Schedule I—Condensed Financial Information
of Registrant
QUINTILES IMS HOLDINGS, INC. (PARENT COMPANY
ONLY)
CONDENSED STATEMENTS OF INCOME
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Year Ended
December 31, |
(in millions)
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2016 |
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2015 |
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2014 |
Selling, general and administrative expenses
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$ |
— |
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$ |
1 |
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$ |
2 |
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Merger related costs
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21 |
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— |
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— |
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Loss from operations
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(21 |
) |
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(1 |
) |
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(2 |
) |
Interest income
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— |
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— |
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— |
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Other expense, net
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— |
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— |
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— |
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Loss before income taxes and equity in earnings of subsidiary
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(21 |
) |
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(1 |
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(2 |
) |
Income tax benefit
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(4 |
) |
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(1 |
) |
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(1 |
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Loss before equity in earnings of subsidiary
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(17 |
) |
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— |
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(1 |
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Equity in earnings of subsidiary
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132 |
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387 |
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357 |
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Net income
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$ |
115 |
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$ |
387 |
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$ |
356 |
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QUINTILES IMS HOLDINGS, INC. (PARENT COMPANY
ONLY)
CONDENSED STATEMENTS OF COMPREHENSIVE
INCOME
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Year Ended
December 31, |
(in millions)
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2016 |
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2015 |
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2014 |
Net income
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$ |
115 |
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$ |
387 |
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$ |
356 |
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Comprehensive income adjustments:
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Unrealized (losses) gains on available-for-sale securities, net of
income taxes
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— |
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— |
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(1 |
) |
Unrealized (losses) gains on derivative instruments, net of income
taxes of $3, ($4) and ($2)
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(7 |
) |
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(9 |
) |
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(5 |
) |
Defined benefit plan adjustments, net of income taxes of $11,
$— and ($3)
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23 |
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— |
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(7 |
) |
Foreign currency translation, net of income taxes of $(9), ($5) and
($2)
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(497 |
) |
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(56 |
) |
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(48 |
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Reclassification adjustments:
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Gains on marketable securities included in net income, net of
income taxes of $—, $— and ($2)
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— |
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— |
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(3 |
) |
Losses on derivative instruments included in net income, net of
income taxes of $7, $6 and $4
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21 |
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12 |
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5 |
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Amortization of actuarial losses and prior service costs included
in net income, net of income taxes
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1 |
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1 |
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— |
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Comprehensive (loss) income
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$ |
(344 |
) |
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$ |
335 |
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$ |
297 |
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QUINTILES IMS HOLDINGS, INC. (PARENT COMPANY
ONLY)
CONDENSED BALANCE SHEETS
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December 31, |
(in millions, except per share data)
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2016 |
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2015 |
ASSETS |
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Current assets:
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Cash and cash equivalents
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$ |
12 |
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$ |
5 |
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Income taxes receivable
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4 |
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— |
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Other current assets and receivables
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— |
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— |
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Total current assets
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16 |
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5 |
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Investment in subsidiary
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8,631 |
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— |
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Total assets
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$ |
8,647 |
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$ |
5 |
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LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities:
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Accounts payable
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$ |
— |
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$ |
— |
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Total current liabilities
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— |
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— |
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Investment in subsidiary
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— |
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569 |
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Payable to subsidiary
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14 |
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— |
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Total liabilities
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14 |
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569 |
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Commitments and contingencies
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Stockholders’ equity (deficit):
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Common stock and additional paid-in capital, 400.0 and 300.0 shares
authorized at December 31, 2016 and 2015, respectively, $0.01
par value, 248.3 and 119.4 shares issued and outstanding at
December 31, 2016 and 2015, respectively
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10,602 |
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9 |
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Accumulated deficit
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(399 |
