Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Syneos Health, Inc. | |
Entity Central Index Key | 1,610,950 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 102,781,233 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Service revenue | $ 1,057,196 | $ 252,078 |
Reimbursable out-of-pocket expenses | 0 | 129,840 |
Total revenue | 1,057,196 | 381,918 |
Costs and operating expenses: | ||
Direct costs (exclusive of depreciation and amortization) | 532,057 | 154,835 |
Reimbursable out-of-pocket expenses | 308,766 | 129,840 |
Selling, general, and administrative | 99,259 | 44,934 |
Restructuring and other costs | 13,707 | 1,927 |
Transaction and integration-related expenses | 25,211 | 2 |
Depreciation | 18,028 | 6,164 |
Amortization | 49,993 | 9,464 |
Total operating expenses | 1,047,021 | 347,166 |
Income from operations | 10,175 | 34,752 |
Other (expense) income, net: | ||
Interest income | 839 | 112 |
Interest expense | (31,736) | (3,100) |
Loss on extinguishment of debt | (248) | 0 |
Other expense, net | (12,554) | (3,457) |
Total other expense, net | (43,699) | (6,445) |
(Loss) income before provision for income taxes | (33,524) | 28,307 |
Income tax benefit (expense) | 8,972 | (7,120) |
Net (loss) income | $ (24,552) | $ 21,187 |
(Loss) earnings per share: | ||
Basic (USD per share) | $ (0.24) | $ 0.39 |
Diluted (USD per share) | $ (0.24) | $ 0.38 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 104,449 | 54,015 |
Diluted (in shares) | 104,449 | 55,123 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (24,552) | $ 21,187 |
Unrealized gain on derivative instruments, net of income tax (expense) of $0 and $(87), respectively | 434 | 150 |
Foreign currency translation adjustments, net of income tax (expense) of $(2,868) and $0, respectively | 33,923 | 4,846 |
Comprehensive income | $ 9,805 | $ 26,183 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized (loss) gain on derivative instruments, income tax benefit (expense) | $ 0 | $ (87) |
Foreign currency translation adjustments, income tax benefit (expense) | $ (2,868) | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 186,719 | $ 321,262 |
Restricted cash | 2,236 | 714 |
Accounts receivable billed, net | 600,796 | 642,985 |
Accounts receivable unbilled | 392,536 | 373,003 |
Contract assets | 111,934 | 0 |
Prepaid expenses and other current assets | 94,291 | 84,215 |
Total current assets | 1,388,512 | 1,422,179 |
Property and equipment, net | 173,051 | 180,412 |
Goodwill | 4,306,244 | 4,292,571 |
Intangible assets, net | 1,241,709 | 1,286,050 |
Deferred income tax assets | 27,709 | 20,159 |
Other long-term assets | 104,679 | 84,496 |
Total assets | 7,241,904 | 7,285,867 |
Current liabilities: | ||
Accounts payable | 69,500 | 58,575 |
Accrued liabilities | 518,383 | 500,303 |
Contract liabilities | 643,338 | 559,270 |
Current portion of capital lease obligations | 15,889 | 16,414 |
Current portion of long-term debt | 31,250 | 25,000 |
Total current liabilities | 1,278,360 | 1,159,562 |
Capital lease obligations, non-current | 15,607 | 20,376 |
Long-term debt, non-current | 2,908,366 | 2,945,934 |
Deferred income tax liabilities | 22,265 | 37,807 |
Other long-term liabilities | 110,047 | 99,609 |
Total liabilities | 4,334,645 | 4,263,288 |
Commitments and contingencies (Note 15) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value; 30,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 0 | 0 |
Common stock, $0.01 par value; 600,000,000 shares authorized, 103,803,581 and 104,435,501 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 1,038 | 1,044 |
Additional paid-in capital | 3,394,586 | 3,414,389 |
Accumulated other comprehensive income (loss), net of tax | 15,822 | (22,385) |
Accumulated deficit | (504,187) | (370,469) |
Total shareholders' equity | 2,907,259 | 3,022,579 |
Total liabilities and shareholders' equity | $ 7,241,904 | $ 7,285,867 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 30,000,000 | 30,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock shares issued (in shares) | 103,803,581 | 104,435,501 |
Common stock shares outstanding (in shares) | 103,803,581 | 104,435,501 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (24,552) | $ 21,187 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 68,021 | 15,628 |
Amortization of capitalized loan fees and original issue discount, net of Senior Notes premium | (34) | 201 |
Share-based compensation | 7,879 | 5,819 |
Provision for (recovery of) doubtful accounts | 171 | (7) |
