Cover
Cover | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Document Type | 6-K |
Entity Registrant Name | ICON plc |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Entity Central Index Key | 0001060955 |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 707,995 | $ 520,309 |
Available for sale investments | 1,729 | 49,628 |
Accounts receivable, net of allowance for credit losses | 510,636 | 527,708 |
Unbilled revenue | 440,379 | 422,769 |
Other receivables | 32,583 | 39,290 |
Prepayments and other current assets | 42,950 | 41,517 |
Income taxes receivable | 34,784 | 23,759 |
Total current assets | 1,771,056 | 1,624,980 |
Other Assets: | ||
Property, plant and equipment, net | 160,075 | 165,087 |
Goodwill | 914,413 | 883,170 |
Operating right-of-use assets | 85,653 | 104,977 |
Other non-current assets | 17,920 | 17,439 |
Non-current income taxes receivable | 14,825 | 17,230 |
Non-current deferred tax asset | 14,181 | 16,682 |
Equity method investments | 4,817 | 0 |
Investments in equity-long term | 12,990 | 10,053 |
Intangible assets | 69,368 | 67,894 |
Total Assets | 3,065,298 | 2,907,512 |
Current Liabilities: | ||
Accounts payable | 28,702 | 24,050 |
Unearned revenue | 450,906 | 366,988 |
Other liabilities | 402,018 | 378,543 |
Income taxes payable | 11,506 | 12,031 |
Current bank credit lines and loan facilities | 349,923 | 349,640 |
Total current liabilities | 1,243,055 | 1,131,252 |
Other Liabilities: | ||
Non-current operating lease liabilities | 62,494 | 76,593 |
Non-current other liabilities | 21,149 | 17,512 |
Non-current government grants | 812 | 813 |
Non-current income taxes payable | 13,849 | 14,301 |
Non-current deferred tax liability | 12,823 | 9,476 |
Commitments and contingencies | 0 | 0 |
Total Liabilities | 1,354,182 | 1,249,947 |
Shareholders' Equity: | ||
Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized, 52,508,751 shares issued and outstanding at March 31, 2020 and 53,622,206 shares issued and outstanding at December 31, 2019 | 4,579 | 4,635 |
Additional paid-in capital | 610,240 | 577,961 |
Other undenominated capital | 1,134 | 1,052 |
Accumulated other comprehensive income | (66,498) | (75,819) |
Retained earnings | 1,161,661 | 1,110,226 |
Total Shareholders' Equity | 1,711,116 | 1,618,055 |
Redeemable noncontrolling interest | 0 | 39,510 |
Total Shareholders' Equity and Redeemable Noncontrolling Interest | 1,711,116 | 1,657,565 |
Total Liabilities and Shareholders' Equity and Redeemable Noncontrolling Interest | $ 3,065,298 | $ 2,907,512 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - € / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in EUR cents per share) | € 6 | € 6 |
Ordinary shares, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued (in shares) | 52,775,243 | 53,622,206 |
Ordinary shares, shares outstanding (in shares) | 52,775,243 | 53,622,206 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 701,729 | $ 710,441 | $ 2,037,059 | $ 2,080,430 |
Costs and expenses: | ||||
Direct costs | 493,410 | 499,791 | 1,444,536 | 1,465,944 |
Selling, general and administrative expense | 83,117 | 85,449 | 253,812 | 250,564 |
Depreciation and amortization | 16,801 | 15,157 | 48,981 | 45,842 |
Restructuring | 0 | 0 | 18,089 | 0 |
Total costs and expenses | 593,328 | 600,397 | 1,765,418 | 1,762,350 |
Income from operations | 108,401 | 110,044 | 271,641 | 318,080 |
Interest income | 268 | 1,852 | 2,518 | 5,377 |
Interest expense | (3,239) | (3,393) | (9,640) | (9,946) |
Income before provision for income taxes | 105,430 | 108,503 | 264,519 | 313,511 |
Provision for income taxes | (13,706) | (13,020) | (32,706) | (37,516) |
Income before share of earnings from equity method investments | 91,724 | 95,483 | 231,813 | 275,995 |
Share of equity method investments | (83) | 0 | (83) | 0 |
Net income | 91,641 | 95,483 | 231,730 | 275,995 |
Net income attributable to noncontrolling interest | 0 | (658) | (633) | (1,016) |
Net income attributable to the Group | $ 91,641 | $ 94,825 | $ 231,097 | $ 274,979 |
Net income per Ordinary Share attributable to the Group (note 11): | ||||
Basic (USD per share) | $ 1.74 | $ 1.73 | $ 4.28 | $ 5.08 |
Diluted (USD per share) | $ 1.72 | $ 1.72 | $ 4.25 | $ 5.03 |
Weighted average number of Ordinary Shares outstanding: | ||||
Basic (in shares) | 52,737,299 | 54,004,963 | 52,885,252 | 53,935,939 |
Diluted (in shares) | 53,194,327 | 54,550,672 | 53,283,680 | 54,386,066 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 231,730 | $ 275,995 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Loss on disposal of property, plant and equipment | 123 | 217 |
Depreciation expense | 34,553 | 34,271 |
Impairment of right-of-use assets | 5,411 | 0 |
Reduction in carrying value of operating right-of-use assets | 21,367 | 22,867 |
Amortization of intangibles | 14,428 | 11,571 |
Amortization of government grants | (33) | (33) |
Interest on short term investments | 0 | (823) |
Interest on non-current operating lease liability | 1,126 | 2,020 |
Realized gain on sale of short term investments | (232) | 0 |
Gain on re-measurement of financial assets | (200) | (500) |
Loss on settlement of derivative | (905) | 0 |
Loss on equity method investments | 83 | 0 |
Stock compensation expense | 20,157 | 21,065 |
Amortization of interest rate hedge | (725) | (692) |
Amortization of financing costs | 368 | 393 |
Deferred taxes | 1,416 | 3,179 |
Changes in assets and liabilities: | ||
Decrease in accounts receivable | 24,623 | 16,264 |
Increase in unbilled revenue | (17,635) | (126,375) |
Decrease in other receivables | 5,373 | 1,616 |
Increase in prepayments and other current assets | (1,620) | (5,862) |
Increase in other non-current assets | (474) | (1,999) |
Increase in unearned revenue | 82,386 | 42,119 |
(Decrease)/increase in other current liabilities | (21,640) | 176 |
Decrease in operating lease liabilities | (22,797) | (25,440) |
Increase in other non-current liabilities | 887 | 1,647 |
(Decrease)/increase in income taxes payable | (9,428) | 6,498 |
Increase/(decrease) in accounts payable | 4,271 | (78) |
Net cash provided by operating activities | 372,613 | 278,096 |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (28,026) | (31,929) |
Purchase of subsidiary undertakings | (47,931) | (116,431) |
Purchase of equity method investments | (2,450) | 0 |
Cash acquired with subsidiary undertaking | 10,170 | 11,700 |
Purchase of available for sale investments | 0 | (16,075) |
Sale of available for sale investments | 47,902 | 23,814 |
Purchase of investments in equity - long term | (2,737) | (3,476) |
Net cash used in investing activities | (23,072) | (132,397) |
Cash flows from financing activities: | ||
Proceeds from exercise of equity compensation | 12,349 | 21,054 |
Share issue costs | (10) | (9) |
Repurchase of ordinary shares | (175,000) | (141,573) |
Share repurchase costs | (140) | (103) |
Net cash used in financing activities | (162,801) | (120,631) |
Effect of exchange rate movements on cash | 946 | (3,315) |
Net increase in cash and cash equivalents | 187,686 | 21,753 |
Cash and cash equivalents at beginning of period | 520,309 | 395,851 |
Cash and cash equivalents at end of period | $ 707,995 | $ 417,604 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (UNAUDITED) - 9 months ended Sep. 30, 2020 - USD ($) $ in Thousands | Total | Interest Rate Hedge | Cash Flow Hedge | Ordinary Shares | Additional Paid-in Capital | Other Undenominated Capital | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeInterest Rate Hedge | Accumulated Other Comprehensive IncomeCash Flow Hedge | Retained Earnings | Redeemable Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 53,622,206 | 53,622,206 | |||||||||
Beginning balance at Dec. 31, 2019 | $ 1,618,055 | $ 4,635 | $ 577,961 | $ 1,052 | $ (75,819) | $ 1,110,226 | |||||
Comprehensive income: | |||||||||||
Net income | 231,097 | 231,097 | |||||||||
Currency translation adjustment | 12,176 | 12,176 | |||||||||
Currency impact of long term funding (net of tax) | (1,299) | (1,299) | |||||||||
Transfer to realized capital gain | (232) | (232) | |||||||||
Amortization of interest rate hedge | (725) | (725) | |||||||||
Loss on interest rate hedge/ Fair value of cash flow hedge (net of tax) | $ (905) | $ 306 | $ (905) | $ 306 | |||||||
Total comprehensive income | 240,418 | 9,321 | 231,097 | ||||||||
Exercise of share options (in shares) | 181,144 | ||||||||||
Exercise of share options | 12,335 | $ 12 | 12,323 | ||||||||
Issue of restricted share units (in shares) | 207,111 | ||||||||||
Issue of restricted share units | 14 | $ 14 | |||||||||
Non-cash stock compensation expense | 19,966 | 19,966 | |||||||||
Share issuance costs | (10) | (10) | |||||||||
Share repurchase program (in shares) | (1,235,218) | ||||||||||
Share repurchase program | (175,000) | $ (82) | 82 | (175,000) | |||||||
Share repurchase costs | (140) | (140) | |||||||||
Noncontrolling interest adjustment to redemption amount | $ (4,522) | (4,522) | |||||||||
Ending balance (in shares) at Sep. 30, 2020 | 52,775,243 | 52,775,243 | |||||||||
Ending balance at Sep. 30, 2020 | $ 1,711,116 | $ 4,579 | $ 610,240 | $ 1,134 | $ (66,498) | $ 1,161,661 | |||||
Beginning balance at Dec. 31, 2019 | 39,510 | $ 39,510 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Net income attributable to redeemable noncontrolling interest | 633 | ||||||||||
Total comprehensive income | 633 | ||||||||||
Noncontrolling interest adjustment to redemption amount | 4,522 | ||||||||||
Exercise of call option on noncontrolling interest shares | (44,665) | ||||||||||
Ending balance at Sep. 30, 2020 | $ 0 | $ 0 |
Basis of presentation
Basis of presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation These condensed consolidated financial statements which have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) have not been audited. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the condensed consolidated financial statements. Actual results could differ from those estimates. The condensed consolidated financial statements should be read in conjunction with the accounting policies and notes to the consolidated financial statements included in ICON’s Form 20-F for the year ended December 31, 2019 (see note 2 - Significant accounting policies for impact of adoption of any new accounting standards). Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal period ending December 31, 2020. |
Significant accounting policies
Significant accounting policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Significant accounting policies Equity Method Investments The Company’s investments that are not consolidated are accounted for under the equity method if the Company exercises significant influence that is considered to be greater than minor. These investments are classified as equity method investments on the accompanying Condensed Consolidated Balance Sheet. The Company records its pro rata share of the earnings/losses of these investments in Share of equity method investments in the Condensed Consolidated Statement of Operations. The Company reviews these for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Redeemable noncontrolling interests and equity On May 23, 2019, ICON acquired a majority ownership interest in MeDiNova. Included in the purchase agreement are put and call option arrangements with the noncontrolling interest holders that require (put option) or enable (call option) ICON to purchase the remaining minority ownership at a future date. The option is accounted for as temporary equity, which is presented separately as redeemable noncontrolling interest on the Condensed Consolidated Balance Sheet. This classification reflects the assessment that the instruments are contingently redeemable in accordance with ASC 480-10-S99 ' Distinguishing Liabilities from Equity '. Redeemable noncontrolling interests are accreted to their redemption value over the period from the date of issuance to the first date on which the option is exercisable. The change in the option's redemption value is recorded against retained earnings. In a computation of earnings per share, the accretion of redeemable noncontrolling interests to their redemption value is a reduction of net income attributable to the Group. Basic and diluted net income per ordinary share attributable to the Group includes the adjustment to reflect the accretion of the noncontrolling interest to its redemption value. On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. On exercise of the call option, the noncontrolling interest is extinguished and a liability was recorded for the amount payable to the former noncontrolling interest holders. This liability was settled on July 17, 2020 for $43.9 million. Financial assets - credit losses On January 1, 2020, the Group adopted ASU 2016-13 'Measurement of Credit Losses on Financial Instruments (ASC 326)' , which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The Group adopted ASC 326 using the modified retrospective method for all in scope financial assets. