2.875% Notes are unsecured obligations of the Issuer, will
mature on June 15, 2028 and bear interest at the rate of 2.875% per year, with interest payable semiannually on June 15 and
December 15 of each year, beginning on December 15, 2020. The Issuer may redeem the 2.875% Notes prior to their final
stated maturity, subject to a customary make-whole premium, at any time prior to June 15, 2023 (subject to a customary “equity
claw” redemption right) and thereafter subject to a redemption premium declining from 1.438% to 0.000%. The proceeds from
the 2.875% Notes offering were used to redeem all of the Issuer’s outstanding 3.500% senior notes due 2024 (the “3.500%
Notes”), including the payment of premiums in respect thereof, to repay a portion of the existing borrowings under the Issuer’s
revolving credit facility and to pay fees and expenses related to the offering. The Issuer’s obligations with respect to the 3.500%
Notes were discharged on the same day as the Issuer completed the issuance of the 3.500% Notes, and the 3.500% Notes were
redeemed on July 9, 2020.
On March 11, 2020, the Company entered into Amendment No. 7 to the Credit Agreement to borrow $900 million in
additional U.S. Dollar denominated term A loans due 2023 (the “TLA-2 Loans”) and, on March 30, 2020, entered into Amendment
No. 8 to the Credit Agreement to amend certain terms of the TLA-2 Loans. The TLA-2 Loans bear interest based on the U.S. Dollar
LIBOR plus a margin ranging from 1.50% to 2.25%, with a U.S. Dollar LIBOR floor of 1.00% 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.
2019 Financing Transactions
At December 31, 2019, the Company’s Credit Agreement provided financing through the several senior credit facilities of
approximately $6,811 million, which consisted of $5,677 million principal amounts of debt outstanding (as detailed in the table
above), $3 million of issued standby letters of credit and $1,131 million of available borrowing capacity on the $1,500 million
revolving credit facility. On December 18, 2019, the Company entered into Amendment No. 6 to the Credit Agreement; pursuant to
the Amendment, that amended the interest rate applicable to the Issuer’s Term B Loan due 2024—U.S. Dollar LIBOR and Term B
Loan due 2025—U.S. Dollar LIBOR was reduced to LIBOR plus 1.75% per annum and the LIBOR floor applicable to the Issuer’s
Term B-1 Dollar Loans was reduced to —% per annum. On August 9, 2019, the Company entered into Amendment No. 5 to the
Credit Agreement that repriced the Euro LIBOR floor applicable to the Euro-denominated Term B Loan due 2024 and Term B Loan
due 2025 to 0% per annum.
On August 13, 2019, the Issuer completed the issuance and sale of €720 million in gross proceeds of the Issuer’s 2.25%
Senior Notes due 2028 (the “2.25% Notes”). The 2.25% Notes were issued pursuant to an Indenture, dated August 13, 2019, among
the Issuer, U.S. Bank National Association, as trustee of the 2.25% Notes, and certain subsidiaries of the Issuer as guarantors. The
net proceeds from the notes offering, together with available cash, were used to redeem the Issuer’s outstanding 2023 senior notes
due 2023 (the “4.875% Notes”), and to pay fees and expenses related to the notes offering. On July 29, 2019, the Issuer issued a
conditional notice of redemption with respect to the 4.875% Notes, for a total redemption price equal to the sum of the principal
amount of the 4.875% Notes, accrued and unpaid interest on the 4.875% Notes to the redemption date and the applicable redemption
premium. The Issuer’s obligations with respect to the 4.875% Notes were discharged on August 13, 2019. The 2.25% Notes are
unsecured obligations of the Issuer, will mature on January 15, 2028 and bear interest at the rate of 2.25% per annum, with interest
payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2020. The Issuer may redeem the 2.25%
Notes prior to their final stated maturity, subject to a customary make-whole premium, at any time prior to July 15, 2022 (subject to
a customary “equity claw” redemption right) and thereafter subject to a redemption premium declining from 101.125% to 0.000%.
86
On May 10, 2019, the Issuer completed the issuance and sale of $1.1 billion in gross proceeds of the Issuer’s 5.00% Senior
Notes due 2027 (the “5.00% Notes”). The 5.00% Notes were issued pursuant to an Indenture, dated May 10, 2019, among the Issuer,
U.S. Bank National Association, as trustee of the 5.00% Notes, and certain subsidiaries of the Issuer as guarantors. The net proceeds
from this notes offering were used to repay existing borrowings under the Issuer’s revolving credit facility, to pay fees and expenses
related to the notes offering and for other general corporate purposes. The 5.00% Notes are unsecured obligations of the Issuer, will
mature on May 15, 2027 and bear interest at the rate of 5.00% per annum, with interest payable semi-annually on January 15 and
July 15 of each year, beginning on January 15, 2020. The Issuer may redeem the 5.00% Notes prior to their final stated maturity,
subject to a customary make-whole premium, at any time prior to May 15, 2022 (subject to a customary “equity claw” redemption
right) and thereafter subject to a redemption premium declining from 2.500% to 0.000%.
Receivables Financing Facility
On November 25, 2020, the Company amended its receivables financing facility to exclude certain of its accounts receivable
from the facility.
On December 19, 2019, the Company amended its receivables financing facility to extend the term of the facility to December
19, 2022.
On December 5, 2014, the Company entered into a four-year arrangement to securitize certain of its accounts receivable.
Under the receivables financing facility, certain of the Company’s accounts receivable are sold on a non-recourse basis by certain of
its consolidated subsidiaries to another of its consolidated subsidiaries, a bankruptcy-remote special purpose entity (“SPE”). The
SPE obtained a term loan and revolving loan commitment from a third-party lender, secured by liens on the assets of the SPE, to
finance the purchase of the accounts receivable, which includes a $275 million term loan and a $25 million revolving loan
commitment. The revolving loan commitment may be increased by an additional $35 million as amounts are repaid under the term
loan. The Company has guaranteed the performance of the obligations of existing and future subsidiaries that sell and service the
accounts receivable under the receivables financing facility. The assets of the SPE are not available to satisfy any of the Company’s
obligations or any obligations of its subsidiaries. As of December 31, 2020, there were $60 million of revolving loans available
under the receivables financing facility.
Restrictive Covenants
The Company’s debt agreements provide for certain covenants and events of default customary for similar instruments,
including a covenant not to exceed a specified ratio of consolidated senior secured net indebtedness to Consolidated EBITDA, as
defined in the Credit Agreement and a covenant to maintain a specified minimum interest coverage ratio. If an event of default
occurs under any of the Company’s or the Company’s subsidiaries’ financing arrangements, the creditors under such financing
arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the
case of the lenders under the Credit Agreement, other actions permitted to be taken by a secured creditor. The Company’s long-term
debt arrangements contain usual and customary restrictive covenants that, among other things, place limitations on the Company’s
ability to declare dividends. At December 31, 2020, the Company was in compliance in all material respects with the financial
covenants under the Company’s financing arrangements.
11. Leases
The Company has operating leases for corporate offices, datacenters, motor vehicles and certain equipment, many of which
contain renewal and escalation clauses. These operating leases expire at various dates through 2029 with options to cancel certain
leases at various intervals. The Company also has finance leases for office and lab spaces that expire in 2044. Based on the timing of
payments on the finance leases the cash flow impact is not material for the year ended December 31, 2020. 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.
The components of lease expense were as follows:
87
(in millions)
Operating lease cost (1)
Financing lease cost (1)
Total lease cost
Classification
Selling, general and administrative expenses
Depreciation and amortization, and Interest expense
Year Ended
December 31,
2020
Year Ended
December 31,
2019
$
$
209 $
6
215 $
193
—
193
(1)
Includes variable lease costs, which are immaterial.
Rental expenses under lease agreements was $197 million in 2018.
Other information related to leases was as follows:
(in millions)
Supplemental Cash Flow:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Right-of-use assets obtained in exchange for lease obligations:
Operating leases
Financing leases
Weighted Average Remaining Lease Term:
Operating leases
Financing leases
Weighted Average Discount Rate:
Operating leases
Financing leases
Year Ended
December 31,
2020
Year Ended
December 31,
2019
$
$
$
211
109
119
$
$
$
195
96
—
4.58 years
24 years
5.01 years
—
3.78%
3.18 %
4.22%
—
Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows:
(in millions)
2021
2022
2023
2024
2025
Thereafter
Total future minimum lease payments
Less imputed interest
Total
Reported as of December 31, 2020:
Other current liabilities
Operating lease liabilities
Other liabilities
Total
88
Operating
Leases
Financing
Leases
$
159 $
132
104
73
58
52
578
(51)
527 $
156 $
371
—
527 $
$
$
$
—
6
6
6
6
159
183
(61)
122
—
—
122
122
12. Contingencies
The Company and its subsidiaries are involved in legal and tax proceedings, claims and litigation arising in the ordinary
course of business. 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. 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.
However, even in many instances where the Company has recorded an estimated liability, the Company is unable to predict
with certainty the final outcome of the matter or whether resolution of the matter will materially affect the Company’s results of
operations, financial position or cash flows. 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. 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. The Company has not accrued a
liability with respect to these matters generally, as the exposure is considered remote.
Based on its review of the latest information available, management does not expect the impact of pending legal and tax
proceedings, claims and litigation, either individually or in the aggregate, to have a material adverse effect on the Company’s results of
operations, cash flows or financial position. However, one or more unfavorable outcomes in any claim or litigation against the
Company could have a material adverse effect for the period in which it is resolved. The following is a summary of certain legal
matters involving the Company.
On February 13, 2014, a group of approximately 1,200 medical doctors and 900 private individuals filed a civil lawsuit with
the Seoul Central District Court against IMS Korea and two other defendants, KPA and the Korean Pharmaceutical Information Center
(“KPIC”). The civil lawsuit alleges KPA and KPIC collected their personal information in violation of applicable privacy laws without
the necessary consent through a software system installed on pharmacy computer systems in Korea, and that personal information was
transferred to IMS Korea and sold to pharmaceutical companies. On September 11, 2017, the District Court issued a final decision that
the encryption in use by the defendants since June 2014 was adequate to meet the requirements of the Korean Personal Information
Privacy Act (“PIPA”) and the sharing of non-identified information for market research purposes was allowed under PIPA. The
District Court also found an earlier version of encryption was insufficient to meet PIPA requirements, but no personal data had been
leaked or re-identified. The District Court did not award any damages to plaintiffs. Approximately 280 medical doctors and 200 private
individuals appealed the District Court decision. On May 3, 2019, the Appellate Court issued a final decision in which it concluded all
of the non-identified information transferred by KPIC to IMS Korea for market research purposes violated PIPA, but did not award any
damages to plaintiffs (affirming the District Court’s decision on this latter point). On May 24, 2019, approximately 247 plaintiffs
appealed the Appellate Court’s decision to the Supreme Court. The Company believes the appeal is without merit and is vigorously
defending its position.
On July 23, 2015, indictments were issued by the Seoul Central District Prosecutors’ Office in South Korea against 24
individuals and companies alleging improper handling of sensitive health information in violation of, among others, South Korea’s
Personal Information Protection Act. IMS Korea and two of its employees were among the individuals and organizations indicted.
Although there is no assertion that IMS Korea used patient identified health information in any of its offerings, prosecutors allege that
certain of IMS Korea’s data suppliers should have obtained patient consent when they converted sensitive patient information into non-
identified data and that IMS Korea had not taken adequate precautions to reduce the risk of re-identification. On February 14, 2020, the
Seoul Central District Court acquitted IMS Korea and its two employees of the charges of improper handling of sensitive health
information. The matter is now on appeal. The Company intends to vigorously defend its position on appeal.
On January 10, 2017, Quintiles IMS Health Incorporated and IMS Software Services Ltd. (collectively “IQVIA Parties”), filed
a lawsuit in the U.S. District Court for the District of New Jersey against Veeva Systems, Inc. (“Veeva”) alleging Veeva unlawfully used
IQVIA Parties intellectual property to improve Veeva data offerings, to promote and market Veeva data offerings and to improve Veeva
technology offerings. IQVIA Parties seek injunctive relief, appointment of a monitor, the award of compensatory and punitive damages
and reimbursement of all litigation expenses, including reasonable attorneys’ fees and costs. On March 13, 2017, Veeva filed
89
counterclaims alleging anticompetitive business practices in violation of the Sherman Act and state laws. Veeva claims damages in
excess of $200 million, and is seeking punitive damages and litigation costs, including attorneys’ fees. We believe the counterclaims are
without merit, reject all counterclaims raised by Veeva and intend to vigorously defend IQVIA Parties’ position and pursue our claims
against Veeva. Since the initial filings, the parties have filed additional litigations against each other, primarily concerning the use of
IQVIA data with various other Veeva products. The parties have been engaged in the discovery process in connection with the first
lawsuit.
13. Stockholders’ Equity
Preferred Stock
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 and outstanding as of December 31, 2020 or 2019.
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. The Board increased
the stock repurchase authorization under the Repurchase Program with respect to the repurchase of its common stock by $600 million,
$1.5 billion, $2 billion and $1.5 billion, $2.0 billion in 2015, 2016, 2017, 2018, and 2019 respectively, which increased the total
amount that has been authorized under the Repurchase Program to $7.725 billion. The Repurchase Program does not obligate the
Company to repurchase any particular amount of common stock or vested in-the- money employee stock options, and it may be
modified, extended, suspended or discontinued at any time.
As of December 31, 2020, the Company has remaining authorization to repurchase up to $0.9 billion of its common stock
under the Repurchase Program. 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.
2020 Offerings
There were no equity offerings during the year.
2019 Offerings
In March 2019, the Company completed an underwritten secondary public offering of 5,000,000 shares of its common stock
held by certain of the Company’s remaining private equity sponsors (the “Selling Stockholders”), of which the Company repurchased
1,000,000 shares for an aggregate purchase price of approximately $140.8 million. 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.
Other Equity Repurchases
On February 13, 2020, the Company agreed to purchase at market price an aggregate of 1,000,000 shares of its common
stock, par value $0.01 per share, in a private transaction from certain of its existing shareholders (the “February 2020 Repurchase”). In
addition to the February 2020 Repurchase, certain of the Company’s remaining private equity sponsors informed the Company that
they have sold 4,000,000 shares of the Company’s common stock pursuant to Rule 144 under the Securities Act of 1933, as amended,
for a total of 5,000,000 shares.
In August 2019, the Company agreed to purchase an aggregate of 1,000,000 shares of its common stock, par value $0.01 per
share, in a private transaction from certain of its existing shareholders (the “Repurchase”). In addition to the Repurchase, certain of the
Company’s remaining private equity sponsors informed the Company that they have sold 4,000,000 shares of the Company’s common
stock pursuant to Rule 144 under the Securities Act of 1933, as amended, for a total of 5,000,000 shares.
