IQVIA Holdings (IQV) 10-K risk factor changes: FY2019 vs FY2018

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.

Risks Relating to Our Business

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:

| | • | 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; |

| --- | --- | --- |

| | • | product withdrawal following market launch; or |

| --- | --- | --- |

| | • | shut down of manufacturing facilities. |

| --- | --- | --- |

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 maintain our margins, 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.

Powered by the IQVIA [removed: CORE™,] [added: CORE,] we deliver unique and actionable insights at the intersection of large scale analytics, transformative technology and extensive domain expertise, as well as execution capabilities to 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.

With [removed: more than 58,000] [added: approximately 67,000] employees, we conduct operations in more than 100 countries.

Technology & Analytics Solutions provides critical information, technology solutions and [removed: real-world insights] [added: real world solutions] and services to our life science clients.

For a description of our service offerings within our segments, refer to [removed: “Business” within] Part I, Item 1, [removed: of this Annual Report on Form 10-K.][added: “Business”.]

See Note [removed: 1] [added: 4] to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for [removed: more information about these changes.][added: additional information.]

For information about the industry outlook and markets that we operate in, refer to [removed: “Our Market Outlook” within] Part I, Item [removed: I of this Annual Report on Form 10-K.][added: I, “Our Market Outlook”.]

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, [removed: 2018] [added: 2019] and [removed: 2017.][added: 2018.]

These transactions were accounted for as business combinations and the acquired results of operations are included in our consolidated financial information since the acquisition [removed: date with a non-controlling interest for the portion that we do not own.][added: date.]

[removed: Foreign] [added: Foreign] Currency [removed: Translation][added: Translation]

In [removed: 2018,] [added: 2019,] approximately 40% of our revenues were denominated in currencies other than the United States dollar, which represents approximately 55 currencies.

Because a large portion of our revenues and expenses are denominated in [added: foreign] currencies [removed: other than the United States dollar] and our financial statements are reported in United States dollars, changes in foreign currency exchange rates can significantly affect our results of operations.

Accordingly, exchange rate fluctuations will affect the translation of foreign results into United States dollars for purposes of reporting our [added: condensed] consolidated results.

As a result, we believe that [removed: providing] [added: reporting results of operations that exclude] the [removed: impact] [added: effects] of [removed: fluctuations in] foreign currency [removed: rates] [added: rate fluctuations] on certain financial results can facilitate [removed: the] analysis of [removed: period-to-period comparisons of business performance that excludes the effects of foreign currency rate fluctuations.][added: period to period comparisons.]

[removed: The] [added: 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.

[removed: Revenues][added: Revenues]

| | | Year Ended December 31, | | | | | | | | | | | | [removed: 2018] [added: 2019] vs. [removed: 2017] [added: 2018] | | | | | | | | [removed: 2017] [added: 2018] vs. [removed: 2016] [added: 2017] | | | | | | |

| (dollars in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | $ | | | | % | | | | $ | | | | % | | |

| Revenues | | $ | [removed: 10,412] [added: 11,088] | | | $ | [removed: 9,702] [added: 10,412] | | | $ | [removed: 6,815] [added: 9,702] | | | $ | [removed: 710] [added: 676] | | | | [removed: 7.3] [added: 6.5] | % | | $ | [removed: 2,887] [added: 710] | | | | [removed: 42.4] [added: 7.3] | % |

[removed: 2018] [added: 2019] compared to [removed: 2017][added: 2018]

This increase was comprised of constant currency [removed: revenue] growth of approximately [removed: $664] [added: $369] million, or [removed: 6.8%,] [added: 15.7%,] and a positive impact of approximately [removed: $46] [added: $49] million from the effects of foreign currency fluctuations.

The constant currency revenue growth was comprised of a $444 million increase in Technology & Analytics Solutions, a [removed: $332] [added: $378] million increase in Research & Development Solutions and a [removed: $112] [added: $13] million [removed: decrease] [added: increase] in Contract Sales & Medical Solutions.

This increase was comprised of [added: a] constant currency revenue growth of approximately [removed: $2,869] [added: $13] million, or [removed: 42.1%,] [added: 1.6%,] and a [removed: positive] [added: negative] impact of approximately [removed: $18] [added: $9] million from the effects of foreign currency fluctuations.

The constant currency [removed: revenue] growth was comprised of a [removed: $2,508] [added: $369] million increase in Technology & Analytics Solutions, [removed: which includes $2,557 million from the Merger, partially offset by lower revenue from Encore during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017,] a [removed: $371] [added: $295] million increase in Research & Development Solutions and a [removed: $10] [added: $26] million [removed: decrease] [added: increase] in Contract Sales & Medical Solutions.

| (dollars in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Costs of revenue, exclusive of depreciation and amortization | | $ | [removed: 6,746] [added: 7,300] | | | $ | [removed: 6,301] [added: 6,746] | | | $ | [removed: 4,748] [added: 6,301] | |

| % of revenues | | | [removed: 64.8] [added: 65.8] | % | | | [removed: 64.9] [added: 64.8] | % | | | [removed: 69.7] [added: 64.9] | % |

[removed: 2018] [added: 2019] compared to [removed: 2017][added: 2018]

When compared to [removed: 2017,] [added: 2018,] costs of revenue, exclusive of depreciation and amortization, in [removed: 2018] [added: 2019] increased [removed: $445] [added: $554] million, or [removed: 7.1%.][added: 8.2%.]

This increase included a constant currency increase of approximately [removed: $421] [added: $690] million, or [removed: 6.7%,] [added: 10.2%,] and a [removed: negative] [added: positive] impact of approximately [removed: $24] [added: $136] million from the effects of foreign currency fluctuations.

As a percent of revenues, costs of revenue remained flat compared to [removed: 2017.][added: 2018.]

[removed: When compared to 2016,] [added: Research & Development Solutions’] costs of revenue, exclusive of depreciation and amortization, [removed: in 2017] increased [removed: $1,553] [added: $215] million, or [removed: 32.7%.][added: 5.8%, in 2019 as compared to 2018.]

This increase included a constant currency increase of approximately [removed: $1,555] [added: $295] million, or [removed: 32.8%, partially offset by] [added: 7.9%, and] a positive impact of approximately [removed: $2] [added: $80] million from the effects of foreign currency fluctuations.

[added: |] Selling, [removed: General] [added: general] and [removed: Administrative Expenses][added: administrative expenses | | | 61 | | | | 67 | | | | 78 | | | | (6 | ) | | | (9.0 | ) | | | (11 | ) | | | (14.1 | ) |]

| (dollars in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Selling, general and administrative expenses | | $ | [removed: 1,716] [added: 1,734] | | | $ | [removed: 1,622] [added: 1,716] | | | $ | [removed: 1,016] [added: 1,622] | |

| % of revenues | | | [removed: 16.5] [added: 15.6] | % | | | [removed: 16.7] [added: 16.5] | % | | | [removed: 14.9] [added: 16.7] | % |

[removed: 2018] [added: 2019] compared to [removed: 2017][added: 2018]

The [removed: $94] [added: $18] million increase in selling, general and administrative expenses in [removed: 2018] [added: 2019] as compared to [removed: 2017] [added: 2018] included a constant currency increase of approximately [removed: $86] [added: $60] million, or [removed: 5.3%,] [added: 3.5%,] and a [removed: negative] [added: positive] impact of approximately [removed: $8] [added: $42] million from the effects of foreign currency fluctuations.

The constant currency growth primarily consisted of a [removed: $47 million increase in Technology & Analytics Solutions, a $33] [added: $34] million increase in Research & Development Solutions and a [removed: $10] [added: $37] million increase in general corporate and unallocated expenses.

These increases were partially offset by a [removed: $4] [added: $6] million decrease in [added: Technology & Analytics Solutions and a $5 million decrease in] Contract Sales & Medical Solutions.

For a discussion of our results of operations comparison for 2018 and 2017, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed on February 19, 2019.

Our reportable segment results of operations comparison for 2018 and 2017 included below within this Annual Report on Form 10-K reflects the change in segment presentation that occurred during the first quarter of 2019.

In 2019, our revenues increased $676 million, or 6.5%, as compared to 2018.

During 2019, we incurred $24 million of 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.

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.

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.

It is expected that during 2020 the U.S. Treasury Department will issue final regulations on FDII.

result of the Merger.