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The impact of transitioning to the new standard at January 1, 2020 was immaterial and no adjustment was recorded to retained earnings for the cumulative effect of adopting ASC 326. On transition to ASC 326, the Group has revised the methodology to calculate the allowance for credit losses. The Group's estimate of expected credit losses considers historical credit loss information that is adjusted, where necessary, for current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The Group's receivables and unbilled services are predominantly due from large and mid-tier pharmaceutical and biotechnology companies that share similar risk characteristics. The Group monitors their portfolio of receivables and unbilled services for any deterioration in current or expected credit quality (for example, expected delinquency level), and adjusts the allowance for credit losses as required. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in the Condensed Consolidated Statement of Operations. Losses are charged against the allowance when management believes the uncollectibility of a previously provisioned amount is confirmed. Leases The new leasing standard ( ASC 842 'Leases' ) was effective and adopted by ICON from January 1, 2019. ASC 842 ' Leases ' supersedes the requirements in ASC 840 'Leases' and requires that lessees recognize rights and obligations from virtually all leases (other than leases that meet the definition of a short-term lease) on their balance sheets as right-of-use assets with corresponding lease liabilities. The ASU also provides additional guidance on how to classify leases and how to determine the lease term for accounting purposes. ICON adopted the new standard under the cumulative effect adjustment approach of $106.5 million wer e recorded on the Condensed Consolidated Balance Sheet as at January 1, 2019. There was no impact of adopting ASC 842 on opening retained earnings at January 1, 2019. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue disaggregated by customer profile is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Top client $ 87,231 $ 80,857 $ 233,930 $ 270,416 Clients 2-5 182,229 176,598 568,573 512,883 Clients 6-10 89,062 91,134 249,807 247,309 Clients 11-25 118,156 134,111 344,463 399,877 Other 225,051 227,741 640,286 649,945 Total $ 701,729 $ 710,441 $ 2,037,059 $ 2,080,430 Accounts receivables and unbilled revenue are as follows: September 30, 2020 December 31, 2019 (in thousands) Contract assets: Billed services (accounts receivable) $ 519,709 $ 535,088 Unbilled services (unbilled revenue) 440,379 422,769 Accounts receivable and unbilled revenue 960,088 957,857 Allowance for credit losses (9,073) — Allowance for doubtful debts — (7,380) Accounts receivable and unbilled revenue, net $ 951,015 $ 950,477 Unbilled services and unearned revenue or payments on account (contract assets and liabilities) were as follows: (in thousands, except percentages) September 30, 2020 December 31, 2019 $ Change % Change Unbilled services (unbilled revenue) $ 440,379 $ 422,769 $ 17,610 4.2 % Unearned revenue (payments on account) (450,906) (366,988) (83,918) 22.9 % Net balance $ (10,527) $ 55,781 $ (66,308) (118.9) % Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. We record assets for amounts related to performance obligations that are satisfied but not yet billed and/or collected. These assets are recorded as unbilled services and therefore contract assets rather than accounts receivables when receipt of the consideration is conditional on something other than the passage of time. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations or billed in advance of the revenue being earned. Unbilled services/revenue balances arise where invoicing or billing is based on the timing of agreed milestones related to service contracts for clinical research. Contractual billing arrangements in respect of certain reimbursable expenses (principally investigators) require billing by the investigator to the Company prior to billing by the Company to the customer. As there is no contractual right to set-off between unbilled services (contract assets) and unearned revenue (contract liabilities), each are separately presented gross on the Condensed Consolidated Balance Sheet. Unbilled services as at September 30, 2020 increased by $17.6 million compared to December 31, 2019. Unearned revenue increased by $83.9 million over the same period resulting in a decrease of $66.3 million in the net balance of unbilled services and unearned revenue or payments on account between December 31, 2019 and September 30, 2020. These fluctuations are primarily due to timing of payments and invoicing related to the Group's clinical trial management contracts. Billings and payments are established by contractual provisions including predetermined payment schedules which may or may not correspond to the timing of the transfer of control of the Company's services under the contract. Unbilled services arise from long-term contracts when a cost-based input method of revenue recognition is applied and revenue recognized exceeds the amount billed to the customer. The credit loss expense and allowance for credit losses recognized on the Group's receivables and unbilled services was de minimis for the nine months ended September 30, 2020 and September 30, 2019. As of September 30, 2020 approximately $6.1 billion of revenue is expected to be recognized in the future in respect of unsatisfied performance obligations. The Company expects to recognize revenue on approximate ly 43% of the |
Accounts receivable, unbilled r
Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities) | Revenue Revenue disaggregated by customer profile is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Top client $ 87,231 $ 80,857 $ 233,930 $ 270,416 Clients 2-5 182,229 176,598 568,573 512,883 Clients 6-10 89,062 91,134 249,807 247,309 Clients 11-25 118,156 134,111 344,463 399,877 Other 225,051 227,741 640,286 649,945 Total $ 701,729 $ 710,441 $ 2,037,059 $ 2,080,430 Accounts receivables and unbilled revenue are as follows: September 30, 2020 December 31, 2019 (in thousands) Contract assets: Billed services (accounts receivable) $ 519,709 $ 535,088 Unbilled services (unbilled revenue) 440,379 422,769 Accounts receivable and unbilled revenue 960,088 957,857 Allowance for credit losses (9,073) — Allowance for doubtful debts — (7,380) Accounts receivable and unbilled revenue, net $ 951,015 $ 950,477 Unbilled services and unearned revenue or payments on account (contract assets and liabilities) were as follows: (in thousands, except percentages) September 30, 2020 December 31, 2019 $ Change % Change Unbilled services (unbilled revenue) $ 440,379 $ 422,769 $ 17,610 4.2 % Unearned revenue (payments on account) (450,906) (366,988) (83,918) 22.9 % Net balance $ (10,527) $ 55,781 $ (66,308) (118.9) % Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. We record assets for amounts related to performance obligations that are satisfied but not yet billed and/or collected. These assets are recorded as unbilled services and therefore contract assets rather than accounts receivables when receipt of the consideration is conditional on something other than the passage of time. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations or billed in advance of the revenue being earned. Unbilled services/revenue balances arise where invoicing or billing is based on the timing of agreed milestones related to service contracts for clinical research. Contractual billing arrangements in respect of certain reimbursable expenses (principally investigators) require billing by the investigator to the Company prior to billing by the Company to the customer. As there is no contractual right to set-off between unbilled services (contract assets) and unearned revenue (contract liabilities), each are separately presented gross on the Condensed Consolidated Balance Sheet. Unbilled services as at September 30, 2020 increased by $17.6 million compared to December 31, 2019. Unearned revenue increased by $83.9 million over the same period resulting in a decrease of $66.3 million in the net balance of unbilled services and unearned revenue or payments on account between December 31, 2019 and September 30, 2020. These fluctuations are primarily due to timing of payments and invoicing related to the Group's clinical trial management contracts. Billings and payments are established by contractual provisions including predetermined payment schedules which may or may not correspond to the timing of the transfer of control of the Company's services under the contract. Unbilled services arise from long-term contracts when a cost-based input method of revenue recognition is applied and revenue recognized exceeds the amount billed to the customer. The credit loss expense and allowance for credit losses recognized on the Group's receivables and unbilled services was de minimis for the nine months ended September 30, 2020 and September 30, 2019. As of September 30, 2020 approximately $6.1 billion of revenue is expected to be recognized in the future in respect of unsatisfied performance obligations. The Company expects to recognize revenue on approximate ly 43% of the |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Nine Months Ended Year Ended September 30, 2020 December 31, 2019 (in thousands) Opening balance $ 883,170 $ 756,260 Current period acquisitions (Note 6) 27,191 126,932 Prior period acquisitions 123 — Foreign exchange movement 3,929 (22) Closing balance $ 914,413 $ 883,170 |
Business combinations
Business combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business combinations | Business combinations Acquisitions – MedPass Group ("MedPass") On January 22, 2020 a subsidiary of the Company, ICON Investments Limited acquired 100% of the equity share capital of the MedPass Group. MedPass is the leading European medical device CRO, regulatory and reimbursement consultancy, that specializes in medical device development and market access. The acquisition of MedPass further enhances ICON’s Medical Device and Diagnostic Research Services, through the addition of new regulatory and clinical capabilities in Europe. The integration of MedPass’s services brings noted expertise in complex class 3 medical devices, interventional cardiology and structural heart devices . The acquisition of MedPass has been accounted for as a business combination in accordance with ASC 805 ' Business Combinations' . The Company has made a provisional assessment of the fair value of assets acquired and liabilities assumed as at that date. The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed: January 22, 2020 (in thousands) Cash & cash equivalents $ 10,170 Property, plant and equipment 45 Operating right of use assets 539 Goodwill * 27,191 Customer relationships ** 11,725 Order backlog ** 2,883 Accounts receivable 3,033 Prepayments and other current assets 158 Accounts payable (368) Unearned revenue (989) Other liabilities (2,202) Current lease liabilities (219) Non-current lease liabilities (320) Non-current deferred tax liability (4,090) Net assets acquired $ 47,556 Cash outflows $ 46,992 Working capital adjustment paid 564 Contingent consideration *** — Total consideration $ 47,556 * Goodwill represents the acquisition of an established workforce that specializes in medical device development and market access. None of the goodwill recognized is expected to be deductible for income tax purposes. ** The Company has made an estimate of separate intangible assets acquired, being customer relationships and order book assets. This assessment will be finalized within 12 months of the date of acquisition. *** The fair value of the contingent consideration was estimated at the date of acquisition. Depending on performance of the company, the total consideration could increase by a maximum of $6.7 million in contingent consideration. At September 30, 2020, the fair value of this contingent consideration payable to MedPass is $Nil. Acquisitions – CRN Holdings LLC (trading as Symphony Clinical Research ("Symphony")) On September 24, 2019 a subsidiary of the Company, ICON Clinical Research LLC, acquired a 100% interest in Symphony. Symphony is a leading provider of at-home trial services and site support services. The acquisition of Symphony further enhances our site & patient services offering. Accounting for the acquisition of Symphony was finalized in the period ended September 30, 2020. The acquisition of Symphony has been accounted for as a business combination in accordance with ASC 805 ' Business Combinations' . The Company has made an assessment of the fair value of assets acquired and liabilities assumed as at that date.The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed: September 24, 2019 (in thousands) Cash & cash equivalents $ 3,292 Property, plant and equipment 564 Operating right of use assets 820 Goodwill * 22,865 Customer relationships ** 8,159 Order backlog ** 2,163 Accounts receivable 4,544 Unbilled revenue 186 Prepayments and other current assets 181 Other receivables 6 Accounts payable (799) Unearned revenue (2,411) Other liabilities (933) Current lease liabilities (289) Non-current lease liabilities (531) Net assets acquired $ 37,817 Cash outflows $ 34,976 Working capital adjustment paid 341 Contingent consideration *** 2,500 Total consideration $ 37,817 * Goodwill represents the acquisition of an established workforce and the capability to provide at-home trial services and site support solutions. The full amount of the goodwill recognized is expected to be deductible for income tax purposes. ** In finalizing the acquisition of Symphony in the twelve month period from acquisition, fair value adjustments were made which resulted in increases in