90
Summary
Below is a summary of the share repurchases made both under and outside of the Repurchase Program:
(in millions, except per share data)
Number of shares of common stock repurchased
Aggregate purchase price
Average price per share
Non-controlling Interests
Year Ended December 31,
2020
2019
2018
2.7
423 $
155.63 $
6.6
945 $
143.02 $
12.6
1,396
111.23
$
$
The Company contributed businesses to a joint venture with Quest Diagnostics Incorporated (“Quest”) that was recorded at
book value (carryover basis) because the Company owns 60% of the joint venture and maintains control of these businesses. As a result,
Quest’s non- controlling interest in the joint venture, referred to as Q2
$279 million at December 31, 2020. During the year ended December 31, 2020, Q2
Quest and received a $8 million contribution from Quest to fund ongoing operational and strategic activities.
Solutions, is equal to 40%. Quest’s non-controlling interest was
Solutions distributed dividends of $21 million to
14. Business Combinations
The Company completed several immaterial acquisitions during the year ended December 31, 2020. The Company’s
assessment of fair value and the purchase price allocation related to these acquisitions is preliminary and subject to change upon
completion. Further adjustments may be necessary as additional information related to the fair values of assets acquired and liabilities
assumed is assessed during the measurement period (up to one year from the acquisition date). The accompanying consolidated
financial statements include the results of the acquisitions subsequent to their respective closing dates. Pro forma information is not
presented as pro forma results of operations would not be significantly different to the actual results of operations of the Company.
The following table provides certain financial information for these acquisitions, including the preliminary allocations of the
purchase prices to certain intangible assets acquired and goodwill:
(in millions)
Total cost of acquisitions, net of cash acquired(1)
Amounts recorded in the Consolidated Balance Sheets:
Goodwill
Portion of goodwill deductible for income tax purposes
Intangible assets:
Customer relationships
Backlog
Non-compete agreements
Software
Trade names
Total intangible assets
Amortization Period
2020
2019
$
$
years $
years
10 -
18
0
3 -
3 -
2 -
3
3
3
years
years
years
224 $
115 $
99
90 $
—
2
8
1
$
101 $
667
437
186
216
11
6
35
3
271
(1)
Total cost of acquisitions, net of cash acquired, includes contingent consideration and deferred purchase payments of $47 million and
$79 million for the years ended December 31, 2020 and 2019, respectively.
91
15. Restructuring
The Company has continued to take restructuring actions in 2020 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
2021.
The management approved plans resulted in approximately $52 million, $75 million and $68 million of restructuring expense,
net of reversals, which consisted of severance, facility closure costs and other exit-related costs in 2020, 2019, and 2018, respectively.
The following amounts were recorded for the restructuring plans:
(in millions)
Balance at December 31, 2018
Expense, net of reversals
Payments
Foreign currency translation and other
Balance at December 31, 2019
Expense, net of reversals
Payments
Foreign currency translation and other
Balance at December 31, 2020
Severance and
Related Costs
Exit Costs
Total
$
$
$
47 $
27 $
75
(57)
(1)
64 $
52
(67)
2
0
(16)
(8)
3 $
—
(1)
0
51 $
2 $
74
75
(73)
(9)
67
52
(68)
2
53
The reversals were due to changes in estimates primarily resulting from the redeployment of staff and higher than expected
voluntary terminations. Restructuring costs are not allocated to the Company’s reportable segments as they are not part of the segment
performance measures regularly reviewed by management. The Company expects the majority of the restructuring accruals at
December 31, 2020 will be paid in 2021.
16. Income Taxes
The components of income before income taxes and equity in earnings (losses) of unconsolidated affiliates are as follows:
(in millions)
Domestic
Foreign
Year Ended December 31,
2020
2019
2018
$
$
(649) $
1,022
373 $
(504) $
856
352 $
(521)
849
328
The components of income tax expense attributable to continuing operations are as follows:
(in millions)
Current expense:
Federal and state
Foreign
Deferred (benefit) expense:
Federal and state
Foreign
Year Ended December 31,
2020
2019
2018
$
— $
11 $
244
244
(161)
(11)
(172)
248
259
(109)
(34)
(143)
$
72 $
116 $
17
233
250
(170)
(21)
(191)
59
92
The differences between the Company’s consolidated income tax expense attributable to continuing operations and the
expense computed at the United States statutory income tax rate of 21% were as follows:
(in millions)
Federal income tax expense at statutory rate
State and local income taxes, net of federal effect
Research and development
United States taxes recorded on foreign earnings(*)
Tax contingencies
Foreign Derived Intangible Income (“FDII”)
Foreign rate differential
Equity compensation
Non-taxable gain on acquisition adjustment
Non-controlling interest
Tax Act impact
Other
Year Ended December 31,
2020
2019
2018
$
78 $
19
(14)
2
(5)
(8)
25
(29)
6
(5)
—
$
3
72 $
74 $
—
(21)
9
27
20
26
(14)
(5)
(6)
—
6
116 $
69
(2)
(20)
40
16
(25)
27
(8)
—
(3)
(35)
—
59
(*) Includes impact of GILTI, and other U.S. taxes on foreign earnings.
In 2020, the U.S. Treasury Department issued final regulations regarding Foreign Derived Intangible Income (“FDII”) and
Global Intangible Low-Taxed Income (“GILTI”). The Company has determined it will elect the GILTI high tax exception as allowed by
the final regulations and will amend its 2018 and 2019 US Federal consolidated income tax returns resulting in a favorable impact of
$26 million, which the Company recorded in 2020.
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. While the final regulations related to the transition tax did not have a material impact on
the Company, the proposed guidance for FDII had an unfavorable impact. Although the proposed guidance for FDII is not authoritative
and subject to change in the regulatory review process, the company reversed the tax benefit recorded in 2018 by recording a tax expense
of $25 million for this impact.
In 2018 the Company recorded a $35 million benefit related to finalizing the accounting related to the Tax Act. Additionally,
in 2018 the Company recorded a benefit of $25 million related to FDII, as well as a tax expense of $35 million related to GILTI, as a
result of the new provisions of the Tax Act.
Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $4,075 million at December 31,
2020. With the enactment of the Tax Act, the Company does not consider any of its foreign earnings as indefinitely reinvested.
The income tax effects of temporary differences from continuing operations that give rise to significant portions of deferred
income tax assets (liabilities) are presented below:
93
(in millions)
Deferred income tax assets:
Net operating loss and capital loss carryforwards
Tax credit carryforwards
Accrued expenses and unearned income
Employee benefits
Lease liability
Foreign exchange on debt instruments
U.S. interest expense limitation
Other
Total deferred income tax assets
Valuation allowance for deferred income tax assets
Total deferred income tax assets (net of valuation allowance)
Deferred income tax liabilities:
Amortization and depreciation
Lease right-of-use assets
Foreign exchange on debt instruments
Other
Total deferred income tax liabilities
Net deferred income tax liabilities
December 31,
2020
2019
$
231 $
369
54
228
139
143
75
64
1,303
(306)
997
(1,038)
(133)
—
(50)
(1,221) $
(224) $
$
$
246
332
55
168
119
—
35
63
1,018
(266)
752
(1,105)
(119)
(28)
(27)
(1,279)
(527)
During 2020 the net deferred tax liabilities decreased mainly due to foreign exchange revaluations of debt instruments and
amortization of intangibles related to the merger between Quintiles and IMS Health.
The Company had federal, state and local, and foreign tax loss carryforwards and tax credits, the tax effect of which was $646
million as of December 31, 2020. Of this amount, $19 million has an indefinite carryforward period, and the remaining $627 million
expires at various times beginning in 2020. Some of the federal losses are subject to limitations under the Internal Revenue Code,
however, management expects these losses to be utilized during the carryforward periods.
In 2020, the Company increased its valuation allowance by $40 million to $306 million at December 31, 2020 from $266
million at December 31, 2019. The valuation allowance increased primarily due to current year state tax benefits on foreign exchange
revaluations on debt instruments, branch basket foreign tax credits that the Company has determined are not more likely than not to be
used before their expiration, and due to an increase in the value of the U.S. state net operating losses.
A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below:
(in millions)
Balance at January 1
Additions based on tax positions related to the current year
Additions for income tax positions of prior years
Impact of changes in exchange rates
Settlements with tax authorities
Reductions for income tax positions of prior years
Reductions due to the lapse of the applicable statute of limitations
Balance at December 31,
Year Ended December 31,
2020
2019
2018
$
$
120 $
5
15
3
(2)
(16)
(7)
118 $
94 $
5
33
—
(1)
(6)
(5)
120 $
82
4
26
(2)
(2)
—
(14)
94
As of December 31, 2020, the Company had total gross unrecognized income tax benefits of $118 million associated with
over 100 jurisdictions in which the Company conducts business that, if recognized, would reduce the Company’s effective income tax
rate.
94
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 2020, 2019 and 2018, the amount of
interest and penalties recorded as an addition to income tax expense in the accompanying consolidated statements of income was $3
million, $2 million and $0 million, respectively. As of December 31, 2020, and 2019, the Company had accrued approximately $21
million and $18 million, respectively, of interest and penalties.
The Company believes that it is reasonably possible that a decrease of up to $14 million in gross unrecognized income tax
benefits for federal, state and foreign exposure items may be necessary within the next 12 months due to lapse of statutes of limitations
or uncertain tax positions being effectively settled. The Company believes that it is reasonably possible that a decrease of up to $21
million in gross unrecognized income tax benefits for foreign items may be necessary within the next 12 months due to payments. For
the remaining uncertain income tax positions, it is difficult at this time to estimate the timing of the resolution.
The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and
various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities
throughout the world. The following table summarizes the tax years that remain open for examination by tax authorities in the most
significant jurisdictions in which the Company operates:
United States
India
Japan
United Kingdom
Switzerland
2017-2019
2006-2020
2019
2019
2015-2019
In certain of the jurisdictions noted above, the Company operates through more than one legal entity, each of which has
different open years subject to examination. The table above presents the open years subject to examination for the most material of the
legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed until the statute of
limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can extend beyond the open years
subject to examination.
Due to the geographic breadth of the Company’s operations, numerous tax audits may be ongoing throughout the world at
any point in time. Income tax liabilities are recorded based on estimates of additional income taxes that may be due upon the
conclusion of these audits. Estimates of these income tax liabilities are made based upon prior experience and are updated in light of
changes in facts and circumstances. However, due to the uncertain and complex application of income tax regulations, it is possible
that the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event,
the Company will record additional income tax expense or income tax benefit in the period in which such resolution occurs.
17. Employee Benefit Plans
Pension and Postretirement Benefit Plans
The Company sponsors both funded and unfunded defined benefit pension plans. These plans provide benefits based on
various criteria, including, but not limited to, years of service and salary. The Company also sponsors an unfunded postretirement
benefit plan in the United States that provides health and prescription drug benefits to retirees who meet the eligibility requirements.
The Company uses a December 31 measurement date for all pension and postretirement benefit plans.
The following table summarizes changes in the benefit obligation, the plan assets and the funded status of the pension benefit
plans:
95
(in millions)
Obligation and funded status:
Change in benefit obligation:
Projected benefit obligation at beginning of year
$
Service costs
Interest cost
Actuarial losses
Business combinations
Benefits paid
Contributions
Amendments
Curtailments
Settlements
Foreign currency fluctuations and other
Projected benefit obligation at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Contributions
Benefits paid
Settlements
Foreign currency fluctuations and other
Fair value of plan assets at end of year
Funded status
Pension Benefits
United States Plans
Non-United States Plans
December 31,
2020
2019
2020
2019
401 $
13
335 $
12
591 $
29
12
65
—
(10)
—
—
—
—
—
481
401
61
3
(10)
—
—
14
50
—
(10)
—
—
—
—
—
401
330
77
4
(10)
—
—
8
60
—
(18)
2
(1)
—
(7)
29
693
418
38
27
(18)
(7)
17
$
455
(26) $
401
— $
475
(218) $
513
25
9
55
—
(19)
2
—
(5)
(1)
12
591
366
34
26
(19)
(1)
12
418
(173)
The following table summarizes the amounts recognized in the consolidated balance sheets related to the pension benefit plans:
(in millions)
Deposits and other assets
Accrued expenses
Other long-term liabilities
AOCI
Pension Benefits
United States Plans
Non-United States Plans
December 31,
2020
2019
2020
2019
$
$
23
2
47
(21)
$
45
2
42
13
7 $
15
210
(65)
11
13
171
(30)
At December 31, 2020, the benefit obligation for other postretirement benefits was $1 million, with less than $1 million
recorded in accrued expenses and $1 million included within other long-term liabilities; and the amount recognized in AOCI was less
than $1 million.
The following table summarizes the accumulated benefit obligation for all pension benefit plans:
(in millions)
Accumulated benefit obligation
Pension Benefits
United States Plans
Non-United States Plans
December 31,
2020
2019
2020
2019
$
474 $
395 $
654
$
557
96
The following table provides the information for pension plans with an accumulated benefit obligation in excess of plan assets
and projected benefit obligations in excess of plan assets:
(in millions)
Plans with accumulated benefit obligation in excess of plan
assets:
Accumulated benefit obligation
Fair value of plan assets
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation
Fair value of plan assets
Pension Benefits
United States Plans
Non-United States Plans
December 31
2020
2019
2020
2019
$
$
$
52
5
$
47
4
$
572
384
53 $
5
49 $
4
610 $
386
485
334
519
335
The components of net periodic benefit cost changes in plan assets and benefit obligations recognized in other comprehensive
loss were as follows:
(in millions)
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial losses
Curtailment gain
Settlement gain
Net periodic benefit cost
Other changes in plan assets and benefit
obligations recognized in other comprehensive
loss:
Actuarial loss (gain) – current years
Prior service cost - current year
Curtailment gain - current year
Settlement gain - current year
Amortization of actuarial losses
Total recognized in other comprehensive loss
(income)
Total recognized in net periodic benefit cost and
other comprehensive loss (income)
United States Plans
Non-United States Plans
Pension Benefits
Year Ended December 31,
2020
2019
2018
2020
2019
2018
$
13 $
12
$
13 $
12
(30)
—
—
—
(5)
34
—
—
—
—
34
12
14
(25)
—
—
—
1
(2)
—
—
—
—
(2)
(27)
—
—
—
(2)
22
—
—
—
—
22
29 $
8
(18)
1
—
—
20
35
—
—
—
—
35
25 $
9
(16)
—
(5)
—
13
32
—
5
—
—
37
26
9
(15)
1
(3)
(1)
17
(15)
2
3
1
(1)
(10)
$
29 $
(1) $
20 $
55 $
50 $
7
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 period ending December 31,
2020 was primarily related to the change in discount rate.