) |
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(462 |
) |
Treasury stock, at cost, 12.9 shares at December 31, 2016
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(1,000 |
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— |
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Accumulated other comprehensive loss
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(570 |
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(111 |
) |
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Total stockholders’ equity (deficit)
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8,633 |
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(564 |
) |
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Total liabilities and stockholders’ equity
(deficit)
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$ |
8,647 |
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$ |
5 |
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QUINTILES IMS HOLDINGS, INC. (PARENT COMPANY
ONLY)
CONDENSED STATEMENTS OF CASH FLOWS
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Year Ended
December 31, |
(in millions)
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2016 |
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2015 |
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2014 |
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Operating activities:
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Net income
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$ |
115 |
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$ |
387 |
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$ |
356 |
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Adjustments to reconcile net income to cash provided by operating
activities:
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Subsidiary loss (income)
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91 |
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56 |
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(27 |
) |
Change in operating assets and liabilities:
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Accounts receivable and unbilled services
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— |
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— |
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3 |
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Income taxes payable and other liabilities
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(5 |
) |
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— |
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(1 |
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Net cash provided by operating activities
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201 |
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443 |
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331 |
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Investing activities:
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Investment in subsidiary, net of dividends received
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791 |
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— |
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— |
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Net cash provided by investing activities
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791 |
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— |
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— |
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Financing activities:
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Stock issued under employee stock purchase and option plans
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97 |
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64 |
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35 |
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Repurchase of common stock
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(1,097 |
) |
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(515 |
) |
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(415 |
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Repurchase of stock options
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— |
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— |
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(8 |
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Intercompany with subsidiary
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15 |
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1 |
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(3 |
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Net cash (used in) provided by financing activities
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(985 |
) |
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(450 |
) |
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(391 |
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(Decrease) increase in cash and cash equivalents
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7 |
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(7 |
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(60 |
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Cash and cash equivalents at beginning of period
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5 |
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12 |
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72 |
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Cash and cash equivalents at end of period
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$ |
12 |
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$ |
5 |
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$ |
12 |
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QUINTILES IMS HOLDINGS, INC. (PARENT COMPANY
ONLY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
The condensed parent company financial statements have been
prepared in accordance with Rule 12-04, Schedule I of Regulation
S-X as the restricted net assets of Quintiles IMS Holdings,
Inc.’s (the “Company”) wholly-owned subsidiary,
Quintiles IMS Incorporated exceed 25% of the consolidated net
assets of the Company. The ability of Quintiles IMS Incorporated to
pay dividends may be limited due to the restrictive covenants in
the agreements governing its credit arrangements.
These condensed parent company financial statements include the
accounts of Quintiles IMS Holdings, Inc. on a standalone basis (the
“Parent”) and the equity method of accounting is used
to reflect ownership interest in its subsidiary. Refer to the
consolidated financial statements and notes presented elsewhere
herein for additional information and disclosures with respect to
these financial statements.
Since the Parent is part of a group that files a consolidated
income tax return, in accordance with ASC 740, a portion of the
consolidated amount of current and deferred income tax expense of
the Company has been allocated to the Parent. The income tax
benefit of $4 million, $1 million and $1 million in 2016, 2015 and
2014, respectively, represents the income tax benefit that will be
or were already utilized in the Company’s consolidated United
States federal and state income tax returns. If the Parent was not
part of these consolidated income tax returns, it would not be able
to recognize any income tax benefit, as it generates no revenue
against which the losses could be used on a separate filer
basis.
Below is a summary of the dividends paid to the Parent by Quintiles
IMS Incorporated in 2016, 2015 and 2014 (in millions):
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Amount |
Paid in December 2016
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$ |
503 |
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Paid in November 2016
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|
422 |
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Paid in June 2016
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|
89 |
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Total paid in 2016
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$ |
1,014 |
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Paid in December 2015
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$ |
1 |
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Paid in November 2015
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|
223 |
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Paid in May 2015
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|
220 |
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Total paid in 2015
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$ |
444 |
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Paid in November 2014
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$ |
234 |
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Paid in May 2014
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|
87 |
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Paid in January 2014
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8 |
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Total paid in 2014
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$ |
329 |
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