accounts receivable ($0.6 million) and unearned revenue ($1.0 million) and decreases in unbilled revenue ($0.1 million), accounts payable ($0.3 million) and other liabilities ($0.1 million). Customer relationship and order backlog assets were also finalized. *** The fair value of the contingent consideration was estimated at the date of acquisition. In the three month period ended, June 30, 2020, the contingent consideration has been settled at fair value in the amount of $0.5 million. The change in fair value has been recorded in the selling, general and administrative expense line of the Condensed Consolidated Statement of Operations. Acquisitions – MeDiNova On May 23, 2019 a subsidiary of the Company, ICON Clinical Research (U.K.) Limited acquired a majority shareholding in MeDiNova, a site network with research sites in key markets in Europe and Africa. On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. The acquisition further enhances ICON's patient recruitment capabilities in EMEA and complements ICON's existing site network in the US, PMG Research. Accounting for the acquisition of MeDiNova was finalized in the period ended June 30, 2020. The acquisition of MeDiNova has been accounted for as a business combination in accordance with ASC 805 ' Business Combinations' . The Company made an assessment of the fair value of assets acquired and liabilities assumed as at that date. The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed: May 23, 2019 (in thousands) Cash & cash equivalents $ 7,719 Property, plant and equipment 670 Operating right of use assets 1,558 Goodwill * 81,760 Customer relationships 3,887 Order backlog 171 Patient database 2,542 Accounts receivable 3,488 Unbilled revenue 4,272 Other receivables 819 Prepayments and other current assets 406 Accounts payable (5,484) Unearned revenue (5,796) Other liabilities (6,860) Current lease liabilities (430) Non-current lease liabilities (1,128) Non-current deferred tax liability (1,345) Net assets acquired $ 86,249 Cash outflows $ 54,123 Working capital adjustment received (466) Redeemable noncontrolling interest ** 32,592 Total consideration $ 86,249 *Goodwill represents the acquisition of an established workforce and access to a broad site network in Europe and Africa. None of the goodwill recognized is expected to be deductible for income tax purposes. **The fair value of the redeemable noncontrolling interest on May 23, 2019 was $32.6 million which was estimated by applying an income based approach. The valuation approach used was based on the future earnings of the Company times an appropriate earnings multiple. On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. Effective from this date, the noncontrolling interest was derecognized and a liability was recognized, representing the assessment of the redemption value of the noncontrolling interest. This liability was settled on July 17, 2020 for $43.9 million. Acquisitions – MolecularMD Corp ("MMD") On January 25, 2019 a subsidiary of the Company, ICON Laboratory Services, Inc. acquired 100% of the share capital of MMD. MMD is a molecular diagnostic specialty laboratory that enables the development and commercialization of precision medicines in oncology. Accounting for the acquisition of MMD was finalized at December 31, 2019. The acquisition of MMD has been accounted for as a business combination in accordance with ASC 805 ' Business Combinations' . The Company has made an assessment of the fair value of assets acquired and liabilities assumed as at that date. The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed: January 25, 2019 (in thousands) Cash & cash equivalent $ 686 Property, plant and equipment 1,697 Operating right of use assets 2,866 Goodwill * 22,430 Customer relationships 10,708 Order backlog 2,787 Accounts receivable 3,100 Unbilled revenue 2,421 Other receivables 43 Prepayments and other current assets 908 Deferred tax asset 1,568 Accounts payable (1,280) Unearned revenue (540) Other liabilities (1,232) Current lease liabilities (699) Non-current lease liabilities (2,167) Non-current other liabilities (1,123) Net assets acquired $ 42,173 Cash outflows $ 42,349 Working capital adjustment received (176) Total consideration $ 42,173 *Goodwill represents the acquisition of an established workforce with experience in molecular diagnostic specialty laboratory services and commercialization of precision medicines in oncology. None of the goodwill recognized is expected to be deductible for income tax purposes. |
Equity method investments
Equity method investments | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investments | Equity method investments The Company has invested $4.9 million to obtain a 49% interest in the voting share capital of Oncacare. The Company’s investment in Oncacare is accounted for under the equity method due to the Company's ability to exercise significant influence over Oncacare that is considered to be greater than minor. The Company records its pro rata share of the earnings/losses of this investment in 'Share of equity method investments' in the Condensed Consolidated Statement of Operations. See additional details in note 2 - Significant accounting policies. The majority investor has the right to sell the 51% majority voting share capital exclusively to the Company in an eighteen month period, commencing January 1, 2023 and ICON also has the right to acquire the 51% majority voting share capital from August 1, 2025. Ownership Percentage Carrying Value Carrying Value At date of investment September 30, 2020 September 30, 2020 July 24, 2020 (in thousands) Oncacare Limited 49 % $ 4,817 $ 4,900 The Company has invested $4.9 million in Oncacare, of which, $2.5 million has been paid with the remainder to be paid in the next twelve months. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring Restructuring charges A restructuring charge of $18.1 million was recognized during the nine months ended September 30, 2020 under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalization across the business to improve resource utilization, resulting in a charge of $11.4 million and office consolidation resulting in a charge for onerous lease obligation of $6.7 million, including the recognition of an impairment of right of use assets of $5.4 million (see note 9 - Operating Leases ) and provision for other related costs of $1.3 million. Details of the restructuring charge recognized in the three and nine months ended September 30, 2020 are as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) Restructuring charge $ — $ — $ 18,089 $ — Total $ — $ — $ 18,089 — Details of the movement in the restructuring charge recognized in the three and nine months ended September 30, 2020 are as follows: Workforce reductions Onerous Lease Total (in thousands) Initial restructuring charge recorded $ 11,391 $ 6,698 $ 18,089 Utilization (4,278) (642) (4,920) Foreign exchange movement — 123 123 Provision at September 30, 2020 $ 7,113 $ 6,179 $ 13,292 Prior Period Restructuring charges A restructuring charge of $12.5 million was recognized during the year ended December 31, 2018 under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalization across the business to improve resource utilization, resulting in a charge of $9.7 million and office consolidation resulting in the recognition of an onerous lease obligation of $2.8 million. No additional charge was recorded during the nine months ended September 30, 2020. Workforce reductions Onerous Lease Total (in thousands) Initial restructuring charge recorded $ 9,684 $ 2,806 $ 12,490 Utilization (5,399) (672) (6,071) Provision at December 31, 2018 $ 4,285 $ 2,134 $ 6,419 Utilization (3,554) (1,228) (4,782) Provision at December 31, 2019 $ 731 $ 906 $ 1,637 Utilization (430) (238) (668) Provision at September 30, 2020 $ 301 $ 668 $ 969 At September 30, 2020, $10.2 million is included within other liabilities and $4.1 million within non-current other liabilities. |
Operating leases
Operating leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating leases | Operating leases Lease costs recorded under operating leases for the three and nine months ended September 30, 2020 were as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Operating lease costs $ 7,417 $ 8,713 $ 23,274 $ 26,332 Income from sub-leases (268) (378) (781) (1,445) Net operating lease costs $ 7,149 $ 8,335 $ 22,493 $ 24,887 Of the total cost of $22.5 million incurred in the nine months ended September 30, 2020 (September 30, 2019: $24.9 million), $20.6 million (September 30, 2019: $23.0 million) is recorded within selling, general and administration costs and $1.9 million (September 30, 2019: $1.9 million) is recorded within direct costs. During the three and nine months ended September 30, 2020 and September 30, 2019, costs incurred by the Group related to variable lease payments was de minimis. Right-of-use assets obtained during the three and nine months ended September 30, 2020 net of early termination options, now reasonably certain to be exercised, totaled $5.3 million and $8.2 million, respectively (September 30, 2019: $7.5 million and $25.4 million respectively). In the nine months ended September 30, 2020, office consolidations resulted in the recognition of an onerous lease obligation. The right-of-use assets related to these offices have been impaired to the extent they are considered onerous and a loss $5.4 million was recorded (see note 8 - Restructuring ). No impairment losses were recognized in the three and nine months ended September 30, 2020. The weighted average remaining lease term and weighted-average discount rate at September 30, 2020 were 4.57 years and 2.58%, respectively. Future minimum lease payments under non-cancelable leases as of September 30, 2020 were as follows: Minimum rental payments (in thousands) September 30, 2020 Due within 1 year $ 26,237 Due between 1 and 5 years 54,736 Thereafter 11,491 Total future minimum lease payments 92,464 Lease imputed interest (5,665) Total $ 86,799 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Income taxes recognized during the three and nine months ended September 30, 2020 and September 30, 2019, comprise: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Provision for income taxes $ 13,706 $ 13,020 $ 34,967 $ 37,516 Tax impact of restructuring and other items — — (2,261) — Provision for income taxes $ 13,706 $ 13,020 $ 32,706 $ 37,516 As at September 30, 2020 the Company maintains a $20.0 million liability (December 31, 2019: $21.3 million) for unrecognized tax benefit, which is comprised of $19.6 million (December 31, 2019: $20.2 million) related to items generating unrecognized tax benefits and $0.4 million (December 31, 2019: $1.1 million) for interest and related penalties to such items. The Company recognizes interest accrued on unrecognized tax benefits as an add itional income tax expense. The Company has analyzed the filing positions in all of the significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. The only periods subject to examination by the major tax jurisdictions where the Company does business are 2015 through 2019 tax years. The Company does not believe that the outcome of any examination will have a material impact on its financial statements. |
Net income per ordinary share
Net income per ordinary share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net income per ordinary share | Net income per ordinary share Basic net income per ordinary share attributable to the Group has been computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share is computed by adjusting the weighted average number of ordinary shares outstanding during the period for all potentially dilutive ordinary shares outstanding during the period and adjusting net income for any changes in income or loss that would result from the conversion of such potential ordinary shares. There is no difference in net income used for basic and diluted net income per ordinary share. Basic and diluted net income per ordinary share attributable to the Group includes the adjustment to reflect the accretion of the noncontrolling interest in MeDiNova to its redemption value. The reconciliation of the number of shares used in the computation of basic and diluted net income per ordinary share is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Weighted average number of ordinary shares outstanding for basic net income per ordinary share 52,737,299 54,004,963 52,885,252 53,935,939 Effect of dilutive share options outstanding 457,028 545,709 398,428 450,127 Weighted average number of ordinary shares outstanding for diluted net income per ordinary share 53,194,327 54,550,672 53,283,680 54,386,066 The reconciliation of net income attributable to the Group and net income attributable to the Group (including NCI redemption amount) as used to calculate net income per ordinary share attributable to the Group is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Net income attributable to the Group $ 91,641 $ 94,825 $ 231,097 $ 274,979 Noncontrolling interest adjustment to redemption amount — (1,243) (4,522) (1,243) Net income attributable to the Group (including NCI redemption adjustment) $ 91,641 $ 93,582 $ 226,575 $ 273,736 Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Net income per Ordinary Share attributable to the Group (including NCI redemption adjustment): Basic $ 1.74 $ 1.73 $ 4.28 $ 5.08 Diluted $ 1.72 $ 1.72 $ 4.25 $ 5.03 |