On October 26, 2018, the High Court of the United Kingdom issued a judgement relating to Guaranteed Minimum Pensions
(“GMPs”) in the Lloyds case. The judgement concluded the schemes should be amended to equalize pension benefits for men and
women in relation to guaranteed minimum pension benefits. A preliminary assessment by the Company’s actuarial advisors estimated an
impact of approximately $1.7 million between the two United Kingdom pension schemes, which has been recognized in AOCI as a prior
97
service cost in 2018. On November 20, 2020, the High Court ruled that the schemes should revisit individual transfer payments made
since May 17, 1990 to review for any additional amount due as a result of the guaranteed minimum pension equalization. An assessment
by the Company’s actuarial advisors determined that the impact of this ruling to be immaterial.
Assumptions
The weighted average assumptions used to determine net periodic benefit cost were as follows for the years ended December
31:
Discount rate
Rate of compensation increases
Expected return on plan assets
Pension Benefits
United States Plans
Non-United States Plans
2020
3.52%
3%
2019
4.42%
3%
2018
3.69%
3%
7.42%
7.67%
7.69%
2020
1.45%
2.78%
3.91%
2019
1.99%
4.54%
4.02%
2018
1.91%
4.54%
4.17%
The weighted average assumptions used to determine benefit obligations were as follows at December 31:
Discount rate
Rate of compensation increases
Pension Benefits
United States Plans
Non-United States
Plans
2020
2.84%
3.00%
2019
3.52%
3.00%
2020
1.02%
2.55%
2019
1.45%
2.78%
The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to
be required to settle the Company’s defined benefit plan obligations. The discount rates are derived using weighted average yield
curves on AA-rated corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to
the yield curve to derive the discount rates.
The Company’s assumption for the expected return on plan assets was determined by the weighted average of the long-term
expected rate of return on each of the asset classes invested as of the balance sheet date. For plan assets invested in government bonds,
the expected return was based on the yields on the relevant indices as of the balance sheet date. There is considerable uncertainty for
the expected return on plan assets invested in equity and diversified growth funds.
Under the Company’s United States qualified retirement plan, participants have a notional retirement account that increases
with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is
equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is
converted to a monthly retirement benefit.
At December 31, 2020, the Company’s health care cost trend rate for the next seven years was assumed to be 5.5% and the
assumed ultimate cost trend rate was 4.5%. The Company assumed that ultimate cost trend rate is reached in 2023.
Assumed health care cost trend rates could have a significant effect on the amounts reported for the health care plans. A one-
percentage- point change in assumed health care cost trend rates at December 31, 2020 would have a de minimis effect on the total of
service and interest cost and on the accumulated postretirement benefit obligation.
Plan Assets
The Company’s pension plan weighted average asset allocations, by asset category, were as follows:
98
Asset Category
Equity securities
Debt securities
Real estate
Other
Total
United States Plans
Plan Assets at December 31,
Non-United States Plans
Total
2020
71.15%
23.88
4.97
—
2019
70.82%
24.13
5.05
—
2020
42.69%
2019
42.88%
2020
56.62%
2019
56.56%
20.08
—
37.23
19.22
—
37.00
21.94
2.43
19.02
21.62
2.48
19.33
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
The target asset allocation for the Company’s pension plans were as follows:
Asset Category
Equity securities
Debt securities
Real estate
Other
Total
45-65%
10-30%
0-5%
10-30%
The following table summarizes United States plan assets measured at fair value:
Asset Category
Level 1
Level 2
Total
Level 1
Level 2
Total
December 31, 2020
December 31, 2019
Domestic equities
International equities
Corporate bonds
Real estate
Total assets in the fair value hierarchy
Common/collective trusts measured at
net asset value (“NAV”)(1)
Total
$
29 $
— $
29 $
30 $
— $
(in millions)
9
65
23
126
—
—
—
—
—
—
9
65
23
126
329
16
58
20
124
—
—
—
—
—
—
$
126 $
— $
455 $
124 $
— $
The following table summarizes non-United States plan assets measured at fair value:
Asset Category
International equities
Debt issued by national, state or local
government
Diversified growth fund
Investments funds
Insurance contracts
Other
Total assets in the fair value hierarchy
Assets measured at NAV(1)
Total
Level 1
December 31, 2020
Level 2
Total
Level 1
(in millions)
December 31, 2019
Level 2
Total
$
3 $
66 $
69 $
2 $
56 $
3
—
—
—
—
6
93
—
10
171
6
346
96
—
10
171
6
352
2
—
—
—
—
4
78
—
9
153
5
301
—
6 $
—
346 $
123
475 $
—
4 $
—
301 $
$
30
16
58
20
124
277
401
58
80
—
9
153
5
305
113
418
(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value hierarchy. The fair value amounts presented in the above plan asset tables are intended to permit reconciliation of the fair value of plan
assets in the fair value hierarchy to the plan asset amounts presented in the above funded status table as of December 31, 2020 and 2019.
99
Investments in mutual funds are valued at quoted market prices. Investments in common/collective trusts and pooled funds
are valued at the NAV as reported by the trust. The NAV is based on the fair value of the underlying investments held by the fund less
its liabilities. Insurance contracts are valued at the amount of the benefit liability. The Company has no Level 3 assets that rely on
unobservable inputs to measure fair value.
Investment Policies and Strategies
The Company invests primarily in a diversified portfolio of equity securities that provide for long-term growth within
reasonable and prudent levels of risk. The asset allocation targets established by the Company are strategic and applicable to the plan’s
long-term investing horizon. The portfolio is constructed and maintained to provide adequate liquidity to meet associated liabilities and
minimize long-term expense and provide prudent diversification among asset classes in accordance with the principles of modern
portfolio theory. The plan employs a diversified mix of actively managed investments around a core of passively managed index
exposures in each asset class. Within each asset class, rapid market shifts, changes in economic conditions or an individual fund
manager’s outlook may cause the asset allocation to fall outside the prescribed targets. The majority of the Company’s plan assets are
measured quarterly against benchmarks established by the Company’s investment advisors and the Company’s Asset Management
Committee, who review actual plan performance and have the authority to recommend changes as deemed appropriate. Assets are
rebalanced periodically to their strategic targets to maintain the plan’s strategic risk/reward characteristics. The Company periodically
conducts asset liability modeling studies to ensure that the investment strategy is aligned with the obligations of the plans and that the
assets will generate income and capital growth to meet the cost of current and future benefits that the plans provide. The pension plans
do not have investments in Company stock at December 31, 2020 and 2019.
The 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 plans seek to achieve these objectives by investing in a mixture of real (equities) and monetary (fixed interest)
assets. It recognizes that the returns on real assets, while expected to be greater over the long-term than those on monetary assets, are
likely to be more volatile. A mixture across asset classes should nevertheless provide the level of returns required by the plans. The
trustee periodically conducts asset liability modeling exercises to ensure the investments are aligned with the appropriate benchmark to
better reflect the plans’ liabilities. The trustee also undertakes to review this benchmark on a regular basis.
Cash Flows
Contributions
The Company expects to contribute approximately $32 million in required contributions to its pension and postretirement
benefit plans during 2021. The Company may make additional contributions into its pension plans in 2021 depending on, among other
factors, how the funded status of those plans change or in order to meet minimum funding requirements as set forth in employee
benefit and tax laws, plus additional amounts the Company may deem to be appropriate.
Estimated future benefit payments and subsidy receipts
The following benefit payments (net of expected participant contributions) for pension benefits are expected to be paid as
follows:
(in millions)
2021
2022
2023
2024
2025
Years 2026 through 2030
Pension Benefits
42
$
42
44
47
48
274
497
$
100
Benefit payments (net of expected participant contributions) for other postretirement benefits are expected to be de minimis
over the periods presented.
Defined Contribution Plans
Defined contribution or profit sharing plans are offered in Australia, Austria, Belgium, Bulgaria, Canada, the Czech Republic,
Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Japan, Malaysia, the Netherlands, New
Zealand, Poland, Slovakia, South Africa, Sweden, Switzerland, Taiwan, Thailand, the United States and the United Kingdom. In some
cases, these plans are required by local laws or regulations.
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 2020, 2019, and 2018, the Company expensed $48 million, $56 million
and $49 million, respectively, related to matching contributions.
Certain key executives of the Company participate in an unfunded defined contribution executive retirement plan, assumed in
the Merger, which was frozen to additional accruals for future service contributions in 2012. Participants continue to receive an annual
investment credit based on the average of the annual yields at the end of each month on the AA-AAA rated 10 plus year maturity
component of the Merrill Lynch United States Corporate Bond Master Index.
Plans Accounted for as Postretirement Benefits
The Company provides certain executives with postretirement medical, dental and life insurance benefits. These benefits are
individually negotiated arrangements in accordance with their individual employment arrangements. The above tables do not include
the Company’s expense or obligation associated with providing these benefits. The obligation related to these benefits was
approximately $12 million as of December 31, 2020, and the Company’s expense for the year then ended was de minimis.
Stock Incentive Plans
Stock incentive plans provide incentives to eligible employees, officers and directors in the form of non-qualified stock
options, incentive stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units
(“RSUs”), performance awards, covered annual incentive awards, cash-based awards and other stock-based awards, in each case
subject to the terms of the stock incentive plans.
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 fair value of stock options and SARs is estimated using the Black-Scholes-Merton option-pricing model. The fair value
of restricted stock and RSUs is based on the closing market price of the Company’s common stock on the date of grant. The fair value
of the performance shares related to compound annual earnings per share (“EPS”) growth and/or other internal performance measures
is equal to the closing market price of the Company’s common stock on the date of grant. The fair value of performance shares related
to relative total shareholder return (“TSR”) is determined based on a Monte Carlo simulation model.
The Company recognized stock-based compensation expense of $95 million, $146 million and $113 million in 2020, 2019,
and 2018, 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 $14 million, $22 million
and $19 million in 2020, 2019, and 2018, respectively. As of December 31, 2020, there was approximately $105 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 0.92 years.
101
As of December 31, 2020, there were 10.7 million shares available for future grants under all of the Company’s stock incentive
plans.
The Company used the following assumptions when estimating the value of the stock-based compensation for stock options
and SARs issued as follows:
Expected volatility
Weighted average expected volatility
Expected dividends
Expected term (in years)
Risk-free interest rate
Stock Options
Year Ended December 31,
2020
23 – 31%
23%
0.0%
2019
23 – 24%
23%
0.0%
2018
22 – 24%
22%
0.0%
3.2 – 6.2
3.7 – 6.7
1.0 – 6.7
0.17 – 1.41% 1.55 –2.56%
2.05 – 3.00%
The option price is determined by the Board at the date of grant and the options expire 10 years from the date of grant. The
vesting schedule for options granted to employees is either (i) 25% per year beginning on the first anniversary of the date of grant; or
(ii) 33% on the third anniversary of the date of grant and 67% on the fourth anniversary of the date of grant.
The Company’s stock option activity in 2020 is as follows:
(in millions, except number of options and exercise price)
Outstanding at December 31, 2019
Exercised
Canceled
Number of
Options
1,458,341 $
(924,839)
(875)
Weighted
Average Exercise
Price
Aggregate
Intrinsic Value
174
34.90 $
27.08
64.67
Outstanding at December 31, 2020
532,627 $
48.42 $
70
The total intrinsic value of options exercised was approximately $120 million, $124 million and $117 million in 2020, 2019,
and 2018, respectively. The Company received cash of approximately $25 million, $36 million and $48 million in 2020, 2019, and
2018, respectively, from options exercised.
Selected information regarding the Company’s stock options as of December 31, 2020 is as follows:
Number of
Options
135,468
111,011
86,601
113,272
86,275
Options Outstanding
Options Exercisable
Exercise Price Range
—
11.46
29.17
50.79
64.67
64.86
—
—
—
—
28.39
47.87
64.52
64.67
64.93
Weighted
Average Exercise
Price
Weighted
Average
Remaining Life
(in Years)
Number of
Options
Weighted
Average Exercise
Price
23.72
42.26
57.25
64.67
64.92
1.79
2.6
3.84
5.17
4.18
135,468
111,011
86,601
113,272
86,275
23.72
42.26
57.25
64.67
64.92
The weighted average remaining contractual life of the options outstanding and exercisable as of December 31, 2020 is 3.4
years. The total aggregate intrinsic value of the exercisable stock options and the stock options expected to vest as of December 31,
2020 was approximately $70 million.
Stock Appreciation Rights – Stock Settled
102
The exercise price of the stock-settled SARs (“SSRs”) is equal to the closing market price of the Company’s common stock
as of the grant date and expire on the tenth anniversary of the date of grant. The SSRs are eligible to vest either (i) in equal increments
of 25% on each of the first four anniversaries of the date of grant or (ii) in three equal annual installments on each of the first three
anniversaries of the date of grant.
The Company’s SSR activity in 2020 is as follows:
(in millions, except number of SSRs and exercise price)
Outstanding at December 31, 2019
Granted
Exercised
Canceled
Number of SSRs
Weighted
Average Exercise
Price
Aggregate
Intrinsic Value
4,314,872 $
1,130,298
(1,012,501)
(191,327)
94.37 $
161.44
86.08
128.91
260
Outstanding at December 31, 2020
4,241,342 $
112.66 $
282
The total intrinsic value of SSRs exercised was approximately $73 million in 2020.
The weighted average remaining contractual life of the SSRs outstanding and exercisable as of December 31, 2020 is 7.2
years and 6.1 years, respectively. The total aggregate intrinsic value of the exercisable SSRs and the SSRs expected to vest as of
December 31, 2020 was approximately $280 million.
Stock Appreciation Rights – Cash Settled
The Company’s cash settled SARs (“CSRs”) require the Company to settle in cash an amount equal to the difference
between the fair value of the Company’s common stock on the date of exercise and the grant price, multiplied by the number of
CSRs being exercised. These awards vest either (i) 25% per year; (ii) 33% on the third anniversary of the date of grant and 67% on
the fourth anniversary of the date of grant; or (iii) one- third per year beginning on the first anniversary of the date of grant.
The Company’s CSR activity in 2020 is as follows:
(in millions, except number of CSRs and grant price)
Outstanding at December 31, 2019
Granted
Exercised
Canceled
Number of CSRs
Weighted
Average Grant
Price
Aggregate
Intrinsic Value
171,840 $
14,560
62.15 $
161.70
(37,884)
(1,800)
56.37
64.93
16
Outstanding at December 31, 2020
146,716 $
73.49 $
16
As of December 31, 2020, 2019, and 2018, the weighted average fair value per share of the CSRs granted was $112.10,
$99.27 and $66.92, respectively. The Company paid approximately $4 million, $7 million and $5 million to settle exercised CSRs in
2020, 2019, and 2018, respectively.
The weighted average remaining contractual life of the CSRs outstanding and exercisable as of December 31, 2020 is 4.6
years and 3.8 years, respectively. The total aggregate intrinsic value of the exercisable CSRs and the CSRs expected to vest as of
December 31, 2020 was approximately $15 million.
Restricted Stock Units – Stock Settled
The Company’s RSUs will settle in shares of the Company’s common stock within 45 days of the applicable vesting date. In
general, RSUs granted to employees vest either (i) 25% per year beginning on the first anniversary of the date of grant; (ii) one-third
per year beginning on the first anniversary of the grant date; (iii) 50% on the second anniversary of the date of grant and 25% on the
third and fourth anniversary of the date of grant or (iv) 100% at the end of the three-year period following the grant date. Members of
the Company’s board of directors receive RSUs that are fully vested when granted.