Equity in earnings (losses) of unconsolidated affiliates decreased in 2019 compared to 2018 primarily as a result of earnings from our investment in NovaQuest Pharma Opportunities Fund III, L.P. that were recognized in 2018 that did not reoccur in 2019.

| Technology & Analytics Solutions | | $ | 4,486 | | | $ | 4,137 | | | $ | 3,682 | | | $ | 1,101 | | | $ | 1,041 | | | $ | 998 | |

| Research & Development Solutions | | | 5,788 | | | | 5,465 | | | | 5,105 | | | | 1,141 | | | | 1,055 | | | | 861 | |

| Total | | | 11,088 | | | | 10,412 | | | | 9,702 | | | | 2,294 | | | | 2,157 | | | | 1,928 | |

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

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 and 2017.

| Selling, general and administrative expenses | | | 722 | | | | 753 | | | | 717 | | | | (31 | ) | | | (4.1 | ) | | | 36 | | | | 5.0 | |

| Segment profit | | $ | 1,101 | | | $ | 1,041 | | | $ | 998 | | | $ | 60 | | | | 5.8 | % | | $ | 43 | | | | 4.3 | % |

The constant currency decrease was primarily related to cost savings initiatives.

| Selling, general and administrative expenses | | | 711 | | | | 689 | | | | 678 | | | | 22 | | | | 3.2 | | | | 11 | | | | 1.6 | |

| Segment profit | | $ | 1,141 | | | $ | 1,055 | | | $ | 861 | | | $ | 86 | | | | 8.2 | % | | $ | 194 | | | | 22.5 | % |

Compensation and related expenses increased as a result of higher headcount to support revenue growth.

| Segment profit | | $ | 52 | | | $ | 61 | | | $ | 69 | | | $ | (9 | ) | | | (14.8 | )% | | $ | (8 | ) | | | (11.6 | )% |

Our long-term debt arrangements contain customary restrictive covenants and, as of December 31, 2019, we believe we were in compliance with our restrictive covenants in all material respects.

The increase is primarily due to improved collections on receivables, higher cash-related net income and the timing of income tax and other payables.

The decrease in cash used in financing activities was primarily related to fewer share repurchases ($456 million), proceeds from debt issuance ($269 million), partially offset by repayment of revolving credit facility, net of proceeds ($370 million) and debt repayment ($167 million).

| Operating leases | | | 160 | | | | 234 | | | | 135 | | | | 86 | | | | 615 | |

| Data acquisition | | | 355 | | | | 429 | | | | 132 | | | | 7 | | | | 923 | |

| Total | | $ | 1,068 | | | $ | 1,983 | | | $ | 4,825 | | | $ | 7,710 | | | $ | 15,586 | |

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 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.

We renamed two of our reportable segments during the second quarter of 2018.

The reportable segment formerly known as Commercial Solutions is now named Technology & Analytics Solutions and the reportable segment formerly known as Integrated Engagement Services is now named Contract Sales & Medical Solutions.

This is a name change only and there are no changes to the composition of either segment.

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, we retrospectively adjusted 2017 and 2016 related presentations in our consolidated financial statements and amounts and disclosures set forth in this Annual Report on Form 10-K reflect these changes.

In October 2016, we completed the Merger to better serve our clients across their entire product lifecycle by (i) increasing the efficiency of healthcare companies’ commercial organizations through enhanced analytics and outsourcing services; (ii) improving clinical trial design, recruitment, and execution; and (iii) creating real-world information solutions based on the use of medicines by actual patients in normal situations.

In 2018, our revenues increased $710 million, or 7.3%, as compared to 2017.

2017 compared to 2016

In 2017, our revenues increased $2,887 million, or 42.4%, as compared to 2016.

| | | Year Ended December 31, | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The constant currency growth was comprised of a $361 million increase in Technology & Analytics Solutions, a $151 million increase in Research & Development Solutions and a $91 million decrease in Contract Sales & Medical Solutions.

2017 compared to 2016

The constant currency growth was comprised of a $1,263 million increase in Technology & Analytics Solutions, which included $1,302 million from the Merger, partially offset by lower costs from Encore during the first half of 2017 and the sale of Encore at the beginning of the third quarter of 2017, a $290 million increase in Research & Development Solutions and a $2 million increase in Contract Sales & Medical Solutions.

As a percent of revenues, costs of revenue declined in 2017 to 64.9% as compared to 69.7% in 2016.

This decline was primarily due to the fact that 2017 includes a lower proportion of revenues from the lower margin Contract Sales & Medical Solutions segment, primarily as a result of the Merger.

2017 compared to 2016

The constant currency growth primarily consisted of a $491 million increase in Technology & Analytics Solutions, primarily from the Merger, a $6 million increase in Research & Development Solutions and a $111 million increase in general corporate and unallocated expenses.

These increases were partially offset by a $9 million decrease in Contract Sales & Medical Solutions.

The $722 million increase in depreciation and amortization in 2017 as compared to 2016 was primarily due to the approximately $6.4 billion of intangible assets acquired in the Merger.

Merger Related Costs

| Merger related costs | | $ | — | | | $ | — | | | $ | 87 | |

During 2016, we recognized $87 million of merger related costs.

Merger related costs include the direct and incremental costs associated with the Merger such as (i) investment banking, legal, accounting and consulting fees, (ii) incremental compensation costs triggered under change in control provisions in executive employment agreements, (iii) compensation and related costs of employees 100% dedicated to merger-related integration activities and (iv) severance and other termination costs associated with employees whose positions became redundant as a result of the Merger.

Interest expense during 2017 was higher than 2016 due to an increase in the average debt outstanding, primarily as a result of the debt assumed in the Merger, the refinancing transaction in the fourth quarter of 2016 (approximately $4.5 billion) and the 2017 debt issuances noted above.

During 2017, we recognized a $19 million loss on extinguishment of debt for fees and expenses incurred related to the refinancing of our senior notes and Senior Secured Credit Facilities, which included a $16 million make-whole premium.

In the fourth quarter of 2016, we recognized a $31 million loss on extinguishment of debt related to the refinancing of our Senior Secured Credit Facilities.

The loss on extinguishment of debt included an $8 million make-whole premium, $9 million of unamortized debt issuance costs and $14 million of unamortized discount.

Other expense, net for 2017 primarily consisted of foreign currency net losses partially offset by higher return on pension assets and investment gains.

The foreign currency losses in 2017 were primarily the result of the combination of changes in intercompany loan balances from corporate legal entity integration and a weaker U.S. dollar.

Other income, net for 2016 primarily consisted of a gain on the sale of a cost basis investment partially offset by foreign currency net losses.

In 2016, due to the Merger, we reevaluated our indefinite reinvestment assertion based on the need for cash in the United States, including funding the Repurchase Program and potential acquisitions.

Accordingly, we changed our assertion with respect to $2,801 million of foreign earnings, including $1,865 million of IMS Health’s previously undistributed historical foreign earnings.

Deferred income taxes of $625 million were recorded in 2016 related to non-indefinitely reinvested foreign earnings.

Of that amount, $373 million was recorded through purchase accounting related to IMS Health’s historical foreign earnings and the remainder of $252 million was recorded through deferred income tax expense.

We are in the process of reviewing these regulations to determine if there is an impact on our effective income tax rate.

Equity in earnings (losses) of unconsolidated affiliates primarily included earnings from our investment in NovaQuest Pharma Opportunities Fund III, L.P. See Note 4 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to this fund.

| Technology & Analytics Solutions | | $ | 4,137 | | | $ | 3,682 | | | $ | 1,148 | | | $ | 1,023 | | | $ | 996 | | | $ | 235 | |

| Research & Development Solutions | | | 5,465 | | | | 5,105 | | | | 4,737 | | | | 1,128 | | | | 957 | | | | 875 | |

| Total | | | 10,412 | | | | 9,702 | | | | 6,815 | | | | 2,210 | | | | 2,027 | | | | 1,188 | |

[removed: We also] [added: 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 royalties.

The contractual value of our foreign exchange derivative instruments, all of which were foreign exchange forward contracts, was approximately [removed: $202] [added: $148] million at December 31, [removed: 2018.][added: 2019.]

The sensitivity analysis measures the potential [added: gain or] loss in fair values based on a hypothetical 10% change in foreign currency exchange rates.

The potential [removed: loss] [added: gain] in fair value for foreign exchange forward contracts based on a hypothetical 10% decrease in the value of the United States dollar or, in the case of non-United States dollar related contracts, the currency being purchased, was [removed: $5] [added: less than $1] million at December 31, [removed: 2018.][added: 2019.]