Share-based awards
Share-based awards | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based awards | Share-based awards Share Options On July 21, 2008, the Company adopted the Employee Share Option Plan 2008 (the “2008 Employee Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any employee, or any Director holding a salaried office or employment with the Company or a Subsidiary for the purchase of ordinary shares. On the same date, the Company also adopted the Consultants Share Option Plan 2008 (the “2008 Consultants Plan”), pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any consultant, adviser or non-executive Director retained by the Company or any Subsidiary for the purchase of ordinary shares. On February 14, 2017, both the 2008 Employee Plan and the 2008 Consultants Plan (together the “2008 Option Plans”) were amended and restated in order to increase the number of options that can be issued under the 2008 Consultants Plan from 0.4 million to 1.0 million and to extend the date for options to be granted under the 2008 Option Plans. An aggregate of 6.0 million ordinary shares have been reserved under the 2008 Employee Plan, as reduced by any shares issued or to be issued pursuant to options granted under the 2008 Consultants Plan, under which a limit of 1.0 million shares applies. Further, the maximum number of ordinary shares with respect to which options may be granted under the 2008 Employee Option Plan, during any calendar year to any employee shall be 0.4 million ordinary shares. There is no individual limit under the 2008 Consultants Plan. No options may be granted under the 2008 Option Plans after February 14, 2027. Each option granted under the 2008 Option Plans will be an employee stock option, or NSO, as described in Section 422 or 423 of the Internal Revenue Code. Each grant of an option under the 2008 Options Plans will be evidenced by a Stock Option Agreement between the optionee and the Company. The exercise price will be specified in each Stock Option Agreement, however option prices will not be less than 100% of the fair market value of an ordinary share on the date the option is granted. On January 17, 2003, the Company adopted the Share Option Plan 2003 (the “2003 Share Option Plan”) pursuant to which the Compensation and Organization Committee of the Board could grant options to officers and other employees of the Company or its subsidiaries for the purchase of ordinary shares. An aggregate of 6.0 million ordinary shares were reserved under the 2003 Share Option Plan; and, in no event could the number of ordinary shares issued pursuant to options awarded under this plan exceed 10% of the outstanding shares, as defined in the 2003 Share Option Plan, at the time of the grant, unless the Board expressly determined otherwise. Further, the maximum number of ordinary shares with respect to which options could be granted under the 2003 Share Option Plan during any calendar year to any employee was 0.4 million ordinary shares. The 2003 Share Option Plan expired on January 17, 2013. No new options may be granted under this plan. Share option awards are granted with an exercise price equal to the market price of the Company’s shares at date of grant. Prior to 2018, share options typically vest over a period of five years from date of grant and expire eight years from date of grant. Share options granted to non-executive directors during 2018 vest over 12 months and expire eight years from the date of grant. The maximum contractual term of options outstanding at September 30, 2020 is eight years. The following table summarizes option activity for the nine months ended September 30, 2020: Options Weighted Weighted Weighted Outstanding at December 31, 2019 656,107 $ 87.80 $ 26.60 4.76 Granted 107,737 $ 159.83 $ 42.43 Exercised (181,144) $ 68.10 $ 20.95 Canceled/expired (11,644) $ 84.27 $ 25.56 Outstanding at September 30, 2020 571,056 $ 107.71 $ 31.40 5.06 Exercisable at September 30, 2020 237,118 $ 82.42 $ 24.65 3.79 The Company has outstanding options with fair values ranging from $11.58 to $46.72 per option or a weighted average fair value of $22.73 per option. The Company issues ordinary shares for all options exercised. The total amount of fully vested share options which remained outstanding at September 30, 2020 was 237,118. Fully vested share options at September 30, 2020 have an average remaining contractual term of 3.79 years, an average exercise price of $82.42 and a total intrinsic value of $25.8 million. The total intrinsic value of options exercised during the nine months ended September 30, 2020 was $19.7 million (September 30, 2019: $24.9 million). The following table summarizes the movement in non-vested share options for the nine months ended September 30, 2020: Options Weighted Average Weighted Average Non-vested outstanding at December 31, 2019 358,030 $ 103.68 $ 31.28 Granted 107,737 $ 159.83 $ 42.43 Vested (124,605) $ 92.25 $ 27.51 Forfeited (7,224) $ 122.18 $ 35.25 Non-vested outstanding at September 30, 2020 333,938 $ 125.66 $ 36.20 Fair value of Stock Options Assumptions The weighted average fair value of options granted during the nine months ended September 30, 2020 and September 30, 2019 was calculated using the Black-Scholes option pricing model. The weighted average grant date fair values and assumptions used were as follows: Nine Months Ended September 30, 2020 September 30, 2019 Weighted average grant date fair value $ 42.43 $ 43.43 Assumptions: Expected volatility 30 % 30 % Dividend yield — % — % Risk-free interest rate 0.57 % 2.55 % Expected life 5 years 5 years Expected volatility is based on the historical volatility of our common stock over a period equal to the expected term of the options; the expected life represents the weighted average period of time that options granted are expected to be outstanding given consideration to vesting schedules and our historical experience of past vesting and termination patterns. The risk-free rate is based on the U.S. government zero-coupon bonds yield curve in effect at time of the grant for periods corresponding with the expected life of the option. Restricted Share Units and Performance Share Units On April 23, 2013, the Company adopted the 2013 Employees Restricted Share Unit and Performance Share Unit Plan (the “2013 RSU Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any employee, or any Director holding a salaried office or employment with the Company, or a Subsidiary to receive an award under the plan. On May 11, 2015, the 2013 RSU Plan was amended and restated in order to increase the number of shares that can be issued under the RSU Plan by 2.5 million shares. Accordingly, an aggregate of 4.1 million ordinary shares have been reserved for issuance under the 2013 RSU Plan. The shares are awarded at par value and vest over a service period. Awards under the 2013 RSU Plan may be settled in cash or shares at the option of the Company. On April 30 2019, the Company approved the 2019 Consultants and Directors Restricted Share Unit Plan (the “2019 Consultants RSU Plan”), which was effective as of May 16, 2019, pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any consultant, adviser or non-executive Director retained by the Company, or a Subsidiary to receive an award under the plan. 250,000 ordinary shares have been reserved for issuance under the 2019 Consultants RSU Plan. The awards are at par value and vest over a service period. Awards granted to non-executive directors during 2019 and 2020 vest over twelve months. The Company has awarded RSUs and PSUs to certain key individuals of the Group. The following table summarizes RSU and PSU activity for the nine months ended September 30, 2020: PSU RSU Outstanding at December 31, 2019 175,989 $ 110.79 1.04 389,900 $ 119.07 1.43 Granted 57,184 $ 165.30 126,998 $ 165.43 Shares vested (63,516) $ 83.92 (144,170) $ 98.34 Forfeited (3,702) $ 136.16 (30,112) $ 131.38 Outstanding at September 30, 2020 165,955 $ 137.56 1.39 342,616 $ 143.87 1.61 The fair value of PSUs vested for the nine months ended September 30, 2020 totaled $5.3 million (full year 2019: $16.5 million). The fair value of RSUs vested for the nine months ended September 30, 2020 totaled $14.2 million (full year 2019: $8.5 million). The PSUs vest based on service and specified EPS targets over the periods 2018 – 2020, 2019 – 2021 and 2020 – 2022. Depending on the amount of EPS from 2018 to 2022, up to an additional 77,027 PSUs may also be granted. Non-cash stock compensation expense Non-cash stock compensation expense for the three and nine months ended September 30, 2020 and September 30, 2019 has been allocated as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Direct costs $ 2,284 $ 4,535 $ 6,472 $ 11,607 Selling, general and administrative 4,687 3,696 13,685 9,458 $ 6,971 $ 8,231 $ 20,157 $ 21,065 Total non-cash stock compensation expense not yet recognized at September 30, 2020 amounted to $52.7 million. The weighted average period over which this is expected to be recognized is 2.25 years. |
Share capital
Share capital | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Share capital | Share capital The Company can acquire up to 10% of its outstanding ordinary shares (by way of redemption), in accordance with Irish law, the United States securities laws, and the Company’s constitutional documents through open market share acquisitions. On January 8, 2019, the Company commenced a share buyback program of up to 1.0 million ordinary shares which was completed during the year ended December 31, 2019 for total consideration of $141.6 million. On October 22 2019, the Company commenced a further share buyback program. At December 31, 2019 35,100 ordinary shares were redeemed for a total consideration of $5.3 million. During the nine months ended September 30, 2020 1,235,218 ordinary shares were redeemed by the Company under this buyback program for a total consideration of $175.0 million. The buyback program gives a broker authority to acquire the Company’s ordinary shares from time to time on the open market in accordance with agreed terms and limitations. All ordinary shares that were redeemed under the buyback program were canceled in accordance with the Constitution of the Company and the nominal value of these shares transferred to an other undenominated capital reserve as required under Irish Company Law. |
Business segment information
Business segment information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business segment information | Business segment information The Company determines and presents operating segments based on the information that is internally provided to the chief operating decision maker, the (‘CODM’) in accordance with ASC 280 'Segment Reporting' . The Company determined that the CODM was comprised of the Chief Executive Officer and the Chief Financial Officer. The Company determines and presents operating segments based on the information that is provided to the CODM. The Company operates as one single business segment, which is the provision of outsourced development services on a global basis to the pharmaceutical, biotechnology and medical devices industries. There have been no changes to the basis of segmentation or the measurement basis for the segment results in the period. The Company is a clinical research organization (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. It specializes in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. The Company has the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and has the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. The Company has expanded predominately through internal growth together with a number of strategic acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process. The Company is generally awarded projects based upon responses to requests for proposals received from companies in the pharmaceutical, biotechnology and medical device industries or work orders executed under our strategic partnership arrangements. Contracts with customers are generally entered into centrally, in most cases with ICON Clinical Research Limited (“ICON Ireland”), the Company’s principal operating subsidiary in Ireland. Revenues, which consist primarily of fees earned under these contracts, are allocated to individual entities within the Group, based on where the work is performed in accordance with the Company’s global transfer pricing model. ICON Ireland acts as the group entrepreneur under the Company’s global transfer pricing model given its role in the development and management of the Group, its ownership of key intellectual property and customer relationships, its key role in the mitigation of risks faced by the Group and its responsibility for maintaining the Company’s global network. ICON Ireland enters into the majority of the Company’s customer contracts. ICON Ireland remunerates other operating entities in the ICON Group on the basis of a guaranteed cost plus mark-up for the services they perform in each of their local territories. The cost plus mark-up for each ICON entity is established to ensure that each of ICON Ireland and the ICON entities that are involved in the conduct of services for customers, earn an appropriate arms-length return having regard to the assets owned, risks borne, and functions performed by each entity from these intercompany