103
The Company’s RSU activity in 2020 is as follows:
Outstanding at December 31, 2019
Granted (1)
Vested
Canceled
Outstanding at December 31, 2020
Number of
RSUs
Weighted
Average
Grant-Date
Fair Value
420,566 $
347,289
(150,131)
(44,634)
573,090 $
115.90
159.85
109.84
127.34
143.23
(1) Pursuant to the IQVIA Holdings Inc. Non-Employee Director Deferral Plan (the “Director Deferral Plan”), non-employee directors
may elect to defer receipt of their cash retainers. If a director elects to defer his or her retainer, he or she will instead be credited with that
value in deferred shares under the Director Deferral Plan. Deferred shares become payable in Company common stock following a
termination of the director’s Board service or the director’s death, or upon a change in control of the Company. The Company granted
769 deferred RSUs in 2020.
As of December 31, 2020, there are 573,090 RSUs outstanding with an intrinsic value of approximately $103 million.
Restricted Stock Units – Cash Settled
The Company’s cash settled RSUs (“Cash RSUs”) require the Company to settle in cash an amount equal to the fair value of
the Company’s common stock on the vest date multiplied by the number of vested Cash RSUs. These awards vest either (i) 100% at
the end of the three-year period following the date of grant, or (ii) one-third per year beginning on the first grant date anniversary.
The Company’s Cash RSU activity in 2020 is as follows:
Outstanding at December 31, 2019
Granted
Vested
Canceled
Outstanding at December 31, 2020
Number of
Cash RSUs
Weighted
Average
Grant-Date
Fair Value
20,707 $
10,597
(9,751)
(2,198)
19,355 $
117.71
160.97
107.58
147.96
143.06
As of December 31, 2020, there are 19,355 Cash RSUs outstanding with an intrinsic value of approximately $3.5 million.
Restricted Stock Awards
Restricted stock awards (“RSAs”) vest either (i) in equal increments of 50% on each of the second and fourth anniversaries of
the grant date; (ii) one-third per year beginning on the first anniversary of the date of grant; or (iii) 25% on each of the second and third
anniversaries of the grant date and 50% on the fourth anniversary of the date of grant.
The Company’s RSA activity in 2020 is as follows:
Outstanding at December 31, 2019
Vested
Outstanding at December 31, 2020
Number of RSAs
190,937 $
(63,645)
Weighted
Average Grant-
Date Fair Value
78.21
78.21
127,292 $
78.21
104
As of December 31, 2020, there are 127,292 RSAs outstanding with an intrinsic value of approximately $23 million.
Performance Awards
The Company awarded performance awards that contain service, performance-based and/or market-based vesting criteria.
Vesting occurs if the recipient remains employed and depends on the degree to which performance goals are achieved during the two-
year or three-year performance period (as defined in the award agreements).
The Company’s performance award activity in 2020 is as follows:
Outstanding at December 31, 2019
Granted
Additional goal achievement shares
Vested
Canceled
Outstanding at December 31, 2020
Number of
Performance
Awards
1,055,807 $
Weighted
Average Grant-
Date Fair Value
107.18
237,012
336,264
(757,285)
(85,633)
786,165 $
177.13
85.82
86.16
129.34
136.96
As of December 31, 2020, there are 786,165 performance awards outstanding with an intrinsic value of approximately $141
million.
Other
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.
18. Related Party Transactions
The Company has entered into other transactions with related parties that are not deemed to be material, including
investments in and advances to unconsolidated affiliates that are discussed in Note 4.
19. Property, Equipment and Software by Geography
The following table represents the Company’s property, equipment and software, net, by geographic region, which is further
broken down to show each country that accounts for 10% or more of the totals:
(in millions)
Property, equipment and software, net:
Americas:
United States
Other
Americas
Europe and Africa
Asia-Pacific
Total property, equipment and software, net
20. Segments
As of December 31,
2019
2020
$
$
1,379 $
66
1,445
161
70
1,676 $
1,130
62
1,192
160
61
1,413
The following table presents the Company’s operations by reportable segment. The Company is managed through three
reportable segments, Technology & Analytics Solutions, Research & Development Solutions and Contract Sales & Medical Solutions.
Technology & Analytics Solutions provides mission critical information, technology solutions and real-world insights and services to
105
the Company’s life science clients. Research & Development Solutions, which primarily serves biopharmaceutical customers, provides
outsourced clinical research and clinical trial related services. Contract Sales & Medical Solutions provides health care provider
(including contract sales) and patient engagement services to both biopharmaceutical customers and the broader healthcare market.
Certain costs are not allocated to our segments and are reported as general corporate and unallocated expenses. These costs
primarily consist of stock-based compensation and expenses to integration activities and acquisitions. The Company also does not
allocate depreciation and amortization or impairment charges 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:
(in millions)
Revenues
Technology & Analytics Solutions
Research & Development Solutions
Contract Sales & Medical Solutions
Total revenues
Costs of revenue
Technology & Analytics Solutions
Research & Development Solutions
Contract Sales & Medical Solutions
Total costs of revenue
Selling, general and administrative expenses
Technology & Analytics Solutions
Research & Development Solutions
Contract Sales & Medical Solutions
General corporate and unallocated
Year Ended December 31,
2020
2019
2018
$
4,858 $
5,760
741
11,359
2,900
3,974
626
7,500
742
738
58
251
4,486 $
5,788
814
11,088
2,663
3,936
701
7,300
722
711
61
240
4,137
5,465
810
10,412
2,343
3,721
682
6,746
753
689
67
207
Total selling, general and administrative expenses
1,789
1,734
1,716
Segment profit
Technology & Analytics Solutions
Research & Development Solutions
Contract Sales & Medical Solutions
Total segment profit
General corporate and unallocated
Depreciation and amortization
Restructuring costs
Total income from operations
21. Earnings Per Share
1,216
1,048
57
2,321
(251)
(1,287)
$
(52)
731 $
1,101
1,141
52
2,294
(240)
(1,202)
(75)
777 $
1,041
1,055
61
2,157
(207)
(1,141)
(68)
741
The following table reconciles the basic to diluted weighted average shares outstanding:
(in millions)
Basic weighted average common shares outstanding
Effect of dilutive stock options and share awards
Diluted weighted average common shares outstanding
Year Ended December 31,
2019
2018
2020
191.3
3.7
195.0
195.1
4.5
199.6
203.7
4.5
208.2
The following table presents the weighted average number of outstanding stock-based awards not included in the computation
of diluted earnings per share because they are subject to performance conditions or the effect of including such stock-based awards in
the computation would be anti-dilutive:
106
(in millions)
Shares subject to performance conditions
Shares subject to anti-dilutive stock-based awards
Total shares excluded from diluted earnings per share
Year Ended December 31,
2019
2018
2020
1.2
1.2
2.4
1.3
0.7
2.0
0.8
0.9
1.7
The vesting of performance awards is contingent upon the achievement of certain performance targets. The performance
awards are not included in diluted earnings per share until the performance targets are probable. Stock-based awards will have a
dilutive effect under the treasury method when the respective period’s average market value of the Company’s common stock exceeds
the exercise proceeds.
22. Comprehensive Income
Below is a summary of the components of AOCI:
(in millions)
Balance at December 31, 2017
Other comprehensive loss before reclassifications
Reclassification adjustments
Balance at December 31, 2018
Other comprehensive loss before reclassifications
Reclassification adjustments
Balance at December 31, 2019
Other comprehensive loss before reclassifications
Reclassification adjustments
Balance at December 31, 2020
Foreign
Currency
Translation
Derivative
Instrument
Defined Benefit
Plans
Income Taxes
Total
$
(214) $
14 $
30 $
219 $
(205)
—
(419)
(11)
—
(430) $
35
—
(395) $
$
$
(4)
(11)
(1)
(19)
(1)
(21) $
(40)
13
(48) $
(12)
1
19
(35)
—
(16) $
(69)
—
(85) $
(41)
(1)
177
(21)
—
156 $
170
(3)
323 $
49
(262)
(11)
(224)
(86)
(1)
(311)
96
10
(205)
Below is a summary of the adjustments for (gains) losses reclassified from AOCI into the consolidated statements of income and the
affected financial statement line item:
(in millions)
Derivative instruments:
Affected Financial Statement
Line Item
2020
2019
2018
Year Ended December 31,
Interest rate swaps and caps
Interest expense
$
Foreign exchange forward contracts
Revenues
Foreign exchange forward contracts
Other expense (income),
net
Total before income taxes
Income tax benefit
Total net of income taxes
Defined benefit plans:
Amortization of actuarial losses
See Note 17
Total net of income taxes
$
$
$
13 $
(1)
1
13
3
10 $
— $
— $
— $
5
(6)
(1)
—
(1) $
— $
— $
—
1
(12)
(11)
1
(12)
1
1
107
23. Supplemental Cash Flow Information
The following table presents the Company’s supplemental cash flow information:
(in millions)
Supplemental Cash Flow Information:
Interest paid
Income taxes paid, net of refunds
24. Quarterly Financial Data (Unaudited)
Year Ended December 31,
2019
2018
2020
$
$
399
209
$
$
421 $
215 $
398
211
The following table summarizes the Company’s unaudited quarterly results of operations:
(in millions, except per share data)
Revenues
Income from operations
Net income
Net income attributable to non-controlling interests
Net income attributable to IQVIA Holdings Inc.
Basic earnings per share(1)
Diluted earnings per share(1)
$
$
$
(in millions, except per share data)
Revenues
Income from operations
Net income
Net income attributable to non-controlling interests
Net income attributable to IQVIA Holdings Inc.
Basic earnings per share(1)
Diluted earnings per share(1)
$
$
$
First Quarter
Second Quarter
Third Quarter
2020
$
2,754 $
2,521 $
2,786 $
Fourth Quarter
3,298
193
91
(9)
82 $
0.43 $
0.42 $
62
(21)
(2)
(23) $
(0.12) $
(0.12) $
2019
187
108
(7)
101 $
0.53 $
0.52 $
289
130
(11)
119
0.62
0.61
First Quarter
Second Quarter
Third Quarter
$
2,684 $
2,740 $
2,769 $
Fourth Quarter
2,895
210
67
(9)
58 $
0.29 $
0.29 $
197
71
(11)
60 $
0.31 $
0.30 $
204
69
(12)
57 $
0.29 $
0.29 $
166
20
(4)
16
0.09
0.09
(1)
The sum of the quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in
the number of weighted average shares outstanding and the effects of rounding for each period.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, as amended, we carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures under the supervision and with the participation of our management,
including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). There are inherent limitations to the effectiveness
of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of
the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of
achieving their control objectives. Based upon our evaluation, our CEO and CFO concluded that our disclosure controls and
procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the
108
applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and CFO, as
appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management’s report on internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on
Form 10-K and is incorporated herein by reference.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
On February 11, 2020, the Board of the Company amended the Company’s Amended and Restated Bylaws (the “Bylaws”) to
implement a proxy access provision. The Bylaws include a new Section 1.3, which permits a stockholder, or a group of up to 20
stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and
include in the Company’s proxy materials director candidates constituting up to the greater of 2 nominees or 20% of the Board, subject
to the terms and conditions set forth in the Bylaws.
The foregoing description of the amendments to the Bylaws does not purport to be complete and is qualified in its entirety by
reference to the full text of the Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.
109
Item 10. Directors, Executive Officers and Corporate Governance
PART III
Information required by this Item, other than the information regarding the executive officers of the Company set forth below,
is incorporated by reference to the sections of our definitive Proxy Statement for our 2021 Annual Meeting of Stockholders (the “2021
Proxy Statement”) entitled “Proposal No. 1: Election of Directors”, “IQVIA’s Corporate Governance—Documents Establishing our
Corporate Governance” and “IQVIA’s Corporate Governance—Committees of the Board.”
The current executive officers of the Company are as follows:
Name
Ari Bousbib
Ronald E. Bruehlman
W. Richard Staub, III
Kevin C. Knightly
Eric Sherbet
Age
59
60
58
60
56
Position
Chairman and Chief Executive Officer
Executive Vice President and Chief Financial Officer
President, Research & Development Solutions
President, Technology & Commercial Solutions
Executive Vice President, General Counsel and Secretary
Ari Bousbib, Director, Chairman and Chief Executive Officer
Mr. Bousbib is Chairman and Chief Executive Officer of the Company. He assumed this position in October 2016 following
the Merger of Quintiles and IMS Health. From 2010 until the Merger, Mr. Bousbib served as Chairman and CEO of IMS Health. Prior
to joining IMS Health, Mr. Bousbib spent 14 years at United Technologies Corporation (“UTC”), an aerospace, defense and building
systems company. From 2008 until 2010, he served as President of UTC’s Commercial Companies, with executive leadership
responsibilities for the worldwide operations of Otis Elevator Company, Carrier Corporation, UTC Fire & Security and UTC Power
Inc. From 2002 until 2008, Mr. Bousbib was President of Otis, and from 2000 to 2002, he served as its Chief Operating Officer. Prior
to joining UTC, Mr. Bousbib was a partner at Booz Allen Hamilton. Mr. Bousbib currently serves on the board of directors of The
Home Depot, Inc. and is a member of the Harvard Medical School Health Care Policy Advisory Council. Mr. Bousbib holds a Master
of Science Degree in Mathematics and Mechanical Engineering from the Ecole Superieure des Travaux Publics, Paris, and an M.B.A.
from Columbia University.
Ronald E. Bruehlman, Executive Vice President and Chief Financial Officer
Mr. Bruehlman was appointed as Executive Vice President and Chief Financial Officer effective August 1, 2020. Mr.
Bruehlman previously served as Senior Vice President and Chief Financial Officer of IMS Health from July 2011 until the merger of
IMS Health and Quintiles in 2016. Mr. Bruehlman also currently serves as Chairman of the Board of Directors at Q2 Solutions, an
IQVIA and Quest Diagnostics joint venture. Prior to joining IMS Health, Mr. Bruehlman worked for 23 years at UTC, advancing
through finance positions of increasing responsibility, culminating in his appointment as Vice President, Business Development, which
he held from June 2009 to April 2011, where he led the company’s global strategy and development activities. From June 2005 until
May 2008, he was Vice President and Chief Financial Officer of Carrier Corporation. Prior to that, Mr. Bruehlman was Vice President,
Financial Planning and Analysis for UTC and also served as Director, Investor Relations of UTC. Mr. Bruehlman has served as a
director of The Connecticut Forum since 2005. He also served as a director of The New England Air Museum from 2009 through 2013.
Mr. Bruehlman has a Bachelor of Science degree in Economics from the University of Delaware, and an M.B.A. from the University of
Chicago.