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 [removed: revenue, royalty] [added: revenue] or [removed: balance sheet exposure] [added: royalty] being hedged caused by the currency exchange rate fluctuation.

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 [removed: 2018] [added: 2019] by approximately [removed: $125] [added: $165] million.

As of December 31, [removed: 2018,] [added: 2019,] these borrowings (net of original issue discount) were [removed: €4,590] [added: €5,273] million [removed: ($5,253] [added: ($5,915] million).

A hypothetical 10% decrease in the value of the United States dollar would lead to a potential loss in fair value of [removed: $525] [added: $592] million.

We attempt to minimize interest rate risk and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate [removed: caps and] swaps.

We have entered into interest rate [removed: caps and] 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 [removed: caps and] swaps is offset by the opposite market impact on the related debt.

As of December 31, [removed: 2018,] [added: 2019,] we had approximately [removed: $6.4] [added: $5.9] billion of variable rate indebtedness and interest rate [removed: caps and] swaps with a notional value of [removed: $2.0] [added: $1.2] billion.

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 [removed: $12] [added: $11] million per year.

At December 31, [removed: 2018,] [added: 2019,] we held investments in marketable equity securities.

As of December 31, [removed: 2018,] [added: 2019,] the fair value of these investments was [removed: $47] [added: $62] 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 [removed: $5] [added: $6] million at December 31, [removed: 2018.][added: 2019.]

Accordingly, we enter into foreign currency forward contracts to minimize the impact of foreign exchange movements on non–functional currency assets and liabilities.

Powered by the IQVIA [removed: CORE™,] [added: CORE,] we deliver unique and actionable insights at the intersection of large scale analytics, transformative technology and extensive domain expertise as well as execution [removed: capabilities to 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.][added: capabilities.]

With [removed: more than 58,000] [added: approximately 67,000] employees, we conduct operations in more than 100 countries.

We have one of the largest and most comprehensive collections of healthcare information in the world, which includes more than [removed: 600] [added: 800] million 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 [removed: data] [added: information] set contains over [removed: 30] [added: 35] petabytes of proprietary data sourced from more than [removed: 140,000] [added: 150,000] data suppliers and covering [removed: approximately] [added: 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 [removed: 2017] [added: 2018] sales.

We standardize, curate, structure and integrate this [removed: data] [added: information] by applying our sophisticated analytics and leveraging our global technology infrastructure.

| | • | [removed: A] [added: A] leading healthcare-specific global IT [removed: infrastructure,] [added: infrastructure,] representing what we believe is one of the largest and most sophisticated information technology (“IT”) infrastructures in healthcare. We receive over [removed: 70] [added: 95] billion healthcare records annually, [added: 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; |

| | • | [removed: Analytics-driven] [added: Analytics-driven] clinical [removed: development,] [added: 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 [removed: 600] [added: 800] million non-identified patients globally; |

| | • | [removed: Robust real-world insights ecosystem,] [added: Robust real world solutions ecosystem,] with sophisticated retrospective database analytics, prospective [removed: real-world] [added: real world] data collection technology platforms and scientific expertise, which enables us to address critical healthcare issues of cost, value and patient outcomes; |

| | • | [removed: A] [added: A] growing set of proprietary clinical and commercial [removed: applications,] [added: 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 |

| | • | [removed: A] [added: A] staff of [removed: more than 58,000 employees] [added: approximately 67,000 employees] across the globe, including [removed: approximately 21,000] [added: over 23,000] Technology & Analytics Solutions employees, approximately [removed: 31,000] [added: 35,000] Research & Development Solutions employees and approximately [removed: 6,000] [added: 7,000] Contract Sales & Medical Solutions employees. |

| | • | [removed: Integration] [added: Integration] of information, analytics, technology, and domain expertise through the IQVIA [removed: CORE™,] [added: CORE,] 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. |

[removed: Our] [added: Our] Market [removed: Opportunity][added: Opportunity]

We compete in a market of greater than $230 billion consisting of outsourced research and development, real-world evidence and connected health and technology enabled [added: clinical and] commercial operations markets for life sciences companies and the broader healthcare industry.

| | • | [removed: Outsourced] [added: Outsourced] research and [removed: development:] [added: development:] Biopharmaceutical spending on drug development totaled over $100 billion in [removed: 2018.] [added: 2019.] Of that amount, we estimate that our addressable opportunity (clinical development spending excluding preclinical spending) was approximately $66 billion. The portion of this addressable opportunity that was outsourced in [removed: 2018,] [added: 2019,] based on our estimates, was approximately [removed: $32] [added: $35] billion; |

| | • | [removed: Real-World] [added: Real-World] Evidence and connected [removed: health:] [added: health:] Total addressable market of approximately $80 billion based on [removed: 2018] [added: 2019] 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 |

| | • | [removed: Technology] [added: Technology] enabled commercial [removed: operations:] [added: operations:] Total addressable market of approximately $50 billion based on [removed: 2018] [added: 2019] 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. |

We believe there are six key trends affecting our end markets that will create increasing demand for research and development [removed: services and] [added: services,] technology & analytics [added: solutions and contract and medical] solutions:

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 [removed: $1.2] [added: $1.25] trillion in revenue in [removed: 2018.][added: 2019.]

According to our research, revenue growth in the life sciences industry globally is expected to range from 3% to 6% between [removed: 2019] [added: 2020] and [removed: 2023.][added: 2024.]

According to the IQVIA Institute, it is estimated that spending on pharmaceuticals in emerging markets will expand at a 5% to 8% compound annual growth rate (“CAGR”) through [removed: 2023.][added: 2024.]

The IQVIA Institute also estimates that approximately 270 new molecular entities (“NMEs”) are expected to be approved between [removed: 2019] [added: 2020] and [removed: 2023,] [added: 2024,] compared to [removed: 230] [added: 236] between [removed: 2014] [added: 2015] and [removed: 2018,] [added: 2019,] and [removed: 182] [added: 200] between [removed: 2009] [added: 2010] and [removed: 2013.][added: 2014.]

[added: Increased Complexity in Research and Development.] Biopharmaceutical companies face environments in which it has become increasingly difficult to operate.

For example, the IQVIA [removed: CORE™] [added: CORE] 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.

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 [removed: 600] [added: 800] million non-identified patients.

By integrating these capabilities in the IQVIA [removed: CORE™,] [added: CORE,] 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 [removed: by running their clinical trials more efficiently and effectively] through more informed site [removed: selection and] [added: selection,] faster patient recruitment practices [removed: as well as through new innovations such as synthetic control arms to better leverage existing data to support future treatments] and virtual [removed: trials to improve patient centricity.][added: trials.]

We have a diversified base of over 8,000 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 $230 billion in [removed: 2018.][added: 2019.]

[removed: Real-World Insights.][added: Real World Solutions.]

[removed: We] [added: Our] use [removed: proprietary patient] [added: of a wide range of] privacy and security safeguards [removed: to] protect non-identified patient-level medical claims, prescriptions, electronic medical records, genomics, [removed: and social media data.]

We help our global customers across payers, providers, governments, and [removed: biopharmaceuticals] [added: biopharmaceutical companies] to answer critical questions about healthcare interventions related to safety, [removed: efficacy,] [added: effectiveness,] and value.

[removed: National information] [added: Information] offerings.

Our national offerings comprise unique services in over [removed: 90] [added: 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 widely used reference database that tracks approximately [removed: 16] [added: 20] 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.

[added: Q2 *Solutions.*] 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 [removed: genomic] [added: the full range of central laboratory, genomic, bioanalytical, ADME, discovery, vaccine] and [removed: bioanalytical] [added: biomarker] laboratory services [added: along with sample and consent tracking services] supporting clinical trials offerings within the joint venture, which is referred to as Q2 Solutions.

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 [added: product sales and] improving brand value at all stages of the product lifecycle from initial market entry to brands nearing patent expiry.

[removed: 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.

No single client accounted for 10% or more of our [removed: combined] [added: total] company revenues in [removed: 2018, 2017] [added: 2019, 2018] or [removed: 2016.][added: 2017.]