transactions. The cost plus mark up policy is reviewed annually to ensure that it is market appropriate. The geographic split of revenue disclosed for each region outside Ireland is the cost plus revenue attributable to these entities. The residual revenues of the Group, once each ICON entity has been paid its respective intercompany service fee, generally fall to be retained by ICON Ireland. As such, revenues and income from operations in Ireland are a function of this global transfer pricing model and comprise revenues of the Group after deducting the cost plus revenues attributable to the activities performed outside Ireland. The Company's areas of operation outside of Ireland include the United States, United Kingdom, Belgium, Bulgaria, France, Germany, Italy, Spain, Poland, Portugal, Czech Republic, Hungary, Israel, Latvia, Romania, Russia, Serbia, Sweden, The Netherlands, Turkey, Ukraine, Canada, Argentina, Brazil, Chile, Colombia, Mexico, Peru, India, China (including Hong Kong), Japan, Singapore, South Korea, The Philippines, Taiwan, Thailand, Australia, New Zealand and South Africa. The geographical distribution of the Company’s segment measures as at September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and September 30, 2019 is as follows: a) The distribution of revenue by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland * $ 250,230 $ 320,459 $ 844,945 $ 929,419 Rest of Europe 100,635 98,080 292,453 282,717 U.S. 285,550 223,900 700,483 664,752 Rest of World 65,314 68,002 199,178 203,542 Total $ 701,729 $ 710,441 $ 2,037,059 $ 2,080,430 * All sales shown for Ireland are export sales. b) The distribution of income from operations including restructuring by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 81,800 $ 82,529 $ 194,390 $ 231,202 Rest of Europe 4,713 10,234 22,529 21,747 U.S. 14,399 11,975 37,667 45,382 Rest of World 7,489 5,306 17,055 19,749 Total $ 108,401 $ 110,044 $ 271,641 $ 318,080 c) The distribution of income from operations excluding restructuring by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 81,800 $ 82,529 $ 212,479 $ 231,202 Rest of Europe 4,713 10,234 22,529 21,747 U.S. 14,399 11,975 37,667 45,382 Rest of World 7,489 5,306 17,055 19,749 Total $ 108,401 $ 110,044 $ 289,730 $ 318,080 d) The distribution of long-lived assets (including right-of-use assets), net, by geographical area was as follows: September 30, 2020 December 31, 2019 (in thousands) Ireland $ 108,861 $ 110,522 Rest of Europe 33,825 41,970 U.S. 62,502 72,578 Rest of World 40,540 44,994 Total $ 245,728 $ 270,064 e) The distribution of depreciation, amortization and reduction in carrying value of the right-of-use assets by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 8,556 $ 6,990 $ 24,748 $ 21,906 Rest of Europe 4,016 3,560 11,503 10,612 U.S. 7,406 6,563 22,246 23,743 Rest of World 3,853 5,865 11,851 12,448 Total $ 23,831 $ 22,978 $ 70,348 $ 68,709 f) The distribution of total assets by geographical area was as follows: September 30, 2020 December 31, 2019 (in thousands) Ireland $ 1,492,836 $ 1,323,181 Rest of Europe 645,165 660,797 U.S. 759,692 755,271 Rest of World 167,605 168,263 Total $ 3,065,298 $ 2,907,512 |
Impact of change in accounting
Impact of change in accounting policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of change in accounting policies | Impact of change in accounting policies ASC 326 Financial Instruments - Credit Losses ASU 2016-13 'Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments' (ASU 2016-13) was effective, and adopted by the Group, from January 1, 2020. Primarily, ASU 2016-13 introduces an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The objectives of previous loss methodologies for instruments within the scope of this update generally delayed recognition of the full amount of credit losses until the loss was probable of occurring. Under ASU 2016-13, losses reflect an entity’s current estimate of all expected credit losses including, in addition to the consideration of past events and current conditions, as under the current guidance, incorporating the use of forecast information to provide more timely and accurate credit loss estimates. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASC 842 on leases. In addition, ASC 326 changed the accounting for available-for-sale (AFS) debt securities to require credit losses to be presented as an allowance rather than as a write-down to align the income statement recognition of credit losses on AFS debt securities with the reporting period in which the changes occur. The Group adopted ASC 326 using the modified retrospective method. Under this transition method, the new standard is applied from January 1, 2020 without restatement of comparative period amounts. The adoption of ASC 326 does not have a material impact on the Group and there was no impact of adopting ASC 326 on opening balances at January 1, 2020. |
Significant accounting polici_2
Significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Equity method investments | Equity Method Investments The Company’s investments that are not consolidated are accounted for under the equity method if the Company exercises significant influence that is considered to be greater than minor. These investments are classified as equity method investments on the accompanying Condensed Consolidated Balance Sheet. The Company records its pro rata share of the earnings/losses of these investments in Share of equity method investments in the Condensed Consolidated Statement of Operations. The Company reviews these for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. |
New accounting pronouncements | Financial assets - credit losses On January 1, 2020, the Group adopted ASU 2016-13 'Measurement of Credit Losses on Financial Instruments (ASC 326)' , which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The Group adopted ASC 326 using the modified retrospective method for all in scope financial assets. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The impact of transitioning to the new standard at January 1, 2020 was immaterial and no adjustment was recorded to retained earnings for the cumulative effect of adopting ASC 326. On transition to ASC 326, the Group has revised the methodology to calculate the allowance for credit losses. The Group's estimate of expected credit losses considers historical credit loss information that is adjusted, where necessary, for current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The Group's receivables and unbilled services are predominantly due from large and mid-tier pharmaceutical and biotechnology companies that share similar risk characteristics. The Group monitors their portfolio of receivables and unbilled services for any deterioration in current or expected credit quality (for example, expected delinquency level), and adjusts the allowance for credit losses as required. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense in the Condensed Consolidated Statement of Operations. Losses are charged against the allowance when management believes the uncollectibility of a previously provisioned amount is confirmed. Leases The new leasing standard ( ASC 842 'Leases' ) was effective and adopted by ICON from January 1, 2019. ASC 842 ' Leases ' supersedes the requirements in ASC 840 'Leases' and requires that lessees recognize rights and obligations from virtually all leases (other than leases that meet the definition of a short-term lease) on their balance sheets as right-of-use assets with corresponding lease liabilities. The ASU also provides additional guidance on how to classify leases and how to determine the lease term for accounting purposes. ICON adopted the new standard under the cumulative effect adjustment approach of $106.5 million wer e recorded on the Condensed Consolidated Balance Sheet as at January 1, 2019. There was no impact of adopting ASC 842 on opening retained earnings at January 1, 2019. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue disaggregated by customer profile is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Top client $ 87,231 $ 80,857 $ 233,930 $ 270,416 Clients 2-5 182,229 176,598 568,573 512,883 Clients 6-10 89,062 91,134 249,807 247,309 Clients 11-25 118,156 134,111 344,463 399,877 Other 225,051 227,741 640,286 649,945 Total $ 701,729 $ 710,441 $ 2,037,059 $ 2,080,430 |
Accounts receivable, unbilled_2
Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contracts with Customers, Asset and Liabilities | Accounts receivables and unbilled revenue are as follows: September 30, 2020 December 31, 2019 (in thousands) Contract assets: Billed services (accounts receivable) $ 519,709 $ 535,088 Unbilled services (unbilled revenue) 440,379 422,769 Accounts receivable and unbilled revenue 960,088 957,857 Allowance for credit losses (9,073) — Allowance for doubtful debts — (7,380) Accounts receivable and unbilled revenue, net $ 951,015 $ 950,477 Unbilled services and unearned revenue or payments on account (contract assets and liabilities) were as follows: (in thousands, except percentages) September 30, 2020 December 31, 2019 $ Change % Change Unbilled services (unbilled revenue) $ 440,379 $ 422,769 $ 17,610 4.2 % Unearned revenue (payments on account) (450,906) (366,988) (83,918) 22.9 % Net balance $ (10,527) $ 55,781 $ (66,308) (118.9) % |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Nine Months Ended Year Ended September 30, 2020 December 31, 2019 (in thousands) Opening balance $ 883,170 $ 756,260 Current period acquisitions (Note 6) 27,191 126,932 Prior period acquisitions 123 — Foreign exchange movement 3,929 (22) Closing balance $ 914,413 $ 883,170 |
Business combinations (Tables)
Business combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Summary of Estimates of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s fair values of the assets acquired and liabilities assumed: January 22, 2020 (in thousands) Cash & cash equivalents $ 10,170 Property, plant and equipment 45 Operating right of use assets 539 Goodwill * 27,191 Customer relationships ** 11,725 Order backlog ** 2,883 Accounts receivable 3,033 Prepayments and other current assets 158 Accounts payable (368) Unearned revenue (989) Other liabilities (2,202) Current lease liabilities (219) Non-current lease liabilities (320) Non-current deferred tax liability (4,090) Net assets acquired $ 47,556 Cash outflows $ 46,992 Working capital adjustment paid 564 Contingent consideration *** — Total consideration $ 47,556 * Goodwill represents the acquisition of an established workforce that specializes in medical device development and market access. None of the goodwill recognized is expected to be deductible for income tax purposes. ** The Company has made an estimate of separate intangible assets acquired, being customer relationships and order book assets. This assessment will be finalized within 12 months of the date of acquisition. *** The fair value of the contingent consideration was estimated at the date of acquisition. Depending on performance of the company, the total consideration could increase by a maximum of $6.7 million in contingent consideration. At September 30, 2020, the fair value of this contingent consideration payable to MedPass is $Nil. September 24, 2019 (in thousands) Cash & cash equivalents $ 3,292 Property, plant and equipment 564 Operating right of use assets 820 Goodwill * 22,865 Customer relationships ** 8,159 Order backlog ** 2,163 Accounts receivable 4,544 Unbilled revenue 186 Prepayments and other current assets 181 Other receivables 6 Accounts payable (799) Unearned revenue (2,411) Other liabilities (933) Current lease liabilities (289) Non-current lease liabilities (531) Net assets acquired $ 37,817 Cash outflows $ 34,976 Working capital adjustment paid 341 Contingent consideration *** 2,500 Total consideration $ 37,817 * Goodwill represents the acquisition of an established workforce and the capability to provide at-home trial services and site support solutions. The full amount of the goodwill recognized is expected to be deductible for income tax purposes. ** In finalizing the acquisition of Symphony in the twelve month period from acquisition, fair value adjustments were made which resulted in increases in accounts receivable ($0.6 million) and unearned revenue ($1.0 million) and decreases in unbilled revenue ($0.1 million), accounts payable ($0.3 million) and other liabilities ($0.1 million). Customer relationship and order backlog assets were also finalized. May 23, 2019 (in thousands) Cash & cash equivalents $ 7,719 Property, plant and equipment 670 Operating right of use assets 1,558 Goodwill * 81,760 Customer relationships 3,887 Order backlog 171 Patient database 2,542 Accounts receivable 3,488 Unbilled revenue 4,272 Other receivables 819 Prepayments and other current assets 406 Accounts payable (5,484) Unearned revenue (5,796) Other liabilities (6,860) Current lease liabilities (430) Non-current lease liabilities (1,128) Non-current deferred tax liability (1,345) Net assets acquired $ 86,249 Cash outflows $ 54,123 Working capital adjustment received (466) Redeemable noncontrolling interest ** 32,592 Total consideration $ 86,249 *Goodwill represents the acquisition of an established workforce and access to a broad site network in Europe and Africa. None of the goodwill recognized is expected to be deductible for income tax purposes. **The fair value of the redeemable noncontrolling interest on May 23, 2019 was $32.6 million which was estimated by applying an income based approach. The valuation approach used was based on the future earnings of the Company times an appropriate earnings multiple. On March 9, 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. Effective from this date, the noncontrolling interest was derecognized and a liability was recognized, representing the assessment of the redemption value of the noncontrolling interest. This liability was settled on July 17, 2020 for $43.9 million. January 25, 2019 (in thousands) Cash & cash equivalent $ 686 Property, plant and equipment 1,697 Operating right of use assets 2,866 Goodwill * 22,430 Customer relationships 10,708 Order backlog 2,787 Accounts receivable 3,100 Unbilled revenue 2,421 Other receivables 43 Prepayments and other current assets 908 Deferred tax asset 1,568 Accounts payable (1,280) Unearned revenue (540) Other liabilities (1,232) Current lease liabilities (699) Non-current lease liabilities (2,167) Non-current other liabilities (1,123) Net assets acquired $ 42,173 Cash outflows $ 42,349 Working capital adjustment received (176) Total consideration $ 42,173 *Goodwill represents the acquisition of an established workforce with experience in molecular diagnostic specialty laboratory services and commercialization of precision medicines in oncology. None of the goodwill recognized is expected to be deductible for income tax purposes. |