W. Richard Staub, III, President, Research & Development Solutions
Mr. Staub has served as President, Research & Development Solutions since November 2016. Previously Mr. Staub served as
President of Novella Clinical, a Quintiles company, since 2013. Prior to Novella’s 2013 acquisition by Quintiles, Mr. Staub served as
both president and CEO of Novella Clinical since 2008. Before joining Novella Clinical in 2004, Mr. Staub was senior vice president
of global business development for one of the world’s largest clinical research organizations. Mr. Staub’s career in the pharmaceutical
industry began at Zeneca Pharmaceuticals in 1989 where he had progressive responsibilities as a medical and hospital sales
representative, cardiovascular portfolio analyst and marketing manager. Mr. Staub has a Bachelor of Arts degree in Economics from
the University of North Carolina at Chapel Hill.
110
Kevin C. Knightly, President, Technology & Commercial Solutions
Mr. Knightly has served as President, Technology & Commercial Solutions since October 2016. Previously Mr. Knightly
served as Senior Vice President, Information Offerings at IMS Health from April 2015 to October 2016. From January 2011 to March
2015, Mr. Knightly served as Senior Vice President, Supplier Management at IMS Health. Prior to that, Mr. Knightly served in a number
of senior financial, operations, marketing and general management roles for IMS Health, including as Senior Vice President, Pharma
Business Management from 2007 until 2010. Mr. Knightly holds a B.S. in Economics and Accounting from the College of the Holy
Cross, and an M.B.A. from New York University’s Stern Business School.
Eric Sherbet, Executive Vice President, General Counsel and Secretary
Mr. Sherbet has served as our Executive Vice President, General Counsel and Secretary since March 2018. Prior to joining
the Company, he served as General Counsel and Secretary at Patheon N.V. from November 2014 until November 2017. Prior to
joining Patheon, he was General Counsel and Corporate Secretary at InVentiv Health from April 2011 until October 2014. He also
previously served as Vice President, Deputy General Counsel and Corporate Secretary at Foster Wheeler AG and before that, as Vice
President, Corporate and Securities Law and Secretary with Avaya, Inc. Mr. Sherbet earned his law degree from New York University
School of Law and received his bachelor’s degree in commerce/accounting from University of Virginia.
Item 11. Executive Compensation
Compensation
The information required by this item is set forth under the headings “Director Compensation,” “Compensation Discussion
and Analysis,” “Compensation Committee Report,” “Compensation of Named Executive Officers,” and “Other Relevant Information
—Compensation Committee Interlocks and Insider Participation” in the 2021 Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information in response to this Item, other than Securities Authorized for Issuance Under Equity Compensation Plans, will
be set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the Company’s 2021 Proxy
Statement, which information is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information with respect to all of our equity compensation plans in effect as of
December 31, 2020:
Equity Compensation Plan Information
Number of
Securities
to be issued
Upon Exercise of
Outstanding
Options,
Warrants and
Rights (a)
Weighted
Average Exercise
Price of
Outstanding
Options,Warrant
s and Rights (b)
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (excluding
securities
reflected in
column (a) (c)
6,133,224 (1) $
105.50 (3)
10,700,716
(4)
26,727 (2)
—
—
6,159,951
$
105.50 (3) 10,700,716
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
111
(1)
(2)
(3)
(4)
Consists of: (i) 4,773,969 shares of common stock issuable upon the exercise of outstanding time-based stock options and underlying
outstanding time-based SARs; (ii) 571,506 shares of common stock issuable in settlement of outstanding restricted stock units awarded;
(iii) 786,165 shares of common stock issuable in settlement of outstanding performance units awarded; and (iv) 1,584 shares of deferred
common stock outstanding under the Director Deferral Plan. Excludes (i) 127,292 shares of common stock subject to outstanding awards
of restricted stock.
Consists of outstanding awards issued to certain executives with supplemental pension benefits in accordance with their individual
employment arrangements under the IMS Health DCERP.
The weighted-average exercise price includes all outstanding stock options and SARs but does not include restricted stock units,
restricted stock, performance units or performance stock, deferred stock or IMS Health DCERP awards, all of which do not have an
exercise price. If restricted stock units, performance units and other awards that constitute “rights” were included in this calculation,
treating such awards as having an exercise price of $0, the weighted average exercise price of outstanding options, warrants and rights
would be $82.12.
Consists of all securities remaining available under our equity compensation plans. All of these shares are available for delivery under
stock options, SARs, restricted stock, restricted stock units, performance awards or other forms of equity award authorized by the plans.
Does not include 2,251,704 shares that would have remained available under our Employee Stock Purchase Plan had it not been
discontinued as of December 31, 2016.
Item 13. Certain Relationships and Related Transactions and Director Independence
The information required by this item is set forth under the headings “IQVIA’s Corporate Governance,” and “Certain
Relationships and Related Party Transactions” in the 2021 Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this item is set forth under the headings “Audit—Fees Paid to Independent Registered Public
Accounting Firm” in the 2021 Proxy Statement and is incorporated herein by reference.
112
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)
The following documents are filed as part of this report:
(1) Financial Statements
The following consolidated financial statements of IQVIA Holdings Inc. and its subsidiaries, and the independent registered
public accounting firm’s report thereon, are included in Part II, Item 8 of this Annual Report:
Management’s Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Income
Consolidated Statements of Comprehensive (Loss) Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity (Deficit)
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules for the Years Ended December 31, 2020, 2019 and 2018
Schedule I—Condensed Financial Information of Registrant (Parent Company Only)
Schedule II—Valuation and Qualifying Accounts
Page
55
56
58
59
60
61
62
63
115
120
All other schedules are omitted, since the required information is not applicable or is not present in amounts sufficient to
require submission of the schedule, or because the information required is included in the consolidated financial statements and notes
thereto.
(3) Exhibits
The exhibits in the accompanying Exhibit Index preceding the signature page are filed or furnished as a part of this report and
are incorporated herein by reference. The Company agrees to furnish to the SEC, upon request, copies of any long-term debt
instruments that authorize an amount of securities constituting 10% or less of the total assets of IQVIA Holdings Inc. and its
subsidiaries on a consolidated basis.
113
EXHIBIT INDEX
Incorporated by Reference
Filed
Herewith
Form
8-K
File No.
001-35907
Exhibit
2.1
Filing Date
May 3, 2016
10-K
001-35907
3.1
10-K
001-35907
S-1/A
333-186708
8-K
001-35907
3.2
4.1
4.1
8-K
001-35907
4.1
8-K
001-35907
4.1
February 16,
2018
February 18,
2020
April 26, 2013
October 3, 2016
February 28,
2017
September 19,
2017
8-K
001-35907
4.1
May 10, 2019
8-K
8-K
8-K
4.1
4.1
10.9
001-35907
001-35907
001-35907
August 13, 2019
June 24, 2020
October 3, 2016
8-K
001-35907
10.1
March 8, 2017
8-K
001-35907
10.1
September 19,
2017
10-Q
001-35907
10.1
May 4, 2018
Exhibit
Number
2.1*
3.1
3.2
4.1
4.5
4.8
4.9
4.10
4.11
4.12
10.1
10.2
10.3
10.4
Exhibit Description
Agreement and Plan of Merger, dated as of May 3, 2016, by and
between Quintiles Transnational Holdings Inc. and IMS Health
Holdings, Inc. (which includes the Plan of Conversion dated as
of May 3, 2016 as Exhibit A thereto).
Amended and Restated Certificate of Incorporation of IQVIA
Holdings Inc., effective November 6, 2017 (as amended through
November 6, 2017).
Amended and Restated Bylaws of IQVIA Holdings Inc., effective
February 11, 2020.
Specimen Common Stock Certificate of Quintiles Transnational
Holdings Inc.
Indenture, dated as of September 28, 2016, among Quintiles IMS
Incorporated, the Guarantors listed therein and U.S. Bank National
Association, as Trustee.
Indenture, dated February 28, 2017, among Quintiles IMS
Incorporated, as Issuer, U.S. Bank National Association, as
trustee of the Notes, and certain subsidiaries of the Issuer as
Indenture, dated September 14, 2017, among Quintiles IMS
Incorporated, as Issuer, U.S. Bank National Association, as
trustee of the Notes, and certain subsidiaries of the Issuer as
Indenture, dated May 10, 2019, among IQVIA Inc., as Issuer,
U.S. Bank National Association, as trustee of the Notes and
certain subsidiaries of the Issuer, as guarantors.
Indenture, dated August 13, 2019, among IQVIA Inc., as Issuer,
U.S. Bank National Association, as trustee of the Notes and certain
subsidiaries of the Issuer, as guarantors.
Indenture, dated June 24, 2020, among IQVIA Inc., as Issuer, U.S.
Bank National Association, as trustee of the Notes and certain
subsidiaries of the Issuer, as guarantors.
Fourth Amended and Restated Credit Agreement, dated as of
October 3, 2016, by and among Quintiles IMS Incorporated,
Quintiles IMS Holdings, Inc., the Guarantors party thereto and
the Lenders party thereto (Annex B to Exhibit 10.9 filed October
3, 2016).
Amendment No. 1, dated March 7, 2017, to Fourth Amended
and Restated Credit Agreement, dated October 3, 2016, among
Quintiles IMS Incorporated, Quintiles IMS Holdings, Inc., the
Guarantors party thereto, Bank of America N.A., as
administrative agent and collateral agent, the Incremental Term
B-1 Euro Lenders party thereto and the other Lenders party
Amendment No. 2, dated September 18, 2017, to Fourth
Amended and Restated Credit Agreement, by and among
Quintiles IMS Incorporated, Quintiles IMS Holdings, Inc., the
Guarantors party thereto, Bank of America N.A., as
administrative agent and collateral agent, the Incremental Term
B-2 Dollar Lenders party thereto and the other Lenders party
Amendment No. 3, dated April 6, 2018, to Fourth Amended and
Restated Credit Agreement, dated October 3, 2016, by and
among IQVIA Inc., IQVIA Holdings Inc., the other Borrowers
party thereto, the other Guarantors party thereto, Bank of
America, N.A., as administrative agent and collateral agent, and
the Incremental Revolving Credit Lenders party thereto.
114
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
Amendment No. 4, dated June 11, 2018, to Fourth Amended and
Restated Credit Agreement, dated October 3, 2016, among
IQVIA Inc., IQVIA Holdings Inc., IQVIA AG, IQVIA Solutions
Japan K.K., the other guarantors party thereto, Bank of America,
N.A. as administrative agent and as collateral agent, the Lenders
party thereto, the Incremental Term B-3 Dollar Lenders party
thereto and the Incremental Term B-2 Euro Lenders party
Amendment No. 5 to Fourth Amended and Restated Credit
Agreement, dated August 9, 2019, among IQVIA Inc., IQVIA
Holdings Inc., the other guarantors party thereto, Bank of
America, N.A. as administrative agent and collateral agent, the
Term B-1 Euro Lenders, the Term B-2 Euro Lenders and
Goldman Sachs Bank USA, as Replacement Lender.
Amendment No. 6 to Fourth Amended and Restated Credit
Agreement, dated December 18, 2019, among IQVIA Inc., IQVIA
Holdings Inc., the other guarantors party thereto, Bank of America,
N.A. as administrative agent and collateral agent, the Term B-2
Dollar Lenders and Bank of America N.A., as Replacement Lender.
Amendment No. 7 to Fourth Amended and Restated Credit
Agreement, dated March 11, 2020, among IQVIA Inc., IQVIA
Holdings Inc., the other guarantors party thereto, Bank of America,
N.A. as administrative agent and collateral agent, and the
Incremental Term A-2 Dollar Lenders
Amendment No. 8 to Fourth Amended and Restated Credit
Agreement, dated March 30, 2020, among IQVIA Inc., IQVIA
Holdings Inc., the other guarantors party thereto, Bank of America,
N.A. as administrative agent and collateral agent, and the
Incremental Term A-2 Dollar Lenders
Amended and Restated Pledge and Security Agreement, dated as
of March 17, 2014, among Healthcare Technology Intermediate
Holdings, Inc., IMS Health Incorporated, each of the grantors
party thereto, and Bank of America, N.A., as Administrative
Agent.
U.S. Guaranty, dated as of March 17, 2014, among Healthcare
Technology Intermediate Holdings, Inc., as Holdings, IMS Health
Incorporated, as Parent Borrower, the other Guarantors party
thereto from time to time, and Bank of America, N.A., as
Administrative Agent.
Stockholders Agreement, dated May 3, 2016, among Quintiles
Transnational Holdings Inc. and the stockholders identified
therein.
8-K
001-35907
10.1
June 12, 2018
8-K
001-35907
10.1
August 13, 2019
8-K
001-35907
10.1
December 18,
2019
10-Q
001-35907
10.1
April 30, 2020
10-Q
001-35907
10.2
April 30, 2020
IMS
Health
S-1/A
IMS
Health
S-1/A
333-193159
10.33
March 24, 2014
333-193159
10.34
March 24, 2014
8-K
001-35907
10.4
May 3, 2016
10.13†
Form of Director Indemnification Agreement.
S-1/A
333-186708
10.13
April 19, 2013
8-K
001-35907
10.8
October 3, 2016
10.14
10.15†
10.16†
10.17†
Form of Indemnification Agreement with each of the non-
management directors of Quintiles IMS Holdings Inc.
Description of Non-Employee Director Compensation, effective
as of January 1, 2017.
Form of Non-Competition, Non-Solicitation, Confidentiality
and IP Agreement.
Quintiles Transnational Holdings Inc. Annual Management
Incentive Plan.
10-K
001-35907
10.27
8-K
001-35907
10.2
S-1/A
333-186708
10.57
10.17
February 16,
2017
October 19, 2015
April 19, 2013
February 15,
2013
February 15,
2013
February 15,
2013
10.18†
Quintiles Transnational Holdings Inc. 2008 Stock Incentive Plan.
S-1
333-186708
10.19†
10.20†
Form of Stock Option Award Agreement for Senior Executives
under the Quintiles Transnational Holdings Inc. 2008 Stock
Incentive Plan.
Form of Stock Option Award Agreement for Non-Employee
Directors under the Quintiles Transnational Holdings Inc. 2008
Stock Incentive Plan.
S-1
333-186708
10.18
S-1
333-186708
10.19
10.21†
Quintiles Transnational Holdings Inc. 2013 Stock Incentive Plan.
S-1/A
333-186708
10.22
April 19, 2013
115
10.22†
10.23†
10.24†
10.25†
10.26†
10.27†
10.28†
10.29†
10.30†
10.31†
10.32†
10.33†
10.34†
10.35†
10.36†
10.37†
10.38†
10.39†
10.40†
10.41†
10.42†
Form of Award Agreement Awarding Nonqualified Stock Options
to Employees under the Quintiles Transnational Holdings Inc.
2013 Stock Incentive Plan.
Form of Award Agreement Awarding Incentive Stock Options to
Employees under the Quintiles Transnational Holdings Inc. 2013
Stock Incentive Plan.