Our offerings compete with various firms, including Accenture, [added: Aetion, Boston Health Economics,] Cognizant Technology Solutions, Covance [removed: Inc. (the drug development business of Laboratory Corporation of America Holdings),] [added: Inc.,] Deloitte, [removed: Evidera,] [added: Evidera (now part of PPD),] GfK, LexisNexis Risk Solutions, IBM, Infosys, Kantar Health, McKinsey, Nielsen, OptumInsight, PAREXEL International Corporation, Press Ganey, RTI Health Solutions, [removed: Symphony Health Solutions (now part of] PRA Health [removed: Sciences), Synovate Healthcare, The Advisory Board, Trizetto,] [added: Sciences, Tempus,] Veeva, [removed: Verisk,] and ZS Associates.

Our primary competitors include Covance [removed: Inc. (the drug development business of Laboratory Corporation of America Holdings),] [added: Inc.,] ICON plc, PAREXEL International Corporation, Pharmaceutical Product Development, Inc., PRA Health Sciences, and Syneos Health, among others.

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.

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.

Technology platforms.

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.

patient reported outcome and social media data.

Our scaled information networks include more than 800 million 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.

Our patient engagement services combine insight from clinical trials and social listening,

As of December 31, 2019 the largest client based on its percentage of total company revenue contributed approximately 5%.

regulatory authorities expect that study results and data submitted to such authorities be based on clinical trials conducted in accordance with GCP provisions.

Environmental Protection Agency, the Nuclear Regulatory Commission, the Department of Transportation, the National Fire Protection Agency and the United States Drug Enforcement Administration (“DEA”).

\[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.

Risks Relating to Our Business

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:

| | • | 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; |

| --- | --- | --- |

Our mission-critical relationships with our life science clients consist of four important decision-making processes related to their product portfolios: Research and Development, Pre-Launch, Launch and In-Market.

We continue to develop software and services applications to further deepen our level of client integration by enabling our clients to enhance and/or automate many components of these key decision-making processes.

| | | | |

| --- | --- | --- | --- |

|  | | | |

| | | | |

| • Market opportunity assessment | • Drug pricing optimization | • Market access | • Commercial operations |

| | | | |

| • Project management and clinical monitoring | • Launch readiness | • Health technology assessment | • Sales force effectiveness |

| | | | |

| • Clinical trial support services | • Commercial planning | • Commercial readiness | • Sales force alignment |

| | | | |

| • Patient recruitment | • Brand positioning | • Forecasting | • Multi-channel marketing |

| | | | |

| • Clinical trial laboratory services | • Message testing | • Resource allocation | • Client relationship management |

| | | | |

| • Strategic clinical trial planning and design | • Influence networks | • Contract sales force | • Lifecycle management |

| | | | |

| | • Territory design | • Observational studies | |

| | | | |

| | | • Stakeholder engagement | |

We believe that a powerful component of our value proposition is the breadth and depth of intelligence we provide to help our clients address fundamental operational questions.

| | | | |

| --- | --- | --- | --- |

| | | | |

| User | Illustrative Questions | | |

| Research & Development | Which study sites have the target patients? | Are there enough patients for my clinical trial? | How long will trial enrollment take to hit target patient volumes? |

| | | | |

| Sales | Which providers generate the highest return on representative visit? | Does my sales representative drive appropriate prescribing? | How much should I pay my sales representative next month? |

| | | | |

| Marketing | What share of patients is appropriately treated? | Which underserved patient populations will benefit most from my new drug? | Is my brand gaining market share quickly enough to hit revenue forecasts? |

| | | | |

| Real-World Evidence/Pharmacovigilance | What is the likely impact of new therapies on costs and outcomes? | Are new therapies performing better against existing standards of care in real-world settings? | Does real-world data indicate adverse events not detected in clinical trials? |

Increased Complexity in Research and Development.

For example, the United States and European countries have recently released guidelines for the development of “biosimilar” products.

We believe that substantial opportunities exist to expand penetration of our market and further integrate our offerings in a broader cross-section of the healthcare marketplace, particularly connected healthcare.

Technology solutions.

We help healthcare stakeholders meet their increasing demand for faster insights and evidence by applying digital technology, scientific expertise, and machine learning to ever-expanding rich clinical data.

These solutions are an integral part of critical processes in life science companies around the world and are also used extensively by the investment and financial sectors that deal with life science companies.

Sub-national information offerings.

[removed: For additional information, see] [added: 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 [removed: 10-K.][added: 10-K and is incorporated by reference herein.]

We are involved in a variety of legal and tax proceedings, claims and litigation that arise from time to time in the ordinary course of business.

These actions may be commenced by various parties, including competitors, clients, current or former employees, government agencies or others.

We record a provision with respect to a proceeding, claim or litigation when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

However, even in instances where we have recorded an estimated liability, we are unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect our operating results, financial position or cash flows.

As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

Further, we routinely enter into agreements with our suppliers to acquire data and with our clients to sell data, all in the normal course of business.

In these agreements, we sometimes agree 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 related to the use of the data.

We have not accrued liability with respect to these matters, as the exposure is considered remote.

Based on our 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 our operating results, financial position or cash flows.

However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which it is resolved.

The following is a summary of the more significant legal matters involving the company.

Our wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services under contracts with the United States government.

United States government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the United States government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements.

IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract (the “GSA Contract”) which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005).

The potential noncompliance arose from two primary areas: first, at the direction of the government, work performed under one task order was invoiced under another task order without the appropriate modifications to the orders being made; and second, personnel who did not meet strict compliance with the labor categories component of the qualification requirements of the GSA Contract were assigned to contracts.

Upon discovery of the potential noncompliance, we began remediation efforts, promptly disclosed the potential noncompliance to the United States government and were accepted into the Department of Defense Voluntary Disclosure Program.

We filed a Voluntary Disclosure Program Report on August 29, 2008.

We are currently unable to determine the outcome of all of these matters pending the resolution of the Voluntary Disclosure Program process and the ultimate liability arising from these matters could exceed our current reserves.

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.

The Company believes the appeal is without merit and intends to vigorously defend 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.

We believe the indictment is without merit that we acted in compliance with all applicable laws at all times and intend to vigorously defend our position.

On January 10, 2017, IQVIA Inc., IMS Health Incorporated and IMS Software Services, Inc. (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 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.

| ☒ | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

For the fiscal year ended December 31, [removed: 2018][added: 2019]

| ☐ | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: IQVIA] [added: IQVIA] HOLDINGS [removed: INC.][added: INC.]

[removed: ][added: ]

| Title of [removed: Each Class:] [added: each class] | [added: | Trading Symbol(s) | |] Name of [removed: Each Exchange] [added: each exchange] on which [removed: Registered] [added: registered] |

| Common Stock, par value $0.01 per share | [added: | IQV | |] New York Stock Exchange |

[removed: 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).

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 [removed: 29, 2018,] [added: 28, 2019,] the last business day of the registrant’s most recently completed second quarter, was approximately [removed: $16.1] [added: $28.6] billion.

Portions of the registrant’s Proxy Statement for the [removed: 2019] [added: 2020] 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, [removed: 2018.][added: 2019.]

| [PART [removed: I](#PART_I_NEW)] [added: I](#PART_I)] | | |

| 1A. | [Risk [removed: Factors](#ITEM_1A_Risk_Factors)] [added: Factors](#ITEM_1A_RISK_FACTORS)] | [removed: 15] [added: 13] |

| 1B. | [Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | [removed: 37] [added: 34] |

| 2. | [Properties](#ITEM_2_PROPERTIES) | [removed: 37] [added: 35] |

| 3. | [Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | [removed: 37] [added: 35] |

| 4. | [Mine Safety Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES) | [removed: 38] [added: 35] |

| [PART II](#PART_II) | | [added: 36] |

| 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ITEM_5_MARKET_FOR_REGISTRANTS)] [added: Securities](#ITEM_5_MARKET_FOR_REGISTRANTS_COMMON_EQU)] | [removed: 39] [added: 36] |

| 6. | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | [removed: 42] [added: 39] |

| 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ITEM_7_MDA)] [added: Operations](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F)] | [removed: 44] [added: 41] |

| 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ITEM_7A_QUANTITATIVE)] [added: Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS)] | [removed: 64] [added: 54] |

| 8. | [Financial Statements and Supplementary [removed: Data](#ITEM_8_FINANCIAL_STATEMENTS_AND_SUPP)] [added: Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR)] | [removed: 66] [added: 55] |

| 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ITEM_9_CHANGES_IN_AND_DISAGREEMENTS)] [added: Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC)] | [removed: 122] [added: 104] |

| 9A. | [Controls and [removed: Procedures](#ITEM_9A_CONTROLS_AND_PROCEDURES)] [added: Procedures](#ITEM_9A_CONTROLS_PROCEDURES)] | [removed: 122] [added: 104] |