Equity method investments (Tabl
Equity method investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investments | Ownership Percentage Carrying Value Carrying Value At date of investment September 30, 2020 September 30, 2020 July 24, 2020 (in thousands) Oncacare Limited 49 % $ 4,817 $ 4,900 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charge | Details of the restructuring charge recognized in the three and nine months ended September 30, 2020 are as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) Restructuring charge $ — $ — $ 18,089 $ — Total $ — $ — $ 18,089 — |
Details of movement in restructuring charge | Details of the movement in the restructuring charge recognized in the three and nine months ended September 30, 2020 are as follows: Workforce reductions Onerous Lease Total (in thousands) Initial restructuring charge recorded $ 11,391 $ 6,698 $ 18,089 Utilization (4,278) (642) (4,920) Foreign exchange movement — 123 123 Provision at September 30, 2020 $ 7,113 $ 6,179 $ 13,292 Workforce reductions Onerous Lease Total (in thousands) Initial restructuring charge recorded $ 9,684 $ 2,806 $ 12,490 Utilization (5,399) (672) (6,071) Provision at December 31, 2018 $ 4,285 $ 2,134 $ 6,419 Utilization (3,554) (1,228) (4,782) Provision at December 31, 2019 $ 731 $ 906 $ 1,637 Utilization (430) (238) (668) Provision at September 30, 2020 $ 301 $ 668 $ 969 |
Operating leases (Tables)
Operating leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Costs | Lease costs recorded under operating leases for the three and nine months ended September 30, 2020 were as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Operating lease costs $ 7,417 $ 8,713 $ 23,274 $ 26,332 Income from sub-leases (268) (378) (781) (1,445) Net operating lease costs $ 7,149 $ 8,335 $ 22,493 $ 24,887 |
Schedule of Operating Lease Maturity | Future minimum lease payments under non-cancelable leases as of September 30, 2020 were as follows: Minimum rental payments (in thousands) September 30, 2020 Due within 1 year $ 26,237 Due between 1 and 5 years 54,736 Thereafter 11,491 Total future minimum lease payments 92,464 Lease imputed interest (5,665) Total $ 86,799 |
Income taxes (Tables)
Income taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | Income taxes recognized during the three and nine months ended September 30, 2020 and September 30, 2019, comprise: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Provision for income taxes $ 13,706 $ 13,020 $ 34,967 $ 37,516 Tax impact of restructuring and other items — — (2,261) — Provision for income taxes $ 13,706 $ 13,020 $ 32,706 $ 37,516 |
Net income per ordinary share (
Net income per ordinary share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The reconciliation of the number of shares used in the computation of basic and diluted net income per ordinary share is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Weighted average number of ordinary shares outstanding for basic net income per ordinary share 52,737,299 54,004,963 52,885,252 53,935,939 Effect of dilutive share options outstanding 457,028 545,709 398,428 450,127 Weighted average number of ordinary shares outstanding for diluted net income per ordinary share 53,194,327 54,550,672 53,283,680 54,386,066 The reconciliation of net income attributable to the Group and net income attributable to the Group (including NCI redemption amount) as used to calculate net income per ordinary share attributable to the Group is as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Net income attributable to the Group $ 91,641 $ 94,825 $ 231,097 $ 274,979 Noncontrolling interest adjustment to redemption amount — (1,243) (4,522) (1,243) Net income attributable to the Group (including NCI redemption adjustment) $ 91,641 $ 93,582 $ 226,575 $ 273,736 Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Net income per Ordinary Share attributable to the Group (including NCI redemption adjustment): Basic $ 1.74 $ 1.73 $ 4.28 $ 5.08 Diluted $ 1.72 $ 1.72 $ 4.25 $ 5.03 |
Share-based awards (Tables)
Share-based awards (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share Option Activity | The following table summarizes option activity for the nine months ended September 30, 2020: Options Weighted Weighted Weighted Outstanding at December 31, 2019 656,107 $ 87.80 $ 26.60 4.76 Granted 107,737 $ 159.83 $ 42.43 Exercised (181,144) $ 68.10 $ 20.95 Canceled/expired (11,644) $ 84.27 $ 25.56 Outstanding at September 30, 2020 571,056 $ 107.71 $ 31.40 5.06 Exercisable at September 30, 2020 237,118 $ 82.42 $ 24.65 3.79 |
Schedule of Movement in Non-vested Share Options | The following table summarizes the movement in non-vested share options for the nine months ended September 30, 2020: Options Weighted Average Weighted Average Non-vested outstanding at December 31, 2019 358,030 $ 103.68 $ 31.28 Granted 107,737 $ 159.83 $ 42.43 Vested (124,605) $ 92.25 $ 27.51 Forfeited (7,224) $ 122.18 $ 35.25 Non-vested outstanding at September 30, 2020 333,938 $ 125.66 $ 36.20 |
Schedule of Weighted Average Fair Values and Assumptions Used | The weighted average grant date fair values and assumptions used were as follows: Nine Months Ended September 30, 2020 September 30, 2019 Weighted average grant date fair value $ 42.43 $ 43.43 Assumptions: Expected volatility 30 % 30 % Dividend yield — % — % Risk-free interest rate 0.57 % 2.55 % Expected life 5 years 5 years |
Schedule of RSU and PSU Activity | The following table summarizes RSU and PSU activity for the nine months ended September 30, 2020: PSU RSU Outstanding at December 31, 2019 175,989 $ 110.79 1.04 389,900 $ 119.07 1.43 Granted 57,184 $ 165.30 126,998 $ 165.43 Shares vested (63,516) $ 83.92 (144,170) $ 98.34 Forfeited (3,702) $ 136.16 (30,112) $ 131.38 Outstanding at September 30, 2020 165,955 $ 137.56 1.39 342,616 $ 143.87 1.61 |
Schedule of Non-cash Stock Compensation Expense | Non-cash stock compensation expense for the three and nine months ended September 30, 2020 and September 30, 2019 has been allocated as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Direct costs $ 2,284 $ 4,535 $ 6,472 $ 11,607 Selling, general and administrative 4,687 3,696 13,685 9,458 $ 6,971 $ 8,231 $ 20,157 $ 21,065 |
Business segment information (T
Business segment information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Distribution of Revenue by Geographical Area | The distribution of revenue by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland * $ 250,230 $ 320,459 $ 844,945 $ 929,419 Rest of Europe 100,635 98,080 292,453 282,717 U.S. 285,550 223,900 700,483 664,752 Rest of World 65,314 68,002 199,178 203,542 Total $ 701,729 $ 710,441 $ 2,037,059 $ 2,080,430 |
Distribution of income from operations by geographical area | The distribution of income from operations including restructuring by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 81,800 $ 82,529 $ 194,390 $ 231,202 Rest of Europe 4,713 10,234 22,529 21,747 U.S. 14,399 11,975 37,667 45,382 Rest of World 7,489 5,306 17,055 19,749 Total $ 108,401 $ 110,044 $ 271,641 $ 318,080 Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 81,800 $ 82,529 $ 212,479 $ 231,202 Rest of Europe 4,713 10,234 22,529 21,747 U.S. 14,399 11,975 37,667 45,382 Rest of World 7,489 5,306 17,055 19,749 Total $ 108,401 $ 110,044 $ 289,730 $ 318,080 |
Distribution of Long-lived Assets, Net, by Geographical Area | The distribution of long-lived assets (including right-of-use assets), net, by geographical area was as follows: September 30, 2020 December 31, 2019 (in thousands) Ireland $ 108,861 $ 110,522 Rest of Europe 33,825 41,970 U.S. 62,502 72,578 Rest of World 40,540 44,994 Total $ 245,728 $ 270,064 |
Distribution of Depreciation and Amortization by Geographical Area | The distribution of depreciation, amortization and reduction in carrying value of the right-of-use assets by geographical area was as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (in thousands) (in thousands) Ireland $ 8,556 $ 6,990 $ 24,748 $ 21,906 Rest of Europe 4,016 3,560 11,503 10,612 U.S. 7,406 6,563 22,246 23,743 Rest of World 3,853 5,865 11,851 12,448 Total $ 23,831 $ 22,978 $ 70,348 $ 68,709 |
Distribution of Total Assets by Geographical Area | The distribution of total assets by geographical area was as follows: September 30, 2020 December 31, 2019 (in thousands) Ireland $ 1,492,836 $ 1,323,181 Rest of Europe 645,165 660,797 U.S. 759,692 755,271 Rest of World 167,605 168,263 Total $ 3,065,298 $ 2,907,512 |
Significant accounting polici_3
Significant accounting policies (Details) - USD ($) | Jul. 17, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Mar. 09, 2020 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | ||||
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Extensible List] | us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember | ||||
Operating right-of-use assets | $ 85,653,000 | $ 104,977,000 | |||
Operating lease, liability | 86,799,000 | ||||
Opening retained earnings | 1,711,116,000 | 1,618,055,000 | |||
Retained Earnings | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Opening retained earnings | $ 1,161,661,000 | 1,110,226,000 | |||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating right-of-use assets | $ 106,500,000 | ||||
Operating lease, liability | $ 106,500,000 | ||||
Accounting Standards Update 2016-02 | Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Opening retained earnings | $ 0 | ||||
MeDiNova | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Percentage of interest acquired | 100.00% | ||||
Settlement of liability | $ 43,900,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 701,729 | $ 710,441 | $ 2,037,059 | $ 2,080,430 |
Top client | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 87,231 | 80,857 | 233,930 | 270,416 |
Clients 2-5 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 182,229 | 176,598 | 568,573 | 512,883 |
Clients 6-10 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 89,062 | 91,134 | 249,807 | 247,309 |
Clients 11-25 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 118,156 | 134,111 | 344,463 | 399,877 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 225,051 | $ 227,741 | $ 640,286 | $ 649,945 |
Accounts receivable, unbilled_3
Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities) - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Billed services (accounts receivable) | $ 519,709 | $ 535,088 |
Unbilled services (unbilled revenue) | 440,379 | 422,769 |
Accounts receivable and unbilled revenue | 960,088 | 957,857 |
Allowance for credit losses/doubtful debts | (9,073) | (7,380) |
Accounts receivable and unbilled revenue, net | 951,015 | 950,477 |
Change in unbilled services (unbilled revenue) | $ 17,610 | |
Change in unbilled services (unbilled revenue) (percentage) | 4.20% | |
Unearned revenue (payments on account) | $ (450,906) | (366,988) |
Change in unearned revenue (payments on account) | $ (83,918) | |
Change in unearned revenue (payments on account) (percentage) | 22.90% | |
Net balance | $ (10,527) | $ 55,781 |
Change in net balance | $ (66,308) | |
Change in net balance (percentage) | (118.90%) |
Accounts receivable, unbilled_4
Accounts receivable, unbilled revenue (contract assets) and unearned revenue or payments on account (contract liabilities) - Revenue Remaining Performance Obligations (Details) $ in Billions | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 6.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation (percentage) | 43.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Opening balance | $ 883,170 | $ 756,260 |
Current period acquisitions (Note 6) | 27,191 | 126,932 |
Prior period acquisitions | 123 | 0 |
Foreign exchange movement | 3,929 | (22) |
Closing balance | $ 914,413 | $ 883,170 |
Business combinations (Details)
Business combinations (Details) - USD ($) | Jul. 17, 2020 | Jan. 22, 2020 | Sep. 24, 2019 | May 23, 2019 | Jan. 25, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Mar. 09, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 914,413,000 | $ 883,170,000 | $ 756,260,000 | ||||||||