Form of Award Agreement Awarding Nonqualified Stock Options
to Non-Employee Directors under the Quintiles Transnational
Holdings Inc. 2013 Stock Incentive Plan.
Form of Award Agreement Awarding Stock Appreciation Rights
under the Quintiles Transnational Holdings Inc. 2013 Stock
Incentive Plan.
Form of Award Agreement Awarding Stock Appreciation Rights
under the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan
effective February 2017.
Form of Award Agreement Awarding Restricted Stock Units
under the Quintiles Transnational Holdings Inc. 2013 Stock
Incentive Plan prior to February 2015.
Form of Award Agreement Awarding Restricted Stock Units
under the Quintiles Transnational Holdings Inc. 2013 Stock
Incentive Plan effective February 2015.
Form of Award Agreement Awarding Performance Units under
the Quintiles Transnational Holdings Inc. 2013 Stock Incentive
Plan.
Form of Award Agreement Awarding Performance Shares under
the Quintiles IMS Holdings, Inc. 2013 Stock Incentive Plan
effective February 2017.
Form of Restricted Stock Award Agreement under the
Quintiles Transnational Holdings Inc. 2013 Stock Incentive
Plan.
Form of Award Agreement Awarding Restricted Stock
Units under the Quintiles IMS Holdings, Inc. 2013 Stock
Incentive Plan effective February 2017.
Quintiles IMS Holdings, Inc. Defined Contribution Executive
Retirement Plan.
IMS Health Incorporated Defined Contribution Executive
Retirement Plan, as amended and restated.
First Amendment to the IMS Health Incorporated Retirement
Excess Plan, dated March 17, 2009.
Second Amendment to the IMS Health Incorporated Retirement
Excess Plan, dated December 8, 2009.
Third Amendment to the IMS Health Incorporated Retirement
Excess Plan, dated April 5, 2011.
Fourth Amendment to the IMS Health Incorporated Retirement
Excess Plan (effective May 3, 2016).
Quintiles IMS Holdings, Inc. 2010 Equity Incentive Plan.
Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan,
as amended and restated.
Form of IMS Time-and Performance-Based Stock Option Award
Agreement under the 2010 Equity Incentive Plan.
Form of IMS Time-Based Stock Option Award Agreement under
the 2010 Equity Incentive Plan.
116
S-1/A
333-186708
10.23
April 19, 2013
10-Q
001-35907
10.2
May 1, 2014
S-1/A
333-186708
10.24
April 19, 2013
S-1/A
333-186708
10.56
April 19, 2013
10-K
001-35907
10.41
8-K
001-35907
10.1
10-K
001-35907
10.34
001-35907
10.35
001-35907
10.45
001-35907
10.3
001-35907
10.47
February 16,
2017
November 26,
2013
February 12,
2015
February 12,
2015
February 16,
2017
November 3,
2016
February 16,
2017
001-35907
10.7
October 3, 2016
333-193159
10.10
January 2, 2014
333-193159
10.12
January 2, 2014
333-193159
10.13
January 2, 2014
333-193159
10.14
January 2, 2014
001-36381
001-35907
10.3
10.5
July 28, 2016
October 3, 2016
333-193159
10.16
February 13,
2014
333-193159
10.17
January 2, 2014
333-193159
10.18
January 2, 2014
10-K
10-K
10-Q
10-K
8-K
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
10-Q
8-K
IMS
Health
S-1/A
IMS
Health
S-1
IMS
Health
S-1
10.43†
10.44†
10.45†
10.46†
10.47†
10.48†
10.49†
10.50†
Form of IMS Director Stock Option Award Agreement under the
2010 Equity Incentive Plan.
Form of IMS Restricted Stock Unit Award Agreement under the
2010 Equity Incentive Plan.
Form of IMS Director Restricted Stock Unit Award Agreement
under the 2010 Equity Incentive Plan.
Form of IMS Rollover Stock Appreciation Right Award
Agreement under the 2010 Equity Incentive Plan.
IMS Health Incorporated Savings Equalization Plan, as amended
and restated effective as of January 1, 2011.
Quintiles IMS Holdings, Inc. 2014 Incentive and Stock Award
Plan.
Form of IMS Stock Appreciation Rights Agreement under the
2014 Incentive and Stock Award Plan.
Form of IMS Performance Share Award Agreement under the
2014 Incentive and Stock Award Plan.
10.51†
2014 IMS Health Annual Incentive Plan.
10.52†
10.53†
10.54†
10.55†
10.56†
10.57†
10.58†
10.59†
10.60†
10.61†
10.62†
10.63†
10.66†
10.67†
10.68†
Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award
Plan.
Form of Award Agreement Awarding Stock Appreciation Rights
under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock
Award Plan effective April 2017.
Form of Award Agreement Awarding Performance Shares under
the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock Award
Plan effective April 2017.
Form of Award Agreement Awarding Restricted Stock Units
under the Quintiles IMS Holdings, Inc. 2017 Incentive and Stock
Award Plan effective April 2017.
Quintiles IMS Incorporated Employee Protection Plan, effective
January 1, 2017.
Quintiles IMS Incorporated Savings Equalization Plan, effective
December 31, 2016.
Quintiles Transnational Corp. Elective Deferred Compensation
Plan, as amended and restated.
Quintiles IMS Holdings Inc. Non-Employee Director Deferral Plan,
effective January 1, 2017.
Amended and Restated Employment Agreement between IQVIA
Holdings Inc. and Ari Bousbib, dated February 18, 2019.
Stock Appreciation Rights Agreement between IMS Health
Holdings, Inc. and Ari Bousbib, dated February 10, 2015.
Amendment No. 1, dated December 31, 2015, to Stock
Appreciation Rights Agreement between IMS Health Holdings,
Inc. and Ari Bousbib dated February 10, 2015.
Restricted Stock Award Agreement between IMS Health Holdings,
Inc. and Ari Bousbib dated December 31, 2015.
Letter Agreement between the Company and W. Richard Staub, III,
effective on November 30, 2016.
Letter Agreement between the Company and Eric Sherbet, effective
on March 1, 2018.
Letter Agreement between the Company and Ronald Bruehlman,
effective on August 1, 2020.
117
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
S-1
IMS
Health
S-1
333-193159
10.19
January 2, 2014
333-193159
10.20
January 2, 2014
333-193159
10.21
January 2, 2014
333-193159
10.22
January 2, 2014
333-193159
10.15
January 2, 2014
8-K
001-35907
10.6
October 3, 2016
IMS
Health 8-
K
IMS
Health 8-
K
IMS
Health
S-1/A
DEF
14A
10-Q
001-36381
10.1
001-36381
10.2
February 10,
2015
February 10,
2015
333-193159
10.30
March 10, 2014
001-35907
001-35907
Appendi
x B
10.8
February 22,
2017
May 8, 2017
10-Q
001-35907
10.9
May 8, 2017
10-Q
001-35907
10.10
May 8, 2017
10-K
001-35907
10.69
10-K
001-35907
10.76
February 16,
2017
February 16,
2017
10-Q
001-35907
10.1
October 28, 2015
10-K
001-35907
10.78
10-K
001-35907
10.60
001-36381
10.34
001-36381
10.35
001-36381
10.36
IMS
Health
10-K
IMS
Health
10-K
IMS
Health
10-K
10-K
001-35907
10.104
10-K
001-35907
10.72
February 16,
2017
February 19,
2019
February 19,
2016
February 19,
2016
February 19,
2016
February 16,
2017
February 19,
2019
10-Q
001-35907
10.10
October 22, 2020
21.1
23.1
31.1
31.2
32.1
32.2
101
104
List of Subsidiaries of IQVIA Holdings Inc.
Consent of PricewaterhouseCoopers LLP.
Certification of Chief Executive Officer, pursuant to Rule
13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Certification of Executive Vice President and Chief Financial
Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
Certification of Executive Vice President and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Interactive Data Files Pursuant to Rule 405 of Regulation S-
T: (i) Consolidated Statements of Income, (ii) Consolidated
Statements of Comprehensive Income, (iii) Consolidated Balance
Sheets, (iv) Consolidated Statements of Cash Flows, (v) Notes to
Consolidated Financial Statements and (vi) Notes to Consolidated
Financial Statements. The instance document does not appear in the
Interactive Data File because its XBRL tags are embedded within
the Inline XBRL document.
Cover Page Interactive Data File. The instance document does
not appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document.
X
X
X
X
X
X
X
X
†
Indicates management contract or compensatory plan or arrangement.
*
The Merger Agreement and the description thereof included herein have been included to provide investors and stockholders with information
regarding the terms of the agreement. They are not intended to provide any other factual information about Quintiles or IMS Health or their
respective subsidiaries or affiliates or stockholders. The representations, warranties and covenants contained in the Merger Agreement were made
only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the parties to the Merger Agreement, may
be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of
allocating contractual risk among the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards
of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their
respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date
of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by Quintiles or IMS Health.
Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other
information about Quintiles or IMS Health and their respective subsidiaries that the respective companies include in reports, statements and other
filings they make with the United States Securities and Exchange Commission.
118
Item 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
IQVIA HOLDINGS INC.
By: /s/ Ronald E. Bruehlman
Name: Ronald E. Bruehlman
Title: Executive Vice President and Chief
Financial Officer
Date: February 12, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated
119
Signature
/s/ Ari Bousbib
Ari Bousbib
Title
Chairman, and Chief Executive Officer; Director
(Principal Executive Officer)
Date
February 12, 2021
/s/ Ronald E. Bruehlman
Ronald E. Bruehlman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 12, 2021
/s/ Emmanuel N. Korakis
Emmanuel N. Korakis
Senior Vice President, Corporate Controller
(Principal Accounting Officer)
February 12, 2021
/s/ Carol J. Burt
Carol J. Burt
/s/ John P. Connaughton
John P. Connaughton
/s/ John G. Danhakl
John G. Danhakl
/s/ James A. Fasano
James A. Fasano
/s/ Colleen A. Goggins
Colleen A. Goggins
/s/ John M. Leonard, M.D.
John M. Leonard, M.D.
/s/ Ronald A. Rittenmeyer
Ronald A. Rittenmeyer
/s/ Todd B. Sisitsky
Todd B. Sisitsky
Director
Director
Director
Director
Director
Director
Director
Director
February 12, 2021
February 12, 2021
February 12, 2021
February 12, 2021
February 12, 2021
February 12, 2021
February 12, 2021
February 12, 2021
120
(2) Financial Statement Schedules
Schedule I—Condensed Financial Information of Registrant
IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF INCOME
(in millions)
Selling, general and administrative expenses
Loss from operations
Interest income
Other expense, net
Loss before income taxes and equity in earnings of subsidiary
Income tax benefit
(Loss) income before equity in earnings of subsidiary
Equity in earnings of subsidiary
Net income
Year Ended December 31,
2020
2019
2018
$
— $
— $
—
—
—
—
—
—
—
—
—
—
—
—
$
279
279 $
191
191 $
2
(2)
—
—
(2)
(1)
(1)
260
259
121
IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions)
Net income
Comprehensive income (loss) adjustments:
Unrealized (losses) gains on derivative instruments, net of
income tax expense (benefit) of $(10), $4 and $(5)
Defined benefit plan adjustments, net of income tax (benefit) expense of
$(15), $5 and $(4)
Foreign currency translation, net of income tax (benefit)
expense of $(145), $(30) and $50
Reclassification adjustments:
Losses (gains) on derivative instruments included in net income, net of income
tax expense of $3, $— and $1
Amortization of actuarial losses and prior service costs included in net income
Comprehensive income (loss)
Year Ended December 31,
2019
2018
2020
$
279 $
191 $
259
(30)
(54)
180
10
(15)
(30)
(41)
(1)
$
—
385 $
—
104 $
1
(8)
(255)
(12)
1
(14)
122
IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)
CONDENSED BALANCE SHEETS
ASSETS
December 31,
2020
2019
$
1 $
$
$
—
—
1
9,666
—
9,667 $
— $
—
—
3,664
2
3,666
11,095
1,277
(6,166)
(205)
6,001
$
9,667 $
3
—
—
3
9,667
—
9,670
—
—
—
3,664
3
3,667
11,049
998
(5,733)
(311)
6,003
9,670
(in millions, except per share data)
Current assets:
Cash and cash equivalents
Income taxes receivable
Other current assets and receivables
Total current assets
Investment in subsidiary
Receivable from parent company
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Income taxes payable
Total current liabilities
Investment in subsidiary
Payable to subsidiary
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital, 400.0 shares authorized at December 31, 2020 and
2019, $0.01 par value, 254.7 shares issued and 191.2 shares outstanding at December 31, 2020;
253.0 shares issued and 192.3 shares outstanding at December 31, 2019
Retained earnings
Treasury stock, at cost, 63.5 and 60.7 shares at December 31, 2020 and 2019,
respectively
Accumulated other comprehensive (loss) income
Total stockholders’ equity
Total liabilities and stockholders’ equity
123
IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2019
2018
2020
(in millions)
Operating activities:
259
143
2
—
404
983
983
15
—
(1,405)
3
(1,387)
—
—
1
1
Net Income
Adjustments to reconcile net income to cash provided by operating activities:
Subsidiary loss
$
279 $
191 $
(279)
—
Change in operating assets and liabilities:
Accounts payable and accrued expenses
Income taxes payable and other liabilities
Net cash provided by operating activities
Investing activities:
Investment in subsidiary, net of dividends received
Net cash provided by investing activities
Financing activities:
Proceeds related to employee stock purchase and option plans
Issuance of common stock
Repurchase of common stock
Intercompany with subsidiary
Net cash used in financing activities
Effect of foreign currency exchange rate changes on cash
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
—
—
$
— $
—
—
—
1
9
191 $
477
477
—
(44)
(434)
(1)
(479)
—
(2)
3
1 $
760
760
—
11
(963)
3
(949)
—
2
1
3 $
$
124
IQVIA HOLDINGS INC. (PARENT COMPANY ONLY)
NOTES TO CONDENSED FINANCIAL INFORMATION
The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of
Regulation S-X as the restricted net assets of IQVIA Holdings Inc.’s (the “Company”) wholly-owned subsidiary, IQVIA Incorporated
exceed 25% of the consolidated net assets of the Company. The ability of IQVIA Incorporated to pay dividends may be limited due to
the restrictive covenants in the agreements governing its credit arrangements.
These condensed parent company financial statements include the accounts of IQVIA Holdings Inc. on a standalone basis
(the “Parent”) and the equity method of accounting is used to reflect ownership interest in its subsidiary. Refer to the consolidated
financial statements and notes presented elsewhere herein for additional information and disclosures with respect to these financial
statements.
Since the Parent is part of a group that files a consolidated income tax return, in accordance with ASC 740, a portion of the
consolidated amount of current and deferred income tax expense of the Company has been allocated to the Parent. The income tax
benefit of $0 million, $0 million and $1 million in 2020, 2019 and 2018, respectively, represents the income tax benefit that will be or
were already utilized in the Company’s consolidated United States federal and state income tax returns. If the Parent was not part of
these consolidated income tax returns, it would not be able to recognize any income tax benefit, as it generates no revenue against
which the losses could be used on a separate filer basis.