| 9B. | [Other [removed: Information](#ITEM_9B_OTHER_INFORMATION)] [added: Information](#ITEM_9B_OR_INFORMATION)] | [removed: 122] [added: 104] |

| [PART III](#PART_III) | | [added: 105] |

| 10. | [Directors, Executive Officers and Corporate [removed: Governance](#ITEM_10_DIRECTORS_EXECUTIVE)] [added: Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO)] | [removed: 123] [added: 105] |

| 11. | [Executive [removed: Compensation](#ITEM_11_Exec_Comp)] [added: Compensation](#ITEM_11_EXECUTIVE_COMPENSATION)] | [removed: 124] [added: 106] |

| 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ITEM_12_SECURITY_OWNERSHIP)] [added: Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF)] | [removed: 125] [added: 107] |

| 13. | [Certain Relationships and Related Transactions and Director [removed: Independence](#ITEM_13_CERTAIN_RELATIONSHIPS)] [added: Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR)] | [removed: 125] [added: 107] |

| 14. | [Principal Accountant Fees and [removed: Services](#ITEM_14_PRINCIPAL_ACCOUNTANT_FEES)] [added: Services](#ITEM_14_PRINCIPAL_ACCOUNTANT_FEES_SERVIC)] | [removed: 125] [added: 107] |

| [PART IV](#PART_IV) | | [added: 108] |

| 15. | [Exhibits and Financial Statement [removed: Schedules](#ITEM_15_EXHIBITS)] [added: Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH)] | [removed: 126] [added: 108] |

| | [Exhibit Index](#EXHIBIT_INDEX) | [removed: 127] [added: 109] |

| 16. | [Form 10-K Summary](#ITEM_16_FORM_10K_SUMMARY) | [removed: 131] [added: 113] |

[removed: Industry] [added: Industry] and Market [removed: Data][added: Data]

Other reports and information are available publicly through our IQVIA Institute for [removed: Healthcare Informatics] [added: Human Data Science] (the “IQVIA Institute”).

Our estimates and assumptions involve risks and uncertainties and are subject to change based on various factors, including those discussed in [removed: the] [added: Part I, Item IA,] “Risk [removed: Factors” section.][added: Factors”.]

| --- | --- | --- | --- | --- |

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

As of February 7, 2020, there were approximately 192,339,093 shares of the registrant’s common stock outstanding.

| | [Signatures](#SIGNATURES) | 114 |

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 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; 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; hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements; 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; 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; 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 risks associated with business disruptions caused by natural disasters, pandemics such as the COVID-19 (coronavirus) or international conflict or other disruptions outside of our control; the impact of changes in tax laws and regulations; and our ability to successfully integrate, and achieve expected benefits from, our acquired businesses.

10-K 1 iqv-10k_20181231.htm 10-K

| --- | --- |

| --- | --- |

| | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

| | |

| Class | Number of Shares Outstanding |

| Common Stock $0.01 par value | 197,599,861 shares outstanding as of February 12, 2019 |

| | [Signatures](#SIGNATURES) | 132 |

On May 3, 2016, Quintiles Transnational Holdings Inc. (“Quintiles”) and IMS Health Holdings, Inc. (“IMS Health”) entered into an Agreement and Plan of Merger (the “Merger Agreement”).

Effective October 3, 2016, pursuant to the Merger Agreement, IMS Health merged with and into Quintiles, with Quintiles continuing as the surviving corporation, and the separate corporate existence of IMS Health ceased (the “Merger”).

Quintiles was incorporated under the laws of the State of North Carolina on November 10, 2009, and immediately prior to the completion of the Merger, Quintiles converted to a Delaware corporation and changed its name to QuintilesIMS Holdings, Inc. On November 6, 2017, we changed our name to IQVIA Holdings Inc.

We renamed two of our reportable segments during the second quarter of 2018.

The reportable segment formerly known as Commercial Solutions is now named Technology & Analytics Solutions and the reportable segment formerly known as Integrated Engagement Services is now named Contract Sales & Medical Solutions.

This is a name change only and there are no changes to the composition of either segment.

As of December 31, [removed: 2018,] [added: 2019,] we had approximately [removed: 307] [added: 303] offices located in approximately [removed: 84] [added: 82] countries.

We own facilities in [removed: Barcelona, Spain;] Buenos Aires, Argentina; Caracas, Venezuela; Los Ruices, Venezuela; [removed: Lisbon, Portugal;] and Bangalore, India.

On February [removed: 12, 2019,] [added: 7, 2020,] we had approximately [removed: 40] [added: 35] stockholders of record as reported by our transfer agent.

We do not currently intend to pay dividends on our common stock, and no dividends were declared or paid in [removed: 2018] [added: 2019] or [removed: 2017.][added: 2018.]

However, we expect to reevaluate our dividend policy on a regular basis and may, subject to compliance with the covenants contained in our [removed: credit facilities] [added: Senior Secured Credit Facilities] and [added: long-term debt arrangements and] other considerations, determine to pay dividends in the future.

We did not sell any unregistered equity securities in [removed: 2018.][added: 2019.]

On October 30, 2013, our Board of Directors (the “Board”) approved an equity repurchase program (the “Repurchase Program”) authorizing the repurchase of up to [removed: $125] [added: $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 [removed: billion and] [added: billion,] $1.5 [added: billion, and $2.0] billion in 2015, 2016, [removed: 2017 and] [added: 2017,] 2018, [added: and 2019,] respectively, which increased the total amount that has been authorized under the Repurchase Program to [removed: $5.725] [added: $7.725] billion.

From inception of the Repurchase Program through December 31, [removed: 2018,] [added: 2019,] we have repurchased a total of [removed: $5,440 million] [added: $6.0 billion] of our securities under the Repurchase Program.

During the year ended December 31, [removed: 2018,] [added: 2019,] we repurchased [removed: 12.6 million] [added: 6,605,804] shares of our common stock [removed: at an average market price per share of $111.23] for [removed: an aggregate purchase price of $1,396] [added: approximately $944.8] million under the Repurchase Program.

These amounts include [removed: 6 million] [added: 1,000,000] shares of our common [removed: stock that] [added: stock, which] we repurchased directly from underwriters in connection with [removed: two] [added: a] secondary public [removed: offerings] [added: offering] of shares of our common stock held by certain of our [removed: sponsors] [added: Selling Stockholders] for an aggregate purchase price of [removed: $659] [added: $140.8 million and 1,000,000 shares of our common stock repurchased from certain Selling Stockholders in a private transaction for an aggregate purchase price of approximately $156.9] million.

As of December 31, [removed: 2018,] [added: 2019,] we had remaining authorization to repurchase up to [removed: $285 million] [added: $1.3 billion] of our common stock under the Repurchase Program.

Since the [removed: Merger,] [added: Merger between Quintiles and IMS health,] we have repurchased [removed: 56.4] [added: 62.9] million shares of our common stock at an average market price per share of [removed: $89.12] [added: $94.77] for an aggregate purchase price of [removed: $5,026 million.][added: $6.0 billion both under and outside of the Repurchase Program.]

The following table summarizes the monthly equity repurchase activity for the three months ended December 31, [removed: 2018] [added: 2019] and the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program.

[removed: Stock] [added: Stock] Performance [removed: Graph][added: Graph]

The following graph shows a comparison from December 31, [removed: 2013] [added: 2014] through December 31, [removed: 2018] [added: 2019] 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., [removed: Dun & Bradstreet Corporation,] 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 contract research companies, and thus share similar business model characteristics to IQVIA, or provide services to similar customers as IQVIA.

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, [removed: 2013,] [added: 2014,] assumes the reinvestments of dividends, if any.

[removed: ][added: ]

| | | [removed: 12/31/2013 | | | |] 12/31/2014 | | | | 12/31/2015 | | | | 12/31/2016 | | | | 12/31/2017 | | | | 12/31/2018 | | | [added: | 12/31/2019 | | |]

| October 1, 2019 – October 31, 2019 | | | — | | | $ | \- | | | | — | | | $ | 1,595 | |

| November 1, 2019 – November 30, 2019 | | | 1.8 | | | $ | 139.85 | | | | 1.8 | | | $ | 1,341 | |

| December 1, 2019 – December 31, 2019 | | | — | | | $ | \- | | | | — | | | $ | 1,341 | |

| | | | 1.8 | | | | | | | | 1.8 | | | | | |

| IQVIA | | $ | 100 | | | $ | 117 | | | $ | 129 | | | $ | 166 | | | $ | 197 | | | $ | 262 | |

| Peer Group | | $ | 100 | | | $ | 109 | | | $ | 112 | | | $ | 130 | | | $ | 124 | | | $ | 174 | |

| S&P 500 | | $ | 100 | | | $ | 101 | | | $ | 114 | | | $ | 138 | | | $ | 132 | | | $ | 174 | |

We may also repurchase shares of our common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act, which would permit shares of our common stock to be repurchased when we might otherwise be precluded from doing so by law.