Cash outflows | 47,931,000 | $ 116,431,000 | |||||||||
Medpass | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage of share capital acquired | 100.00% | ||||||||||
Cash & cash equivalents | $ 10,170,000 | ||||||||||
Property, plant and equipment | 45,000 | ||||||||||
Operating right of use assets | 539,000 | ||||||||||
Goodwill | 27,191,000 | ||||||||||
Accounts receivable | 3,033,000 | ||||||||||
Prepayments and other current assets | 158,000 | ||||||||||
Accounts payable | (368,000) | ||||||||||
Unearned revenue | (989,000) | ||||||||||
Other liabilities | (2,202,000) | ||||||||||
Current lease liabilities | (219,000) | ||||||||||
Non-current lease liabilities | (320,000) | ||||||||||
Non-current deferred tax liability | (4,090,000) | ||||||||||
Net assets acquired | 47,556,000 | ||||||||||
Cash outflows | 46,992,000 | ||||||||||
Working capital adjustment paid | 564,000 | ||||||||||
Contingent consideration | 0 | 0 | |||||||||
Total consideration | 47,556,000 | ||||||||||
Goodwill expected to be tax deductible | 0 | ||||||||||
Contingent consideration, maximum amount | 6,700,000 | ||||||||||
Symphony | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage of share capital acquired | 100.00% | ||||||||||
Cash & cash equivalents | $ 3,292,000 | ||||||||||
Property, plant and equipment | 564,000 | ||||||||||
Operating right of use assets | 820,000 | ||||||||||
Goodwill | 22,865,000 | ||||||||||
Accounts receivable | 4,544,000 | ||||||||||
Unbilled revenue | 186,000 | ||||||||||
Other receivables | 6,000 | ||||||||||
Prepayments and other current assets | 181,000 | ||||||||||
Accounts payable | (799,000) | ||||||||||
Unearned revenue | (2,411,000) | ||||||||||
Other liabilities | (933,000) | ||||||||||
Current lease liabilities | (289,000) | ||||||||||
Non-current lease liabilities | (531,000) | ||||||||||
Net assets acquired | 37,817,000 | ||||||||||
Cash outflows | 34,976,000 | ||||||||||
Working capital adjustment paid | 341,000 | ||||||||||
Contingent consideration | 2,500,000 | $ 500,000 | |||||||||
Total consideration | 37,817,000 | ||||||||||
Business combination fair value increase to accounts receivable | 600,000 | ||||||||||
Business combination fair value increase to unearned revenue | 1,000,000 | ||||||||||
Business combination fair value decrease to unbilled revenue | (100,000) | ||||||||||
Business combination fair value decrease to accounts payable | 300,000 | ||||||||||
Business combination fair value adjustment increase to other liabilities | $ 100,000 | ||||||||||
MeDiNova | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage of interest acquired | 100.00% | ||||||||||
Cash & cash equivalents | $ 7,719,000 | ||||||||||
Property, plant and equipment | 670,000 | ||||||||||
Operating right of use assets | 1,558,000 | ||||||||||
Goodwill | 81,760,000 | ||||||||||
Accounts receivable | 3,488,000 | ||||||||||
Unbilled revenue | 4,272,000 | ||||||||||
Other receivables | 819,000 | ||||||||||
Prepayments and other current assets | 406,000 | ||||||||||
Accounts payable | (5,484,000) | ||||||||||
Unearned revenue | (5,796,000) | ||||||||||
Other liabilities | (6,860,000) | ||||||||||
Current lease liabilities | (430,000) | ||||||||||
Non-current lease liabilities | (1,128,000) | ||||||||||
Non-current deferred tax liability | (1,345,000) | ||||||||||
Net assets acquired | 86,249,000 | ||||||||||
Cash outflows | 54,123,000 | ||||||||||
Working capital adjustment paid | (466,000) | ||||||||||
Redeemable noncontrolling interest | 32,592,000 | ||||||||||
Total consideration | 86,249,000 | ||||||||||
Goodwill expected to be tax deductible | 0 | ||||||||||
Settlement of liability | $ 43,900,000 | ||||||||||
MMD | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage of share capital acquired | 100.00% | ||||||||||
Cash & cash equivalents | $ 686,000 | ||||||||||
Property, plant and equipment | 1,697,000 | ||||||||||
Operating right of use assets | 2,866,000 | ||||||||||
Goodwill | 22,430,000 | ||||||||||
Accounts receivable | 3,100,000 | ||||||||||
Unbilled revenue | 2,421,000 | ||||||||||
Other receivables | 43,000 | ||||||||||
Prepayments and other current assets | 908,000 | ||||||||||
Deferred tax asset | 1,568,000 | ||||||||||
Accounts payable | (1,280,000) | ||||||||||
Unearned revenue | (540,000) | ||||||||||
Other liabilities | (1,232,000) | ||||||||||
Current lease liabilities | (699,000) | ||||||||||
Non-current lease liabilities | (2,167,000) | ||||||||||
Non-current other liabilities | (1,123,000) | ||||||||||
Net assets acquired | 42,173,000 | ||||||||||
Cash outflows | 42,349,000 | ||||||||||
Working capital adjustment paid | (176,000) | ||||||||||
Total consideration | 42,173,000 | ||||||||||
Goodwill expected to be tax deductible | 0 | ||||||||||
Customer Relationships | Medpass | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | 11,725,000 | ||||||||||
Customer Relationships | Symphony | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | 8,159,000 | ||||||||||
Customer Relationships | MeDiNova | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | 3,887,000 | ||||||||||
Customer Relationships | MMD | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | 10,708,000 | ||||||||||
Order backlog | Medpass | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | $ 2,883,000 | ||||||||||
Order backlog | Symphony | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | $ 2,163,000 | ||||||||||
Order backlog | MeDiNova | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | 171,000 | ||||||||||
Order backlog | MMD | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | $ 2,787,000 | ||||||||||
Patient database | MeDiNova | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Customer relationships/ Order backlog | $ 2,542,000 |
Equity method investments (Deta
Equity method investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 24, 2020 | Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | ||||||
Oncacare Limited | $ 4,817 | $ 4,817 | $ 4,900 | $ 0 | ||
Equity method investment, ownership percentage (percentage) | 49.00% | 49.00% | ||||
Equity method investment, majority ownership percentage (percentage) | 51.00% | 51.00% | ||||
Equity method investment, period majority voting share capital can be sold to the company | 18 months | |||||
Payments to Acquire Equity Method Investments | $ 2,450 | $ 0 | ||||
Loss on equity method investments | $ 83 | $ 0 | $ 83 | $ 0 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | $ 0 | $ 0 | $ 18,089,000 | $ 0 | ||
Impairment of right-of-use assets | $ 5,400,000 | 5,411,000 | 0 | |||
Other liabilities | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring reserve, current | 10,200,000 | 10,200,000 | ||||
Non-current other liabilities | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring reserve, noncurrent | 4,100,000 | 4,100,000 | ||||
Resource rationalization, 2020 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | $ 0 | $ 0 | 18,089,000 | $ 0 | ||
Impairment of right-of-use assets | 5,400,000 | |||||
Resource rationalization, 2020 | Workforce reductions | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | 11,391,000 | |||||
Resource rationalization, 2020 | Onerous Lease | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | 6,698,000 | |||||
Resource rationalization, 2020 | Other restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | 1,300,000 | |||||
Resource rationalizations 2018 | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | $ 0 | $ 12,490,000 | ||||
Resource rationalizations 2018 | Workforce reductions | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | 9,684,000 | |||||
Resource rationalizations 2018 | Onerous Lease | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charge | $ 2,806,000 |
Restructuring - Rollforward Act
Restructuring - Rollforward Activity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | $ 0 | $ 0 | $ 18,089,000 | $ 0 | ||
Resource rationalization, 2020 | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 0 | $ 0 | 18,089,000 | $ 0 | ||
Utilization | (4,920,000) | |||||
Foreign exchange movement | 123,000 | |||||
Provision balance | 13,292,000 | 13,292,000 | ||||
Resource rationalization, 2020 | Workforce reductions | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 11,391,000 | |||||
Utilization | (4,278,000) | |||||
Foreign exchange movement | 0 | |||||
Provision balance | 7,113,000 | 7,113,000 | ||||
Resource rationalization, 2020 | Onerous Lease | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 6,698,000 | |||||
Utilization | (642,000) | |||||
Foreign exchange movement | 123,000 | |||||
Provision balance | 6,179,000 | 6,179,000 | ||||
Resource rationalizations 2018 | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 0 | $ 12,490,000 | ||||
Utilization | (668,000) | $ (4,782,000) | (6,071,000) | |||
Provision balance | 969,000 | 969,000 | 1,637,000 | 6,419,000 | ||
Resource rationalizations 2018 | Workforce reductions | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 9,684,000 | |||||
Utilization | (430,000) | (3,554,000) | (5,399,000) | |||
Provision balance | 301,000 | 301,000 | 731,000 | 4,285,000 | ||
Resource rationalizations 2018 | Onerous Lease | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Restructuring charge | 2,806,000 | |||||
Utilization | (238,000) | (1,228,000) | (672,000) | |||
Provision balance | $ 668,000 | $ 668,000 | $ 906,000 | $ 2,134,000 |
Operating leases - Lease Costs
Operating leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease costs | $ 7,417 | $ 8,713 | $ 23,274 | $ 26,332 |
Income from sub-leases | (268) | (378) | (781) | (1,445) |
Net operating lease costs | $ 7,149 | $ 8,335 | $ 22,493 | $ 24,887 |
Operating leases - Narrative (D
Operating leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |||||
Total lease cost | $ 7,149 | $ 8,335 | $ 22,493 | $ 24,887 | |
Right-of-use assets obtained in exchange for lease obligations | $ 5,300 | 7,500 | 8,200 | 25,400 | |
Impairment of right-of-use assets | $ 5,400 | $ 5,411 | 0 | ||
Weighted average remaining lease term (in years) | 4 years 6 months 25 days | 4 years 6 months 25 days | |||
Weighted average discount rate (percentage) | 2.58% | 2.58% | |||
Other liabilities | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease liabilities | $ 24,300 | $ 28,100 | $ 24,300 | 28,100 | |
Selling, general and administration costs | |||||
Lessee, Lease, Description [Line Items] | |||||
Total lease cost | 20,600 | 23,000 | |||
Direct costs | |||||
Lessee, Lease, Description [Line Items] | |||||
Total lease cost | $ 1,900 | $ 1,900 |
Operating leases - Operating Le
Operating leases - Operating Lease Maturity (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Due within 1 year | $ 26,237 |
Due between 1 and 5 years | 54,736 |
Thereafter | 11,491 |
Total future minimum lease payments | 92,464 |
Lease imputed interest | (5,665) |
Total | $ 86,799 |
Income taxes - Income Taxes Rec
Income taxes - Income Taxes Recognized During Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 13,706 | $ 13,020 | $ 34,967 | $ 37,516 |
Tax impact of restructuring and other items | 0 | 0 | (2,261) | 0 |
Provision for income taxes | $ 13,706 | $ 13,020 | $ 32,706 | $ 37,516 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Liability for unrecognized tax benefit | $ 20 | $ 21.3 |
Items generating unrecognized tax benefits | 19.6 | 20.2 |
Interest and related penalties | $ 0.4 | $ 1.1 |
Net income per ordinary share -
Net income per ordinary share - Reconciliation of Number of Shares Used in Computation of Basic and Diluted Net Income Per Ordinary Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Weighted average number of ordinary shares outstanding for basic net income per ordinary share (in shares) | 52,737,299 | 54,004,963 | 52,885,252 | 53,935,939 |
Effect of dilutive share options outstanding (in shares) | 457,028 | 545,709 | 398,428 | 450,127 |
Weighted average number of ordinary shares outstanding for diluted net income per ordinary share (in shares) | 53,194,327 | 54,550,672 | 53,283,680 | 54,386,066 |
Net income per ordinary share_2
Net income per ordinary share - Reconciliation of Net Income Attributable to the Group and Net Income Attributable To the Group (Including NCI Redemption Amount) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to the Group | $ 91,641 | $ 94,825 | $ 231,097 | $ 274,979 |
Noncontrolling interest adjustment to redemption amount | 0 | (1,243) | (4,522) | (1,243) |
Net income attributable to the Group (including NCI redemption adjustment) | $ 91,641 | $ 93,582 | $ 226,575 | $ 273,736 |
Net income per Ordinary Share attributable to the Group (including NCI redemption adjustment): | ||||
Basic (USD per share) | $ 1.74 | $ 1.73 | $ 4.28 | $ 5.08 |
Diluted (USD per share) | $ 1.72 | $ 1.72 | $ 4.25 | $ 5.03 |
Share-based awards - Narrative
Share-based awards - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Feb. 14, 2017 | May 11, 2015 | Jan. 17, 2003 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | May 16, 2019 | Feb. 13, 2017 |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Non-cash stock compensation expense not yet recognized | $ 52.7 | $ 52.7 | ||||||||
Unrecognized stock-based compensation expense, weighted average period | 2 years 3 months | |||||||||