Below is a summary of the dividends paid to the Parent by IQVIA Incorporated in 2020, 2019 and 2018:
(in millions)
Paid in December 2020
Paid in October 2020
Paid in July 2020
Paid in March 2020
Paid in February 2020
Total paid in 2020
Paid in December 2019
Paid in November 2019
Paid in September 2019
Paid in August 2019
Paid in June 2019
Paid in May 2019
Paid in March 2019
Paid in February 2019
Total paid in 2019
Paid in December 2018
Paid in November 2018
Paid in October 2018
Paid in September 2018
Paid in June 2018
Paid in May 2018
Paid in March 2018
Paid in February 2018
Total paid in 2018
125
$
$
$
$
Amount
81
20
2
44
333
480
13
255
74
239
94
140
141
3
959
339
146
132
118
414
154
54
37
$
1,394
Deferred Tax Asset Valuation Allowance
Schedule II—Valuation and Qualifying Accounts
(in millions)
December 31, 2020
December 31, 2019
December 31, 2018
Additions
Balance at
Beginning of
Year
Charged to
Expenses
Charged to
Other
Accounts(a)
Additions
(Deductions)
(b)
Balance at End
of Year
$
$
$
266
226
200
$
$
$
40
40
23
$
$
$
— $
— $
— $
— $
— $
3 $
306
266
226
(a)
(b)
Recorded through purchase accounting transaction.
Impact of reductions recorded to expense and translation adjustments.
126
IQVIA Holdings Inc.
Subsidiary Listing – as of 12/31/2020
Subsidiary
159 Solutions, LLC
159 Technology Solutions Private Ltd
Advanced Health Media Services Ltd.
AECIO IT Solutions India Private Ltd.
Albatross Financial Solutions Limited
ALIMED Egeszsegugyi Szolgaltato Kft.
Allcare Plus Pharmacy LLC
Aposphäre GmbH
Appature Inc.
Ardentia International Limited
Ascott Sales Integration Pty Ltd
Asesorias IQVIA Solutions Chile Limitada
Asserta Centroamerica Medicion de Mercados, S.A.
Avacare Clinical Research Network (Shanghai) Co., Ltd.
Battaerd Mansley (Proprietary) Limited
Battaerd Mansley Pty. Ltd.
Benefit Holding, Inc.
Biofortis, LLC
Branch of IQVIA RDS GesmbH in Novosibirsk
Branch of IQVIA RDS GesmbH in St. Petersburg
BuzzeoPDMA LLC
Cambridge Pharma Consultancy Inc.
Cambridge Pharma Consultancy Limited
CDS - Centre de Service SAS
Cegedim Venezuela C.A.
Cenduit (India) Services Private Company Limited
Cenduit GmbH
Cenduit Holdings, LLC
Cenduit Limited
Cenduit LLC
Cenduit LLC Shanghai Rep. Office
Cenduit Mauritius Holdings Company
Centrix Innovations (Pty) Ltd.
CFS Clinical UK Limited
Clinical Financial Services, LLC
Clinical Insourcing Solutions Limited
Clinical Insourcing Solutions S. de R.L. de C.V.
Clinical Lab Minority Shareholder Limited
Exhibit 21.1
Jurisdiction or
State of Organization
California
India
United Kingdom
India
United Kingdom
Hungary
Massachusetts
Germany
Washington
United Kingdom
Australia
Chile
Guatemala
China
South Africa
Australia
North Carolina
Delaware
Russian Federation
Russian Federation
Delaware
Delaware
United Kingdom
France
Venezuela
India
Switzerland
Delaware
United Kingdom
Delaware
China
Mauritius
South Africa
United Kingdom
Pennsylvania
Ireland
Mexico
United Kingdom
ClinTec Austria GmbH
ClinTec CRO Services (India) Private Limited
ClinTec Gesellschaft fur Klinische Entwicklung GmbH
ClinTec International (Pty) Ltd.
ClinTec International (Pty) Ltd. (Malawi branch)
ClinTec International (Thailand) Limited
ClinTec International AG
ClinTec International Belgium BV
ClinTec International Bulgaria OOD
ClinTec International Co., Ltd.
ClinTec International d.o.o. za trgov inuisludge
ClinTec International Denmark ApS
ClinTec International doo
ClinTec International FZ-LLC
ClinTec International Hong Kong Limited
ClinTec International Hungary Kft
Clintec International Inc.
ClinTec International Italy S.r.l.
ClinTec International Limited
ClinTec International Limited
ClinTec International Limited
ClinTec International LLC
ClinTec International Ltd (Netherlands Branch)
ClinTec International Ltd, UK, Filial Sverige
ClinTec International Ltd.
ClinTec International Norway AS
ClinTec International Off-Shore S.A.L.
Clintec International Pharmaceutical Services Ltd
ClinTec International Pte Ltd.
ClinTec International Pty Ltd
ClinTec International Romania S.R.L.
ClinTec International RUS LLC
ClinTec International S.à r.l.
ClinTec International s.r.o.
ClinTec International Services Inc.
ClinTec International SL
ClinTec International sp. z.o.o.
ClinTec Luxembourg S.A.
ClinTec Turkey Medikal ve Farmasotik Hizmetler Ticaret Limited Sirketi
ClinTech Ireland International Research Limited
Compliant Community Projects (Pty) Ltd.
Austria
India
Germany
South Africa
Malawi
Thailand
Switzerland
Belgium
Bulgaria
Republic of Korea
Croatia
Denmark
Serbia
United Arab Emirates
Hong Kong
Hungary
Massachusetts
Italy
Kenya
New Zealand
Taiwan
Ukraine
The Netherlands
Sweden
United Kingdom
Norway
Lebanon
Israel
Singapore
Australia
Romania
Russian Federation
France
Czechia
Canada
Spain
Poland
Luxembourg
Turkey
Ireland
South Africa
CoreZetta Co Ltd.
CRM Health Korea Ltd.
CSD Health Korea Ltd.
CT Clinical Portugal Unipessoal Lda
CT Clinical Services Eood
CT Consulting Inc.
Data Niche Associates, Inc.
Dataline Software Limited
Datandina Ecuador S.A.
Datec Industria e Comercio, Distribudora Grafica e Mala Direta Ltda.
Dimensions Healthcare Company Ltd
Dimensions Healthcare LLC
Dimensions Healthcare LLC (Dubai Branch)
DrugDev Inc.
DrugDev Limited
EA Institute, L.L.C.
Enterprise Associates L.L.C.
Epernicus, LLC
EPID Research Oy
EPID Research Sweden
EPS Research Limited
EPS Software Limited
Excel Life Sciences Inc.
Excel Life Sciences Pvt Ltd India
Forcea NV
Foresight IT Solutions and Consulting India Private Limited
GCE Clin Solutions Limited
GCE Global Solutions, LLC
GCE Solutions International, LLC
GCE Solutions Proprietary Limited
GCE Solutions, GmbH
GCE Solutions, S. de R.L. de C.V.
genae Germany Gmbh
genae International Ag
Global Crown Investment Limited
Grace Data Corp.
HighPoint Solutions, LLC
Highpoint Solutions, LLC (Geneva Branch)
Hospital Marketing Services Ltd.
Hotel Lot C-8B, LLC
Iasist Holdco Limited
Republic of Korea
Republic of Korea
Republic of Korea
Portugal
Bulgaria
Philippines
Illinois
United Kingdom
Ecuador
Brazil
Palestinian Territory
United Arab Emirates
United Arab Emirates
Delaware
United Kingdom
Delaware
Delaware
Delaware
Finland
Sweden
United Kingdom
United Kingdom
Delaware
India
Belgium
India
United Kingdom
Delaware
Delaware
South Africa
Switzerland
Mexico
Germany
Switzerland
Hong Kong
California
Delaware
Switzerland
United Kingdom
North Carolina
United Kingdom
Iasist Portugal, Consultadoria na Área de Saúde, Unipessoal, Lda
Iasist SAU Agencia en Chile
Iasist Sociedad Anonima Unipersonal
iGuard, Inc.
Impact RX Data Management (Pty) Ltd.
IMS (UK) Pension Plan Trustee Company Limited
IMS AB
IMS Government Solutions, Inc.
IMS Health (Australia) Partnership
IMS Health Analytics Services Private Limited
IMS Health de Venezuela C.A.
IMS Health Group Limited
IMS Health Information Solutions Australia Pty. Ltd
IMS Health Information Solutions India Private Ltd.
IMS Health Korea Ltd.
IMS Health Networks Limited
IMS Health Paraguay Srl
IMS Health Surveys Limited
IMS Health Uruguay S.A.
IMS Hospital Group Limited
IMS Information Solutions Medical Research Limited
IMS Information Solutions UK Ltd.
IMS International (Proprietary) Limited
IMS Meridian Limited
IMS Meridian Research Limited
IMS Software Services Ltd.
IMS Technology Solutions UK Limited
INCARNUS MALAYSIA SDN BHD
Infocus Health Limited
Infopharm Ltd.
Innovex Holdings I LLC
Innovex Merger Corp.
Innovex Saglik Urunleri Pazarlame ve Hizmet Danismanlik Anonim Sirketi
Intercontinental Medical Statistics International, Ltd.
Intercontinental Medical Statistics Kenya Ltd.
Interface Clinical Services Ltd.
Interstatistik AG
IPP Informacion Promocional y Publicitaria S.A. de C.V.
IQVIA Medical Development (Dalian) Co., Ltd.
IQVIA (Thailand) Co., Ltd.
IQVIA AB
Portugal
Chile
Spain
North Carolina
South Africa
United Kingdom
Sweden
Delaware
Australia
India
Venezuela
United Kingdom
Australia
India
Republic of Korea
United Kingdom
Paraguay
United Kingdom
Uruguay
United Kingdom
United Kingdom
United Kingdom
South Africa
Hong Kong
British Virgin Islands
Delaware
United Kingdom
Malaysia
United Kingdom
United Kingdom
Delaware
North Carolina
Turkey
Delaware
Kenya
United Kingdom
Switzerland
Mexico
China
Thailand
Sweden
IQVIA Adriatic d.o.o. za Konzalting
IQVIA AG
IQVIA AG (Basal Branch)
IQVIA AG (Dubai Branch)
IQVIA AG (Mexico Branch)
IQVIA AG (Representative Office - Algeria)
IQVIA AG (Representative Office - Dubai)
IQVIA AG (Representative Office - Jordan)
IQVIA AG (Representative Office - Lebanon)
IQVIA AG (Representative Office - Serbia)
IQVIA AG (Rotkreuz Branch)
IQVIA AG (UK Branch)
IQVIA Asia Pacific Commercial Holdings LLC
IQVIA Beteiligungsgesellschaft mbH
IQVIA BioSciences Holdings, LLC
IQVIA Biotech LLC
IQVIA Biotech Ltd.
IQVIA Chinametrik Inc.
IQVIA Clinical AB
IQVIA Clinical, Filial af IQVIA Clinical AB
IQVIA Commercial Consulting Sp. z.o.o.
IQVIA Commercial Deutschland Gmbh
IQVIA Commercial Finance Inc.
IQVIA Commercial GmbH & Co. OHG
IQVIA Commercial I LLC
IQVIA Commercial India Holdings Corp.
IQVIA Commercial Services LLC
IQVIA Commercial Software Gmbh
IQVIA Commercial Sp. z.o.o.
IQVIA Commercial Trading Corp.
IQVIA Consulting and Information Services India Private Limited
IQVIA Consulting Solutions BV
IQVIA CSMS GmbH
IQVIA CSMS US Inc.
IQVIA Finance Ireland Designated Activity Company
IQVIA FZ-LLC
IQVIA Government Solutions Inc.
IQVIA Healthcare (QFC Branch)
IQVIA Hellas Technology Solutions Single Member S.A.
IQVIA Holdings (UK) Ltd.
IQVIA Holdings France Sas
Croatia
Switzerland
Switzerland
United Arab Emirates
Mexico
Algeria
United Arab Emirates
Jordan
Lebanon
Serbia
Switzerland
United Kingdom
North Carolina
Germany
Delaware
Delaware
United Kingdom
Delaware
Sweden
Denmark
Poland
Germany
Delaware
Germany
Delaware
Delaware
Delaware
Germany
Poland
Delaware
India
Belgium
Germany
Delaware
Ireland
United Arab Emirates
Delaware
Qatar
Greece
United Kingdom
France
IQVIA IES Brasil Ltda.
IQVIA IES Denmark ApS
IQVIA IES Europe Limited
IQVIA IES European Holdings
IQVIA IES Italia S.r.L.
IQVIA IES Overseas Holdings Limited
IQVIA IES Oy
IQVIA IES Portugal Unipessoal LDA
IQVIA IES Puerto Rico Inc.
IQVIA IES South Africa (Pty) Limited
IQVIA IES UK Limited
IQVIA II Technology Solutions Portugal, Unipessoal LDA
IQVIA Inc.
IQVIA Inc. (Thailand Branch)
IQVIA Information Medical Statistics (Israel) Ltd.
IQVIA Information Solutions (China) Co., Ltd.
IQVIA Information Solutions GmbH
IQVIA Information, S.A.
IQVIA Integrated Services NL
IQVIA Investment Holdings Limited
IQVIA Korea Co. Ltd.
IQVIA Lebanon S.a.r.l.
IQVIA LTD.
IQVIA Market Intelligence, LLC
IQVIA Marktforschung GmbH
IQVIA Maroc S.à r.l.
IQVIA Medical Communications & Consulting, Inc.
IQVIA Medical Education Inc.
IQVIA Medical Radar AB
IQVIA MedTech Inc.
IQVIA MedTech NV
IQVIA Operations France SAS
IQVIA Partners AS
IQVIA Pharma Inc.
IQVIA Pharma Services Corp.
IQVIA Pharmaceutical Marketing Services Ltd.
IQVIA Phase One Services LLC
IQVIA RDS (India) Private Ltd.
IQVIA RDS (Pty.) Limited
IQVIA RDS (Shanghai) Co., Ltd.
IQVIA RDS AG
Brazil
Denmark
United Kingdom
United Kingdom
Italy
United Kingdom
Finland
Portugal
Puerto Rico
South Africa
United Kingdom
Portugal
Delaware
Thailand
Israel
China
Austria
Spain
The Netherlands
United Kingdom
Republic of Korea
Lebanon
United Kingdom
North Carolina
Austria
Morocco
New Jersey
New York
Sweden
Delaware
Belgium
France
Denmark
North Carolina
North Carolina
Slovenia
Kansas
India
South Africa
China
Switzerland
IQVIA RDS and Integrated Services Belgium NV
IQVIA RDS Argentina S.R.L.
IQVIA RDS Asia Inc.