Repurchases of vested in-the-money employee stock options were made through transactions between us and our employees (other than our executive officers, who were not eligible to participate in the program), and this aspect of the Repurchase Program expired in November 2013.

On February 13, 2019, our Board authorized an increase in the post-merger share repurchase authorization by $2.0 billion, resulting in approximately $2.3 billion remaining authorization.

| October 1, 2018 – October 31, 2018 | | | 1.4 | | | $ | 120.53 | | | | 1.4 | | | $ | 719 | |

| November 1, 2018 – November 30, 2018 | | | 2.9 | | | $ | 122.09 | | | | 2.9 | | | $ | 362 | |

| December 1, 2018 – December 31, 2018 | | | 0.7 | | | $ | 110.45 | | | | 0.7 | | | $ | 285 | |

| | | | 5.0 | | | | | | | | 5.0 | | | | | |

| IQVIA | | $ | 100 | | | $ | 127 | | | $ | 148 | | | $ | 164 | | | $ | 211 | | | $ | 251 | |

| Peer Group | | $ | 100 | | | $ | 111 | | | $ | 121 | | | $ | 124 | | | $ | 142 | | | $ | 132 | |

| S&P 500 | | $ | 100 | | | $ | 111 | | | $ | 111 | | | $ | 121 | | | $ | 145 | | | $ | 136 | |

We have derived the following consolidated statements of income data for [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] and consolidated balance sheet data as of December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] 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 [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] and consolidated balance sheet data as of December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] from our audited consolidated financial statements not included in this Annual Report on Form 10-K.

We have included the results of operations of [removed: IMS Health from the date of the Merger and of] acquired businesses from the respective date of acquisition.

| (in millions, except per share data) | | [removed: 2018] [added: 2019] | | | | [removed: 2017(4)] [added: 2018] | | | | [removed: 2016(4)(5)] [added: 2017(4)] | | | | [removed: 2015] [added: 2016(4)(5)] | | | | [removed: 2014] [added: 2015] | | |

| Revenues | | $ | [removed: 10,412] [added: 11,088] | | | $ | [removed: 9,702] [added: 10,412] | | | $ | [removed: 6,815] [added: 9,702] | | | $ | [removed: 5,737] [added: 6,815] | | | $ | [removed: 5,460] [added: 5,737] | |

| Costs of revenue, exclusive of depreciation and amortization | | | [removed: 6,746] [added: 7,300] | | | | [removed: 6,301] [added: 6,746] | | | | [removed: 4,748] [added: 6,301] | | | | [removed: 4,116] [added: 4,748] | | | | [removed: 3,959] [added: 4,116] | |

| Selling, general and administrative expenses | | | [removed: 1,716] [added: 1,734] | | | | [removed: 1,622] [added: 1,716] | | | | [removed: 1,016] [added: 1,622] | | | | [removed: 815] [added: 1,016] | | | | [removed: 781] [added: 815] | |

| Depreciation and amortization | | | [removed: 1,141] [added: 1,202] | | | | [removed: 1,011] [added: 1,141] | | | | [removed: 289] [added: 1,011] | | | | [removed: 128] [added: 289] | | | | [removed: 121] [added: 128] | |

| Impairment charges(1) | | | — | | | | [removed: 40] [added: —] | | | | [removed: 28] [added: 40] | | | | [removed: 2] [added: 28] | | | | [removed: —] [added: 2] | |

| Restructuring costs | | | [removed: 68] [added: 75] | | | | [removed: 63] [added: 68] | | | | [removed: 71] [added: 63] | | | | [removed: 30] [added: 71] | | | | [removed: 9] [added: 30] | |

| Merger related costs(2) | | | — | | | | — | | | | [removed: 87] [added: —] | | | | [removed: —] [added: 87] | | | | — | |

| Income from operations | | | [removed: 741] [added: 777] | | | | [removed: 665] [added: 741] | | | | [removed: 576] [added: 665] | | | | [removed: 646] [added: 576] | | | | [removed: 590] [added: 646] | |

| Interest expense, net | | | [removed: 406] [added: 438] | | | | [removed: 339] [added: 406] | | | | [removed: 140] [added: 339] | | | | [removed: 97] [added: 140] | | | | 97 | |

| Loss on extinguishment of debt | | | [removed: 2] [added: 24] | | | | [removed: 19] [added: 2] | | | | [removed: 31] [added: 19] | | | | [removed: 8] [added: 31] | | | | [removed: —] [added: 8] | |

| Other expense (income), net | | | [added: (37 | ) | | |] 5 | | | | 13 | | | | (11 | ) | | | 2 | | [removed: | | (8 | ) |]

| Income before income taxes and equity in earnings (losses) of unconsolidated affiliates | | | [removed: 328] [added: 352] | | | | [removed: 294] [added: 328] | | | | [removed: 416] [added: 294] | | | | [removed: 539] [added: 416] | | | | [removed: 501] [added: 539] | |

| Income tax expense (benefit)(3) | | | [added: 116 | | | |] 59 | | | | (992 | ) | | | 325 | | | | 159 | | [removed: | | 149 | |]

| Income before equity in earnings (losses) of unconsolidated affiliates | | | [removed: 269] [added: 236] | | | | [removed: 1,286] [added: 269] | | | | [removed: 91] [added: 1,286] | | | | [removed: 380] [added: 91] | | | | [removed: 352] [added: 380] | |

| Equity in earnings (losses) of unconsolidated affiliates | | | [added: (9 | ) | | |] 15 | | | | 10 | | | | (4 | ) | | | 8 | | [removed: | | 5 | |]

| Net income | | | [removed: 284] [added: 227] | | | | [removed: 1,296] [added: 284] | | | | [removed: 87] [added: 1,296] | | | | [removed: 388] [added: 87] | | | | [removed: 357] [added: 388] | |

| Net income attributable to non-controlling interests | | | [removed: (25] [added: (36] | ) | | | [removed: (19] [added: (25] | ) | | | [removed: (15] [added: (19] | ) | | | [removed: (1] [added: (15] | ) | | | [removed: —] [added: (1] | [added: )] |

| Net income attributable to IQVIA Holdings Inc. | | $ | [removed: 259] [added: 191] | | | $ | [removed: 1,277] [added: 259] | | | $ | [removed: 72] [added: 1,277] | | | $ | [removed: 387] [added: 72] | | | $ | [removed: 357] [added: 387] | |

| (in millions, except per share data) | | [removed: 2018] [added: 2019] | | | | [removed: 2017(4)] [added: 2018] | | | | [removed: 2016(4)(5)] [added: 2017(4)] | | | | [removed: 2015] [added: 2016(4)(5)] | | | | [removed: 2014] [added: 2015] | | |

| Basic | | $ | [removed: 1.27] [added: 0.98] | | | $ | [removed: 5.86] [added: 1.27] | | | $ | [removed: 0.48] [added: 5.86] | | | $ | [removed: 3.15] [added: 0.48] | | | $ | [removed: 2.78] [added: 3.15] | |

| Diluted | | $ | [removed: 1.24] [added: 0.96] | | | $ | [removed: 5.74] [added: 1.24] | | | $ | [removed: 0.47] [added: 5.74] | | | $ | [removed: 3.08] [added: 0.47] | | | $ | [removed: 2.72] [added: 3.08] | |

| Basic | | | [removed: 203.7] [added: 195.1] | | | | [removed: 217.8] [added: 203.7] | | | | [removed: 149.1] [added: 217.8] | | | | [removed: 123.0] [added: 149.1] | | | | [removed: 128.0] [added: 123.0] | |

| Diluted | | | [removed: 208.2] [added: 199.6] | | | | [removed: 222.6] [added: 208.2] | | | | [removed: 152.0] [added: 222.6] | | | | [removed: 125.6] [added: 152.0] | | | | [removed: 131.1] [added: 125.6] | |