Consultants Stock Plan, 2008 Plan | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Ordinary shares which have been reserved for issuance (in shares) | 1,000,000 | 400,000 | ||||||||
Limit of shares issued or to be issued pursuant to options granted (in shares) | 1,000,000 | |||||||||
Employee Stock Plan, 2008 Plan | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Ordinary shares which have been reserved for issuance (in shares) | 6,000,000 | |||||||||
Maximum number of shares per employee (in shares) | 400,000 | |||||||||
Option Plans 2008 | Minimum | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Percentage of option price for fair value of ordinary share (percentage) | 100.00% | |||||||||
Employee Stock Plan, 2003 Plan | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Ordinary shares which have been reserved for issuance (in shares) | 6,000,000 | |||||||||
Maximum number of shares per employee (in shares) | 400,000 | |||||||||
Maximum number of award as percentage of shares outstanding (percentage) | 10.00% | |||||||||
Employee Stock Option | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Weighted average contractual term of options outstanding | 5 years 21 days | 4 years 9 months 3 days | ||||||||
Weighted average fair value per option (USD per share) | $ 22.73 | |||||||||
Exercisable - number of shares (in shares) | 237,118 | 237,118 | ||||||||
Exercisable - weighted average remaining contractual life | 3 years 9 months 14 days | |||||||||
Exercisable - weighted average exercise price (USD per share) | $ 82.42 | $ 82.42 | ||||||||
Fully vested total intrinsic value | $ 25.8 | $ 25.8 | ||||||||
Intrinsic value of option exercised | $ 19.7 | $ 24.9 | ||||||||
Employee Stock Option | Minimum | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Options outstanding fair value (USD per share) | $ 11.58 | $ 11.58 | ||||||||
Employee Stock Option | Maximum | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Weighted average contractual term of options outstanding | 8 years | |||||||||
Options outstanding fair value (USD per share) | $ 46.72 | $ 46.72 | ||||||||
Employee Stock Option | Award Date, All years excluding 2018 | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Shares vesting period | 5 years | |||||||||
Shares expiration period | 8 years | |||||||||
Employee Stock Option | Non-executive directors | Award Date, 2018 | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Shares vesting period | 12 months | |||||||||
Shares expiration period | 8 years | |||||||||
Restricted Stock Units 2013 | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Ordinary shares which have been reserved for issuance (in shares) | 4,100,000 | |||||||||
Ordinary shares which have been reserved for issuance (in shares) | 2,500,000 | |||||||||
Consultants Restricted Stock Units 2019 | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Ordinary shares which have been reserved for issuance (in shares) | 250,000 | |||||||||
Consultants Restricted Stock Units 2019 | Non-executive directors | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Shares vesting period | 12 months | |||||||||
Performance Share Unit (PSUs) | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Fair value of stock units vested | $ 5.3 | $ 16.5 | ||||||||
Restricted Stock Units (RSUs) | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Fair value of stock units vested | $ 14.2 | $ 8.5 | ||||||||
PSUs Based on Service and EPS Targets | Maximum | ||||||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||||||||
Stock units to be granted (in shares) | 77,027 | 77,027 |
Share-based awards - Summary of
Share-based awards - Summary of Stock Option Activity (Details) - Employee Stock Option - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Options Outstanding Number of Shares | ||||
Outstanding at beginning of period (in shares) | 656,107 | |||
Granted (in shares) | 107,737 | |||
Exercised (in shares) | (181,144) | |||
Canceled/expired (in shares) | (11,644) | |||
Outstanding at end of period (in shares) | 571,056 | 656,107 | 571,056 | |
Exercisable at end of period (in shares) | 237,118 | 237,118 | ||
Weighted Average Exercise Price | ||||
Outstanding at beginning of period (USD per share) | $ 87.80 | |||
Granted (USD per share) | 159.83 | |||
Exercised (USD per share) | 68.10 | |||
Canceled/expired (USD per share) | 84.27 | |||
Outstanding at end of period (USD per share) | $ 107.71 | $ 87.80 | 107.71 | |
Exercisable at end of period (USD per share) | 82.42 | 82.42 | ||
Weighted Average Grant Date Fair Value | ||||
Outstanding at beginning of period (USD per share) | 26.60 | |||
Granted (USD per share) | 42.43 | $ 43.43 | ||
Exercised (USD per share) | 20.95 | |||
Canceled/expired (USD per share) | 25.56 | |||
Outstanding at end of period (USD per share) | 31.40 | $ 26.60 | 31.40 | |
Exercisable at end of period (USD per share) | $ 24.65 | $ 24.65 | ||
Weighted Average Remaining Contractual Life | ||||
Outstanding at end of period (in years) | 5 years 21 days | 4 years 9 months 3 days | ||
Exercisable at end of period (in years) | 3 years 9 months 14 days |
Share-based awards - Summary _2
Share-based awards - Summary of Movement in Non-Vested Share Options (Details) - Employee Stock Option - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Options Outstanding Number of Shares | ||
Non-vested outstanding at beginning of period (in shares) | 358,030 | |
Granted (in shares) | 107,737 | |
Vested (in shares) | (124,605) | |
Forfeited (in shares) | (7,224) | |
Non-vested outstanding at end of period (in shares) | 333,938 | |
Weighted Average Exercise Price | ||
Non-vested outstanding at beginning of period (USD per share) | $ 103.68 | |
Granted (USD per share) | 159.83 | |
Vested (USD per share) | 92.25 | |
Forfeited (USD per share) | 122.18 | |
Non-vested outstanding at end of period (USD per share) | 125.66 | |
Weighted Average Grant Date Fair Value | ||
Non-vested outstanding at beginning of period (USD per share) | 31.28 | |
Granted (USD per share) | 42.43 | $ 43.43 |
Vested (USD per share) | 27.51 | |
Forfeited (USD per share) | 35.25 | |
Non-vested outstanding at end of period (USD per share) | $ 36.20 |
Share-based awards - Schedule o
Share-based awards - Schedule of Weighted Average Fair Values and Assumptions Used (Details) - Employee Stock Option - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value | $ 42.43 | $ 43.43 | ||
Assumptions: | ||||
Expected volatility | 30.00% | 30.00% | ||
Dividend yield | 0.00% | 0.00% | ||
Risk-free interest rate | 0.57% | 2.55% | ||
Expected life | 5 years | 5 years |
Share-based awards - Summary _3
Share-based awards - Summary of RSU and PSU Activity (Details) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
Performance Share Unit (PSUs) | |||
Outstanding Number of Shares | |||
Outstanding at beginning of period (in shares) | 175,989 | ||
Granted (in shares) | 57,184 | ||
Shares vested (in shares) | (63,516) | ||
Forfeited (in shares) | (3,702) | ||
Outstanding at end of period (in shares) | 165,955 | 175,989 | 165,955 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of period (USD per share) | $ 110.79 | ||
Granted (USD per share) | 165.30 | ||
Shares vested (USD per share) | 83.92 | ||
Forfeited (USD per share) | 136.16 | ||
Outstanding at end of period (USD per share) | $ 137.56 | $ 110.79 | $ 137.56 |
Weighted Average Remaining Contractual Life | |||
Outstanding at end of period (in years) | 1 year 4 months 20 days | 1 year 14 days | |
Restricted Stock Units (RSUs) | |||
Outstanding Number of Shares | |||
Outstanding at beginning of period (in shares) | 389,900 | ||
Granted (in shares) | 126,998 | ||
Shares vested (in shares) | (144,170) | ||
Forfeited (in shares) | (30,112) | ||
Outstanding at end of period (in shares) | 342,616 | 389,900 | 342,616 |
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of period (USD per share) | $ 119.07 | ||
Granted (USD per share) | 165.43 | ||
Shares vested (USD per share) | 98.34 | ||
Forfeited (USD per share) | 131.38 | ||
Outstanding at end of period (USD per share) | $ 143.87 | $ 119.07 | $ 143.87 |
Weighted Average Remaining Contractual Life | |||
Outstanding at end of period (in years) | 1 year 7 months 9 days | 1 year 5 months 4 days |
Share-based awards - Schedule_2
Share-based awards - Schedule of Non-cash Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 6,971 | $ 8,231 | $ 20,157 | $ 21,065 |
Direct costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | 2,284 | 4,535 | 6,472 | 11,607 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 4,687 | $ 3,696 | $ 13,685 | $ 9,458 |
Share capital (Details)
Share capital (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 08, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares redeemed, value | $ 175,000 | |||
Buyback Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Share repurchase program, number of shares authorized to be repurchased (in shares) | 1,000,000 | |||
Shares redeemed, value | $ 5,300 | $ 175,000 | $ 141,600 | |
Shares redeemed (in shares) | 35,100 | 1,235,218 | ||
Buyback Program | Maximum | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Share repurchase program, authorized percentage (percentage) | 10.00% |
Business segment information -
Business segment information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Business segment information _2
Business segment information - Distribution of Revenue by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 701,729 | $ 710,441 | $ 2,037,059 | $ 2,080,430 |
Ireland | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 250,230 | 320,459 | 844,945 | 929,419 |
Rest of Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 100,635 | 98,080 | 292,453 | 282,717 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 285,550 | 223,900 | 700,483 | 664,752 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 65,314 | $ 68,002 | $ 199,178 | $ 203,542 |
Business segment information _3
Business segment information - Distribution of Income from Operations, Including Restructuring, by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Income from operations, including restructuring | $ 108,401 | $ 110,044 | $ 271,641 | $ 318,080 |
Ireland | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations, including restructuring | 81,800 | 82,529 | 194,390 | 231,202 |
Rest of Europe | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations, including restructuring | 4,713 | 10,234 | 22,529 | 21,747 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations, including restructuring | 14,399 | 11,975 | 37,667 | 45,382 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations, including restructuring | $ 7,489 | $ 5,306 | $ 17,055 | $ 19,749 |
Business segment information _4
Business segment information - Distribution of Income from Operations, Excluding Restructuring by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Operating income (loss) excluding restructuring | $ 108,401 | $ 110,044 | $ 289,730 | $ 318,080 |
Ireland | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) excluding restructuring | 81,800 | 82,529 | 212,479 | 231,202 |
Rest of Europe | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) excluding restructuring | 4,713 | 10,234 | 22,529 | 21,747 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) excluding restructuring | 14,399 | 11,975 | 37,667 | 45,382 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) excluding restructuring | $ 7,489 | $ 5,306 | $ 17,055 | $ 19,749 |
Business segment information _5
Business segment information - Distribution of Long-lived Assets, Net, by Geographical Area (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | $ 245,728 | $ 270,064 |
Ireland | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 108,861 | 110,522 |
Rest of Europe | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 33,825 | 41,970 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 62,502 | 72,578 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | $ 40,540 | $ 44,994 |
Business segment information _6
Business segment information - Distribution of Depreciation and Amortization by Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Depreciation, amortization and reduction in carrying value of right-of-use assets | $ 23,831 | $ 22,978 | $ 70,348 | $ 68,709 |
Ireland | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, amortization and reduction in carrying value of right-of-use assets | 8,556 | 6,990 | 24,748 | 21,906 |
Rest of Europe | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, amortization and reduction in carrying value of right-of-use assets | 4,016 | 3,560 | 11,503 | 10,612 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, amortization and reduction in carrying value of right-of-use assets | 7,406 | 6,563 | 22,246 | 23,743 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, amortization and reduction in carrying value of right-of-use assets | $ 3,853 | $ 5,865 | $ 11,851 | $ 12,448 |
Business segment information _7
Business segment information - Distribution of Total Assets by Geographical Area (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Assets | $ 3,065,298 | $ 2,907,512 |
Ireland | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,492,836 | 1,323,181 |
Rest of Europe | ||
Segment Reporting Information [Line Items] | ||
Assets | 645,165 | 660,797 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Assets | 759,692 | 755,271 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 167,605 | $ 168,263 |