IQVIA RDS Austria GmbH
IQVIA RDS Brasil Ltda.
IQVIA RDS BT Inc.
IQVIA RDS Bulgaria EOOD
IQVIA RDS Canada ULC
IQVIA RDS Chile
IQVIA RDS Clindata (Pty.) Ltd.
IQVIA RDS Clindepharm (Pty.) Ltd.
IQVIA RDS Colombia S.A.S.
IQVIA RDS Costa Rica S.A.
IQVIA RDS Czech Republic s.r.o.
IQVIA RDS d.o.o. Beograd
IQVIA RDS East Asia Pte. Ltd.
IQVIA RDS Eastern Holdings GmbH
IQVIA RDS Egypt LLC
IQVIA RDS Estonia OU
IQVIA RDS Finland Oy
IQVIA RDS France SAS
IQVIA RDS Funding LLC
IQVIA RDS GesmbH
IQVIA RDS GmbH
IQVIA RDS Guatemala S.A.
IQVIA RDS Hellas Single Member S.A.
IQVIA RDS Holdings
IQVIA RDS Hong Kong Limited
IQVIA RDS Hungary Pharmaceutical Development and Consulting Limited
Liability Company
IQVIA RDS Inc.
IQVIA RDS Ireland (Finance) Ltd.
IQVIA RDS Ireland Ltd.
IQVIA RDS Israel Ltd.
IQVIA RDS Italy S.r.l.
IQVIA RDS Latin America LLC
IQVIA RDS Latin America LLC (Argentina Branch)
IQVIA RDS Latvia SIA
IQVIA RDS Malaysia Sdn. Bhd.
IQVIA RDS Netherlands B.V.
IQVIA RDS Norway
IQVIA RDS Panama Inc.
Belgium
Argentina
North Carolina
Austria
Brazil
North Carolina
Bulgaria
NS, Canada
Chile
South Africa
South Africa
Colombia
Costa Rica
Czechia
Serbia
Singapore
Austria
Egypt
Estonia
Finland
France
North Carolina
Austria
Germany
Guatemala
Greece
United Kingdom
Hong Kong
Hungary
North Carolina
Ireland
Ireland
Israel
Italy
North Carolina
Argentina
Latvia
Malaysia
The Netherlands
Norway
Panama
IQVIA RDS Peru S.r.l.
IQVIA RDS Philippines Inc.
IQVIA RDS Poland Sp. Zoo
IQVIA RDS Pty. Limited
IQVIA RDS Pty. Ltd.
IQVIA RDS Slovakia, s.r.o.
IQVIA RDS South Africa (Pty.) Ltd.
IQVIA RDS Spain S.L.
IQVIA RDS Spain, S.L. - Representação Permanente em Portugal
IQVIA RDS Switzerland S.à r.l.
IQVIA RDS Taiwan Ltd.
IQVIA RDS UAB
IQVIA RDS UK Holdings Ltd.
IQVIA RDS Ukraine
IQVIA RDS Vietnam LLC
IQVIA Research and Development Solutions Saudi Arabia Limited
IQVIA Romania S.R.L.
IQVIA Services Japan K.K.
IQVIA Soluções de Tecnologia do Brasil Ltda
IQVIA Solutions (NZ) Limited
IQVIA Solutions (Pty.) Ltd.
IQVIA Solutions a.s.
IQVIA Solutions Argentina S.A.
IQVIA Solutions Asia Pte. Ltd
IQVIA Solutions Australia Holdings Pty. Ltd.
IQVIA Solutions Australia Pty. Ltd.
IQVIA Solutions B.V.
IQVIA Solutions Bangladesh Limited
IQVIA Solutions Belgium BV
IQVIA Solutions Bolivia S.R.L.
IQVIA Solutions Bulgaria Eood
IQVIA SOLUTIONS CANADA INC
IQVIA Solutions Colombia S.A.
IQVIA Solutions Consulting Myanmar Company Limited
IQVIA Solutions del Peru S.A.
IQVIA Solutions Denmark AS
IQVIA Solutions do Brasil Ltda.
IQVIA Solutions Egypt Ltd.
IQVIA Solutions Enterprise Management Consulting (Shanghai) Co., Ltd (Beijing
Branch)
IQVIA Solutions Enterprise Management Consulting (Shanghai) Co., Ltd.
IQVIA Solutions Finance B.V.
IQVIA Solutions Finance UK I Ltd.
IQVIA Solutions Finance UK II Ltd.
IQVIA Solutions Finance UK III Ltd.
Peru
Philippines
Poland
Australia
New Zealand
Slovakia
South Africa
Spain
Portugal
Switzerland
Taiwan
Lithuania
United Kingdom
Ukraine
Vietnam
Saudi Arabia
Romania
Delaware
Brazil
New Zealand
South Africa
Czechia
Argentina
Singapore
Australia
Australia
Netherlands
Bangladesh
Belgium
Bolivia
Bulgaria
Canada
Colombia
Myanmar
Peru
Denmark
Brazil
Egypt
China
China
Netherlands
United Kingdom
United Kingdom
United Kingdom
IQVIA Solutions Finance UK V Ltd.
IQVIA Solutions Finland OY
IQVIA Solutions Global Holdings UK Ltd.
IQVIA Solutions Holdings (Pty.) Ltd.
IQVIA Solutions Hong Kong Limited
IQVIA Solutions HQ Ltd.
IQVIA Solutions Ireland Limited
IQVIA Solutions Italy S.r.l.
IQVIA Solutions Japan K.K.
IQVIA Solutions Kazakhstan LLC
IQVIA Solutions Lanka (Private) Limited
IQVIA Solutions LLC
IQVIA Solutions Malaysia Sdn. Bhd.
IQVIA Solutions Norway AS
IQVIA Solutions Operations Center Philippines Inc.
IQVIA Solutions Pakistan (Private) Limited
IQVIA Solutions Pharmaceutical Srl
IQVIA Solutions Philippines Inc.
IQVIA Solutions Portugal, Lda
IQVIA Solutions Puerto Rico Inc.
IQVIA Solutions Regional Pte. Ltd.
IQVIA Solutions Republica Dominicana, S.R.L.
IQVIA Solutions s.r.o.
IQVIA Solutions Saudi Arabia Limited
IQVIA Solutions Services Ltd.
IQVIA Solutions Sweden AB
Iqvia Solutions Taiwan Ltd.
IQVIA Solutions Tunisia S.à r.l.
IQVIA Solutions UK Investments Ltd.
IQVIA Solutions UK Limited
IQVIA Staff Services Sp.A.
IQVIA Technology Services Ltd.
IQVIA Technology Solutions (China) Co., Ltd.
IQVIA Technology Solutions Colombia Ltda.
IQVIA Technology Solutions Egypt LLC
IQVIA Technology Solutions Finland Oy
IQVIA Technology Solutions Poland SP. z.o.o
IQVIA Technology Solutions Romania Srl
IQVIA Technology Solutions s.r.o.
IQVIA Technology Solutions s.r.o.
IQVIA Technology Solutions S.R.O. (Bulgaria Branch)
IQVIA Technology Solutions Ukraine LLC
IQVIA Technology Tunisia S.à r.l.
IQVIA Tibbi Istatistik Ticaret ve Musavirlik Ltd. Sirketi
United Kingdom
Finland
United Kingdom
South Africa
Hong Kong
United Kingdom
Ireland
Italy
Delaware
Kazakhstan
Sri Lanka
Russian Federation
Malaysia
Norway
Philippines
Pakistan
Romania
Philippines
Portugal
Puerto Rico
Singapore
Dominican Republic
Slovakia
Saudi Arabia
Hungary
Sweden
Taiwan
Tunisia
United Kingdom
United Kingdom
Italy
United Kingdom
China
Colombia
Egypt
Finland
Poland
Romania
Slovakia
Czechia
Bulgaria
Ukraine
Tunisia
Turkey
IQVIA Trading Management Inc.
IQVIA Transportation Services Corp.
IQVIA World Publications Ltd.
IQVIA Zagreb d.o.o.
Jäger Health Gmbh
Kun Tai Medical Development Hong Kong Limited
Kun Tuo Medical Research & Development (Beijing) Co. Ltd.
Laboratorio Commuq Pharma SLU
Linguamatics Limited
Linguamatics Solutions Limited
M&H Informatics (BD) Ltd.
Mecurial Insights Holding Pty. Ltd.
Mecurial Insights Pty. Ltd.
Meddata Group, LLC
MedicSense Ltd.
Medineos S.r.l.
Med-Vantage, Inc.
Mercados Y Analisis, S.A.
Meridian Research Vietnam Ltd.
Novasyte, LLC
Novex Pharma Laboratorio S.L.
Novex Pharma Limited
Nuevo Health Pty Ltd
Operaciones Centralizadas Latinoamericana Limitada
Optimum Contact Limited
Outcome Sciences, LLC
Penderwood Limited
Pharma Deals Limited
Pharma Strategy Group Limited
Pharmadata s.r.o.
Pharmaforce, S.A. de C.V.
PharmARC Consulting Services Gmbh
Pharmarc Inc.
Polaris Management Partners, LLC
Polaris Solutions Ltd.
Polaris Solutions, LLC
PR Editions S.A.S.
Privacy Analytics Inc.
Professional Pharmaceutical Marketing Services (Pty.) Ltd.
Prometheus Research, LLC
PT IQVIA RDS Indonesia
Delaware
Delaware
United Kingdom
Croatia
Germany
Hong Kong
China
Spain
United Kingdom
United Kingdom
Bangladesh
Australia
Australia
Massachusetts
Israel
Italy
Delaware
Spain
Vietnam
California
Spain
United Kingdom
Australia
Chile
United Kingdom
Delaware
United Kingdom
United Kingdom
United Kingdom
Slovakia
Mexico
Switzerland
New Jersey
New Jersey
Hong Kong
New York
France
Canada
South Africa
Connecticut
Indonesia
PT IQVIA Solutions Indonesia
Public Relations Algeria
Q Squared Solutions (Beijing) Co., Ltd.
Q Squared Solutions (India) Private Limited
Q Squared Solutions (Quest) Limited
Q Squared Solutions (Quest) LLC
Q Squared Solutions (Shanghai) Co., Ltd.
Q Squared Solutions B.V.
Q Squared Solutions BioSciences LLC
Q Squared Solutions China (Quest) Limited
Q Squared Solutions China Limited
Q Squared Solutions Expression Analysis LLC
Q Squared Solutions Holdings B.V.
Q Squared Solutions Holdings Limited
Q Squared Solutions Holdings LLC
Q Squared Solutions KK
Q Squared Solutions Limited
Q Squared Solutions LLC
Q Squared Solutions Proprietary Limited
Q Squared Solutions Pte. Ltd.
Q Squared Solutions S.A.
Qcare Site Services, Inc.
QH Research Limited
QIMS Pharma Services Sa De Cv
Quality Health Limited
Quintiles Benin Ltd.
Quintiles Clinical and Commercial Nigeria Limited
Quintiles Commercial Laboratorio S.L.U.
Quintiles Commercial Rus LLC
Quintiles East Africa Limited
Quintiles Finance Uruguay S.r.L.
Quintiles IMS Japan GK
Quintiles Lanka (Private) Limited
Quintiles Mauritius Holdings
Quintiles Medical Development (Shanghai) Co., Ltd.
Quintiles Mexico, S. de R.L. de C.V.
Quintiles New Zealand
Quintiles Phase One Clinical Trials India Private Limited
Quintiles RDS Latin America LLC
Quintiles Site Services, S.A.
Quintiles West Africa Limited
Indonesia
Algeria
China
India
United Kingdom
Delaware
China
The Netherlands
Delaware
United Kingdom
United Kingdom
Delaware
The Netherlands
United Kingdom
Delaware
Japan
United Kingdom
North Carolina
South Africa
Singapore
Argentina
North Carolina
United Kingdom
Mexico
United Kingdom
Benin
Nigeria
Spain
Russian Federation
Kenya
Uruguay
Japan
Sri Lanka
Mauritius
China
Mexico
New Zealand
India
Argentina
Costa Rica
Ghana
Radar Acquisition Blocker, Inc.
Redsite Limited
Representative Office of IQVIA RDS GesmbH in Moscow
RX India, LLC
Schwarzeck Verlag Gmbh
Secureconsent, LLC
Shanghai IMS Market Research Co. Ltd.
Smart I.T. Systems BV
Source Informatics Limited
Spartan Leasing Corporation
StatFin Estonia
Statfinn Oy
STI Technologies Limited
Targeted Molecular Diagnostics, LLC
Tarius A/S
Temas Srl - Società Unipersonale
TforG Support NV
The Amundsen Group, Inc.
Themis Limited
UAB IQVIA Commercial
Valuecentric Global Services Gmbh
Valuecentric Privacy Solutions LLC
Valuemedics Research, LLC
VCG&A, Inc.
VCG-BIO, Inc.
Vivacity Health Pty. Ltd.
Delaware
United Kingdom
Russian Federation
Delaware
Germany
Delaware
China
Belgium
United Kingdom
Delaware
Estonia
Finland
Canada
Illinois
Denmark
Italy
Belgium
Massachusetts
United Kingdom
Lithuania
Switzerland
Delaware
Delaware
Massachusetts
Delaware
Australia
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-213927,
333-193212, 333-188431) of IQVIA Holdings Inc. of our report dated February 12, 2021 relating to the financial
statements and financial statement schedules and the effectiveness of internal control over financial reporting, which
appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
February 12, 2021
Exhibit 31.1
CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Ari Bousbib, certify that:
1. I have reviewed this annual report on Form 10-K of IQVIA Holdings Inc. (the "registrant");
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: February 12, 2021
/s/ Ari Bousbib
Ari Bousbib
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Ronald E. Bruehlman, certify that:
1. I have reviewed this annual report on Form 10-K of IQVIA Holdings Inc. (the "registrant");
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: February 12, 2021
/s/ Ronald E. Bruehlman
Ronald E. Bruehlman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Ari Bousbib, Chairman, Chief Executive Officer and President of IQVIA Holdings Inc. (the "Company"), do hereby certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge:
(1) the Annual Report on Form 10-K of the Company for the year ended December 31, 2020 (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company for the periods presented therein.
Date: February 12, 2021
/s/ Ari Bousbib
Ari Bousbib
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
This certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed "filed" by the Company for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the Company
under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or
after the date of this Report, irrespective of any general incorporation language contained in such filing.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon
request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Ronald E. Bruehlman, Executive Vice President and Chief Financial Officer of IQVIA Holdings Inc. (the "Company"), do
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to the best of my knowledge:
(1) the Annual Report on Form 10-K of the Company for the year ended December 31, 2020 (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company for the periods presented therein.
Date: February 12, 2021
/s/ Ronald E. Bruehlman
Ronald E. Bruehlman
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
This certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed "filed" by the Company for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the Company
under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or
after the date of this Report, irrespective of any general incorporation language contained in such filing.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon
request.