Provision for deferred income taxes | (10,735) | 87 |
Foreign currency transaction losses | 6,364 | 2,707 |
Fair value adjustment of contingent tax-sharing obligation | 1,194 | 0 |
Loss on extinguishment of debt | 248 | 0 |
Other non-cash items | 1,796 | 364 |
Changes in operating assets and liabilities, net of effect of business combinations: | ||
Accounts receivable, unbilled services, and advanced billings | (90,617) | 47,496 |
Accounts payable and accrued expenses | (14,241) | (20,457) |
Other assets and liabilities | 7,521 | 2,674 |
Net cash (used in) provided by operating activities | (46,985) | 75,699 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (21,286) | (10,571) |
Net cash used in investing activities | (21,286) | (10,571) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (31,250) | 0 |
Proceeds from revolving line of credit | 0 | 15,000 |
Repayments of revolving line of credit | 0 | (25,000) |
Payments of capital leases | (4,479) | 0 |
Payments for repurchase of common stock | (37,493) | 0 |
Proceeds from exercise of stock options | 5,668 | 5,153 |
Payments related to tax withholding for share-based compensation | (2,323) | (1,173) |
Net cash used in financing activities | (69,877) | (6,020) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,127 | 2,854 |
Net change in cash, cash equivalents, and restricted cash | (133,021) | 61,962 |
Cash, cash equivalents, and restricted cash - beginning of period | 321,976 | 103,078 |
Cash, cash equivalents, and restricted cash - end of period | 188,955 | 165,040 |
Supplemental disclosures of non-cash investing activities: | ||
Purchases of property and equipment included in liabilities | 5,494 | 1,757 |
Vehicles acquired through capital lease agreements | $ 1,184 | $ 0 |
Basis of Presentation and Chang
Basis of Presentation and Changes in Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Changes in Significant Accounting Policies | Basis of Presentation and Changes in Significant Accounting Policies Nature of Operations Syneos Health, Inc. (the “Company”) is a global end-to-end outsourcing biopharmaceutical solutions organization. The Company operates under two reportable segments, Clinical Solutions and Commercial Solutions, and derives its revenue through a suite of services designed to enhance its customers’ ability to successfully develop, launch, and market their products. The Company offers its solutions on both a standalone and integrated basis with biopharmaceutical development and commercialization services ranging from Phase I-IV clinical trial services to services associated with the commercialization of biopharmaceutical products. The Company’s customers include small, mid-sized, and large companies in the pharmaceutical, biotechnology, and medical device industries. Merger On August 1, 2017, the Company completed the merger (the “Merger”) with Double Eagle Parent, Inc. (“inVentiv”), the parent company of inVentiv Health, Inc. Upon closing, inVentiv was merged with and into the Company, with the Company continuing as the surviving corporation. Beginning August 1, 2017, inVentiv’s results of operations are included in the accompanying unaudited condensed consolidated financial statements. For additional information related to the Merger, see “Note 3 - Business Combinations .” Unaudited Interim Financial Information The Company prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The unaudited condensed consolidated financial statements, in management’s opinion, include all adjustments of a normal recurring nature necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 . The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018 or any other future period. The unaudited condensed consolidated balance sheet at December 31, 2017 is derived from the amounts in the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Recently Adopted Accounting Standards Revenue from Contracts with Customers. The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the three months ended March 31, 2018 reflect the application of ASC 606, while the reported results for the three months ended March 31, 2017 were prepared under ASC 605, Revenue Recognition (“ASC 605”). For additional information related to the impact of adopting this standard, see “Note 10 - Revenue from Contracts with Customers .” Statement of Cash Flows - Restricted Cash. Effective January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash using the retrospective transition method, as required by the new standard. The adoption of this ASU had an immaterial impact to the Company’s unaudited condensed consolidated statements of cash flows. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets at March 31, 2018 and December 31, 2017 , that sum to the total of such amounts in the consolidated statements of cash flows (in thousands): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 186,719 $ 321,262 Restricted cash 2,236 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 188,955 $ 321,976 Comprehensive Income - Reclassifications of Certain Tax Effects. Effective January 1, 2018, the Company elected to early adopt ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . Under the updated accounting guidance, the Company is allowed to reclassify the stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate resulting from the Tax Cuts and Jobs Act (“Tax Act”) is recorded. Upon adoption, the Company recorded an increase to other comprehensive income of $3.9 million and a reduction in retained earnings of $3.9 million . There was no impact on prior periods. Recently Issued Accounting Standards Not Yet Adopted Leases. In February 2016, the Financial Accounting Standards board (“FASB”) issued ASU No. 2016-02, Leases . ASU 2016-02 requires organizations to recognize lease assets and lease liabilities on the balance sheet, including leases that were previously classified as operating leases. The ASU also requires additional disclosures about leasing arrangements related to the amount, timing, and uncertainty of cash flows arising from leases. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments is permitted and the new guidance will be applied using a modified retrospective approach. The Company plans to adopt the standard on January 1, 2019 and is currently assessing the potential impact of this standard on its consolidated financial statements. |
Financial Statement Details
Financial Statement Details | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Details | Financial Statement Details Cash and Cash Equivalents Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements. The parties to the arrangement combine their cash balances in pooling accounts with the ability to offset bank overdrafts of one subsidiary against positive cash account balances maintained in another subsidiary’s bank account at the same financial institution. The net cash balance related to this pooling arrangement is included in the “Cash and cash equivalents” line item in the unaudited condensed consolidated balance sheet. The Company’s net cash pool position consisted of the following (in thousands): March 31, 2018 December 31, 2017 Gross cash position $ 145,210 $ 195,376 Less: cash borrowings (128,578 ) (88,226 ) Net cash position $ 16,632 $ 107,150 Billed Accounts Receivable, Net Billed accounts receivable, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accounts receivable billed $ 610,333 $ 652,061 Allowance for doubtful accounts (9,537 ) (9,076 ) Accounts receivable billed, net $ 600,796 $ 642,985 In May 2017, the Company entered into an accounts receivable factoring agreement to sell certain eligible unsecured trade accounts receivable, without recourse, to an unrelated third-party financial institution for cash. Under the terms of the agreement, the Company retains no rights or interest and has no obligations with respect to the sold accounts receivable. The Company accounts for sales of trade accounts receivable under this agreement as true sales, and trade accounts receivable balances that are sold are derecognized from the consolidated balance sheets. The cash proceeds received are reflected as cash provided by operating activities on the Company’s consolidated statements of cash flows. For the three months ended March 31, 2018 , the Company factored $45.4 million of trade accounts receivable on a non-recourse basis and received $45.2 million in cash proceeds from the sale. The fees associated with this transaction were immaterial. The Company did not sell any trade accounts receivables under this agreement during the year ended December 31, 2017 . Goodwill Changes in the carrying amount of goodwill by segment for the three months ended March 31, 2018 were as follows (in thousands): Total Clinical Commercial Balance at December 31, 2017: Gross carrying amount $ 4,308,737 $ 2,808,975 $ 1,499,762 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses 4,292,571 