| (in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017(4)] [added: 2018] | | | | [removed: 2016(4)(5)] [added: 2017(4)] | | | | [removed: 2015] [added: 2016(4)(5)] | | | | [removed: 2014] [added: 2015] | | |

| Operating activities | | $ | [removed: 1,254] [added: 1,417] | | | $ | [removed: 970] [added: 1,254] | | | $ | [removed: 860] [added: 970] | | | $ | [removed: 476] [added: 860] | | | $ | [removed: 433] [added: 476] | |

| Investing activities | | | [removed: (810] [added: (1,190] | ) | | | [removed: (1,190] [added: (810] | ) | | | [removed: 1,731] [added: (1,190] | [added: )] | | | [removed: (67] [added: 1,731] | [removed: )] | | | [removed: (173] [added: (67] | ) |

| Financing activities | | | [removed: (452] [added: (276] | ) | | | [removed: (72] [added: (452] | ) | | | [removed: (2,284] [added: (72] | ) | | | [removed: (249] [added: (2,284] | ) | | | [removed: (130] [added: (249] | ) |

| Capital expenditures | | $ | [removed: (459] [added: (582] | ) | | $ | [removed: (369] [added: (459] | ) | | $ | [removed: (164] [added: (369] | ) | | $ | [removed: (78] [added: (164] | ) | | $ | [removed: (83] [added: (78] | ) |

| (in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017(4)] [added: 2018] | | | | [removed: 2016(4)(5)] [added: 2017(4)] | | | | [removed: 2015] [added: 2016(4)(5)] | | | | [removed: 2014] [added: 2015] | | |

| Cash and cash equivalents | | $ | [removed: 891] [added: 837] | | | $ | [removed: 959] [added: 891] | | | $ | [removed: 1,198] [added: 959] | | | $ | [removed: 977] [added: 1,198] | | | $ | [removed: 867] [added: 977] | |

| Investments in debt, equity and other securities | | | [removed: 88] [added: 127] | | | | [removed: 54] [added: 88] | | | | [removed: 53] [added: 54] | | | | [removed: 33] [added: 53] | | | | [removed: 35] [added: 33] | |

| Trade accounts receivable and unbilled services, net | | | [removed: 2,394] [added: 2,582] | | | | [removed: 2,097] [added: 2,394] | | | | [removed: 1,816] [added: 2,097] | | | | [removed: 1,166] [added: 1,816] | | | | [removed: 975] [added: 1,166] | |

| Property and equipment, net | | | [removed: 434] [added: 458] | | | | [removed: 440] [added: 434] | | | | [removed: 406] [added: 440] | | | | [removed: 188] [added: 406] | | | | [removed: 190] [added: 188] | |

| Total assets | | | [removed: 22,549] [added: 23,251] | | | | [removed: 22,857] [added: 22,549] | | | | [removed: 21,312] [added: 22,857] | | | | [removed: 3,926] [added: 21,312] | | | | [removed: 3,296] [added: 3,926] | |

| Total long-term liabilities | | | [removed: 12,061] [added: 13,043] | | | | [removed: 11,457] [added: 12,061] | | | | [removed: 9,609] [added: 11,457] | | | | [removed: 2,668] [added: 9,609] | | | | [removed: 2,528] [added: 2,668] | |

| Total debt(6) | | | [removed: 11,056] [added: 11,705] | | | | [removed: 10,269] [added: 11,056] | | | | [removed: 7,219] [added: 10,269] | | | | [removed: 2,501] [added: 7,219] | | | | [removed: 2,306] [added: 2,501] | |

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.

On October 3, 2016, we completed the Merger.

| Cash dividends declared per common share | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |

| Cash dividend paid to common stockholders | | | — | | | | — | | | | — | | | | — | | | | — | |

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2018.][added: 2019.]

As a result of this assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31, [removed: 2018,] [added: 2019,] 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, [removed: 2018] [added: 2019] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

| Ari Bousbib Chairman, Chief Executive Officer and President (Principal Executive [removed: Officer)] [added: Officer*)*] | | Michael R. McDonnell Executive Vice President and Chief Financial Officer (Principal Financial Officer) |

We have audited the accompanying consolidated balance sheets of IQVIA Holdings Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the related consolidated statements of income, comprehensive (loss) income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] 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 [removed: Company’s] [added: Company's] internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: 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, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018] [added: 2019] 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, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the COSO.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [removed: (“PCAOB”)] [added: (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.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding [removed: 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.]

[removed: IQVIA HOLDINGS INC.] [added: IQVIA HOLDINGS INC.] AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

| | | Year Ended December 31, | | | | | | | | | | | [added: |]

| (in millions, except per share data) | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Revenues | | $ | [removed: 10,412] [added: 11,088] | | | $ | [removed: 9,702] [added: 10,412] | | | $ | [removed: 6,815] [added: 9,702] | |

| Costs of revenue, exclusive of depreciation and amortization | | | [removed: 6,746] [added: 7,300] | | | | [removed: 6,301] [added: 6,746] | | | | [removed: 4,748] [added: 6,301] | |

| Selling, general and administrative expenses | | | [removed: 1,716] [added: 1,734] | | | | [removed: 1,622] [added: 1,716] | | | | [removed: 1,016] [added: 1,622] | |

| Depreciation and amortization | | | [removed: 1,141] [added: 1,202] | | | | [removed: 1,011] [added: 1,141] | | | | [removed: 289] [added: 1,011] | |

| Impairment charges | | | — | | | | [removed: 40] [added: —] | | | | [removed: 28] [added: 40] | |

| Restructuring costs | | | [removed: 68] [added: 75] | | | | [removed: 63] [added: 68] | | | | [removed: 71] [added: 63] | |

| Income from operations | | | [removed: 741] [added: 777] | | | | [removed: 665] [added: 741] | | | | [removed: 576] [added: 665] | |

| Interest income | | | [removed: (8] [added: (9] | ) | | | [removed: (7] [added: (8] | ) | | | [removed: (4] [added: (7] | ) |

| Interest expense | | | [removed: 414] [added: 447] | | | | [removed: 346] [added: 414] | | | | [removed: 144] [added: 346] | |

| Loss on extinguishment of debt | | | [removed: 2] [added: 24] | | | | [removed: 19] [added: 2] | | | | [removed: 31] [added: 19] | |

| Other [removed: expense (income),] [added: (income) expense,] net | | | [removed: 5] [added: (37] | [added: )] | | | [removed: 13] [added: 5] | | | | [removed: (11] [added: 13] | [removed: )] |

| Income before income taxes and equity in earnings [removed: (losses)] of unconsolidated affiliates | | | [removed: 328] [added: 352] | | | | [removed: 294] [added: 328] | | | | [removed: 416] [added: 294] | |

| Income tax expense (benefit) | | | [removed: 59] [added: 116] | | | | [removed: (992] [added: 59] | [removed: )] | | | [removed: 325] [added: (992] | [added: )] |

| Income before equity in earnings (losses) of unconsolidated affiliates | | | [removed: 269] [added: 236] | | | | [removed: 1,286] [added: 269] | | | | [removed: 91] [added: 1,286] | |

| Equity in [removed: earnings] (losses) [added: earnings] of unconsolidated affiliates | | | [removed: 15] [added: (9] | [added: )] | | | [removed: 10] [added: 15] | | | | [removed: (4] [added: 10] | [removed: )] |

| Net income | | | [removed: 284] [added: 227] | | | | [removed: 1,296] [added: 284] | | | | [removed: 87] [added: 1,296] | |

| Net income attributable to non-controlling interests | | | [removed: (25] [added: (36] | ) | | | [removed: (19] [added: (25] | ) | | | [removed: (15] [added: (19] | ) |

| Net income attributable to IQVIA Holdings Inc. | | $ | [removed: 259] [added: 191] | | | $ | [removed: 1,277] [added: 259] | | | $ | [removed: 72] [added: 1,277] | |

| Basic | | $ | [removed: 1.27] [added: 0.98] | | | $ | [removed: 5.86] [added: 1.27] | | | $ | [removed: 0.48] [added: 5.86] | |

| Diluted | | $ | [removed: 1.24] [added: 0.96] | | | $ | [removed: 5.74] [added: 1.24] | | | $ | [removed: 0.47] [added: 5.74] | |

| Basic | | | [removed: 203.7] [added: 195.1] | | | | [removed: 217.8] [added: 203.7] | | | | [removed: 149.1] [added: 217.8] | |

| Diluted | | | [removed: 208.2] [added: 199.6] | | | | [removed: 222.6] [added: 208.2] | | | | [removed: 152.0] [added: 222.6] | |

| (in millions) | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | [added: |]

| Net income | | $ | [removed: 284] [added: 227] | | | $ | [removed: 1,296] [added: 284] | | | $ | [removed: 87] [added: 1,296] | | [added: |]

| Comprehensive (loss) income adjustments: | | | | | | | | | | | | | [added: |]

| Unrealized [removed: gains] (losses) [added: gains] on derivative instruments, net of income tax [removed: (benefit)] expense [added: (benefit)] of [removed: ($5), $1] [added: $4, ($5)] and [removed: $3] [added: $1] | | | [removed: 1] [added: (15] | [added: )] | | | [removed: 4] [added: 1] | | | | [removed: (7] [added: 4] | [removed: )] | [added: |]

| Defined benefit plan adjustments, net of income tax (benefit) expense of [removed: ($4), $3] [added: $5, ($4)] and [removed: $11] [added: $3] | | | [removed: (8] [added: (30] | ) | | | [removed: 5] [added: (8] | [added: )] | | | [removed: 23] [added: 5] | | [added: |]

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.

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.

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, 2019, is $5,788 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.

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.

February 18, 2020

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Operating lease right-of-use assets | | | 496 | | | | — | |

| Operating lease liabilities | | | 396 | | | | — | |

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

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

| Balance, December 31, 2019 | | | 253.0 | | | | (60.7 | ) | | $ | 3 | | | $ | 11,046 | | | $ | 998 | | | $ | (5,733 | ) | | $ | (311 | ) | | $ | 260 | | | $ | 6,263 | |

IQVIA applies human data science – leveraging the analytic rigor and clarity of data science to the ever-expanding scope of human science – to enable companies to reimagine and develop new approaches to clinical development and commercialization, speed innovation, and accelerate improvements in healthcare outcomes.

Powered by the IQVIA CORE, the Company delivers unique and actionable insights at the intersection of large-scale analytics, transformative technology and extensive domain expertise, as well as execution capabilities to 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.

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

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).

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.

Generally, the payment terms are 30 to 90 days based on contracts.

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 recorded 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 determined 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 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.

| --- | --- | --- |

February 19, 2019

February 19, 2019

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Merger related costs | | | — | | | | — | | | | 87 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total current assets | | | 3,874 | | | | 3,554 | |

| Accounts payable | | $ | 437 | | | $ | 322 | |

| Excess income tax benefits from stock-based award activities | | | — | | | | — | | | | (41 | ) |

| Proceeds from corporate owned life insurance policies | | | — | | | | — | | | | 21 | |

| Excess income tax benefits from stock-based award activities | | | — | | | | — | | | | 41 | |

| Balance, December 31, 2015 | | | 119.4 | | | | — | | | $ | 1 | | | $ | 8 | | | $ | (462 | ) | | $ | — | | | $ | (111 | ) | | $ | 228 | | | $ | (336 | ) |

| ASC 606 implementation | | | — | | | | — | | | | — | | | | — | | | | (42 | ) | | | — | | | | 1 | | | | — | | | | (41 | ) |

| Balance, December 31, 2015, Adjusted | | | 119.4 | | | | — | | | | 1 | | | | 8 | | | | (504 | ) | | | — | | | | (110 | ) | | | 228 | | | | (377 | ) |

| Repurchase of common stock before October 3, 2016 | | | (1.5 | ) | | | — | | | | — | | | | (46 | ) | | | (52 | ) | | | — | | | | — | | | | — | | | | (98 | ) |

| Repurchase of common stock on or after October 3, 2016 | | | — | | | | (12.9 | ) | | | — | | | | — | | | | — | | | | (1,000 | ) | | | — | | | | — | | | | (1,000 | ) |

| Income tax benefits from stock-based award activities | | | — | | | | — | | | | — | | | | 41 | | | | — | | | | — | | | | — | | | | — | | | | 41 | |

On October 3, 2016, Quintiles Transnational Holdings Inc. (“Quintiles”) completed its previously announced merger of equals transaction (the “Merger”) with IMS Health Holdings, Inc. (“IMS Health”).

Pursuant to the terms of the merger agreement dated as of May 3, 2016 between Quintiles and IMS Health (the “Merger Agreement”), IMS Health was merged with and into Quintiles, and the separate corporate existence of IMS Health ceased, with Quintiles continuing as the surviving corporation (the “Surviving Corporation”).

Immediately prior to the completion of the Merger, Quintiles reincorporated as a Delaware corporation.

The Surviving Corporation changed its name to Quintiles IMS Holdings, Inc (“QuintilesIMS”).

At the effective time of the Merger, each issued and outstanding share of IMS Health common stock, par value $0.01 per share (“IMS Health common stock”), was automatically converted into 0.3840 of a share of the Company’s common stock, par value $0.01 per share.

In addition, immediately following the effective time of the Merger, Quintiles Transnational Corp (“Quintiles Corp.”), a direct subsidiary of Quintiles, was merged with and into IMS Health Incorporated, following which IMS Health Incorporated will continue as a direct, wholly-owned subsidiary of the Surviving Corporation.

See Note 14 for additional information regarding the Merger.

On November 6, 2017, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) to effect a change of the Company’s name from “Quintiles IMS Holdings, Inc.” to “IQVIA Holdings Inc.”.

On November 15, 2017, shares of the Company commenced trading under an updated New York Stock Exchange ticker symbol, “IQV” (formerly the shares traded under the ticker symbol “Q”).

The Company renamed two of its reportable segments during the second quarter of 2018.

The reportable segment formerly known as Commercial Solutions is now named Technology & Analytics Solutions and the reportable segment formerly known as Integrated Engagement Services is now named Contract Sales & Medical Solutions.

This is a name change only and there are no changes to the composition of either segment.

Other expense (income), net, includes foreign currency net losses for 2018, 2017 and 2016 of approximately $8 million, $40 million and $6 million, respectively.

The higher foreign currency losses in 2017 were primarily the result of the combination of changes in intercompany loan balances from corporate legal entity integration and a weaker U.S. dollar.

Investments in marketable securities are classified as either trading or available-for-sale and measured at fair market value.

Realized and unrealized gains and losses on available-for-sale and trading securities are included in other expense (income), net, on the accompanying consolidated statements of income.

Accrued Loyalty

The Company owns businesses that manage co-pay reimbursements on behalf of its pharmaceutical customers.

These customers prefund the reimbursements and the Company includes this cash on its balance sheet.

The Company draws on this cash to pay pharmacies as consumers use these programs.

Accrued loyalty was $186 million and $143 million as of December 31, 2018 and 2017, respectively, and included within accrued expenses on the consolidated balance sheet.

The Company’s allowance for doubtful accounts is determined based on a variety of factors that affect the potential collectability of the related receivables, including length of time the receivables are past due, client credit ratings, financial stability of the client, specific one-time events and client payment history.

In addition, in circumstances where the Company is made aware of a specific client’s inability to meet its financial obligations, a specific allowance is established.

There were no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2018] [added: 2019] that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.

None.

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 [removed: 2019] [added: 2020] Annual Meeting of Stockholders (the [removed: “2019] [added: “2020] Proxy Statement”) entitled “Proposal No. 1: Election of [removed: Directors,” “Security Ownership of Certain Beneficial Owners and Management—Section 16(a) Beneficial Ownership Reporting Compliance,” “The Company’s] [added: Directors”, “IQVIA’s] Corporate Governance—Documents Establishing our Corporate Governance” and [removed: “The Company’s] [added: “IQVIA’s] Corporate Governance—Committees of the Board.”

| Ari Bousbib | [removed: 57] [added: 58] | Chairman, Chief Executive Officer, and President |

| Michael R. McDonnell | [removed: 55] [added: 56] | Executive Vice President and Chief Financial Officer |

| W. Richard Staub, III | [removed: 56] [added: 57] | President, Research & Development Solutions |

| Kevin C. Knightly | [removed: 58] [added: 59] | President, Information & Technology Solutions |

| Eric Sherbet | [removed: 54] [added: 55] | Executive Vice [removed: President and] [added: President,] General Counsel [added: and Secretary] |

He previously served as Executive Vice [removed: President,] [added: President and] Chief Financial Officer [removed: and Treasurer] of MCG Capital Corporation, a publicly-held commercial finance company, from September 2004 through October 2008 and as its Chief Operating Officer from August 2006 to October 2008.