2,800,833 1,491,738 2018 Activity: Business combinations (b) (4,214 ) (2,529 ) (1,685 ) Impact of foreign currency translation 17,887 11,927 5,960 Balance at March 31, 2018: Gross carrying amount 4,322,410 2,818,373 1,504,037 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses $ 4,306,244 $ 2,810,231 $ 1,496,013 (a) Accumulated impairment losses associated with the Clinical Solutions segment were recorded in fiscal periods prior to 2018 and related to the former Phase I Services segment, now a component of the Clinical Solutions segment. Accumulated impairment losses associated with the Commercial Solutions segment were recorded in fiscal periods prior to 2018 and related to the former Global Consulting segment, now a component of the Commercial Solutions segment. No impairment of goodwill was recorded for the three months ended March 31, 2018 . (b) Amount represents measurement period adjustments to goodwill recognized in connection with the Merger. Goodwill associated with the Merger is not deductible for income tax purposes. See “Note 3 - Business Combinations” for further information. Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other comprehensive income (loss), net of tax, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Foreign currency translation adjustments, net of tax $ 14,003 $ (23,514 ) Unrealized gains on derivative instruments, net of tax 1,819 1,129 Accumulated other comprehensive income (loss), net of tax $ 15,822 $ (22,385 ) Changes in accumulated other comprehensive income (loss), net of tax for the three months ended March 31, 2018 were as follows (in thousands): Unrealized gain on derivative instruments, net of tax Foreign currency translation adjustments, net of tax Total Balance at December 31, 2017 $ 1,129 $ (23,514 ) $ (22,385 ) Reclassification of income tax benefit due to adoption of ASU 2018-02 256 3,594 3,850 Balance at January 1, 2018 1,385 (19,920 ) (18,535 ) Other comprehensive gain before reclassifications 711 33,923 34,634 Amount of gain reclassified from accumulated other comprehensive income (loss) into the statements of operations (277 ) — (277 ) Net current period other comprehensive gain, net of tax 434 33,923 34,357 Balance at March 31, 2018 $ 1,819 $ 14,003 $ 15,822 Unrealized gains on derivative instruments represent the effective portion of gains associated with interest rate swaps. Designated as cash flow hedges, the interest rate swaps limit the variable interest rate exposure associated with the Company’s term loans. The Company reclassifies these gains into net income as it makes interest payments on its term loan. Amounts to be reclassified to net income in the next 12 months are expected to be immaterial. The tax effects allocated to each component of other comprehensive income for the three months ended March 31, 2018 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 36,791 $ (2,868 ) $ 33,923 Unrealized gain on derivative instruments: Unrealized gains arising during period 711 — 711 Reclassification adjustment of realized gains to net income (277 ) — (277 ) Net unrealized gain 434 — 434 Other comprehensive income $ 37,225 $ (2,868 ) $ 34,357 The tax effects allocated to each component of other comprehensive income for the three months ended March 31, 2017 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 4,846 $ — $ 4,846 Unrealized gain on derivative instruments: Unrealized gains arising during the period 305 (112 ) 193 Reclassification adjustment of realized gains to net income (68 ) 25 (43 ) Net unrealized gain 237 (87 ) 150 Other comprehensive income $ 5,083 $ (87 ) $ 4,996 Other Expense, Net Other expense, net consisted of the following (in thousands): Three Months Ended March 31, 2018 2017 Net realized foreign currency loss $ (5,517 ) $ (670 ) Net unrealized foreign currency loss (6,364 ) (2,707 ) Other, net (673 ) (80 ) Total other expense, net $ (12,554 ) $ (3,457 ) |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Transaction Overview On August 1, 2017 (the “Merger Date”), the Company completed the Merger with inVentiv with the Company surviving as the accounting and legal entity acquirer. The Merger was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . The purchase price has been preliminarily allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their fair values. The excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed has been recorded as goodwill. The goodwill in connection with the Merger is primarily attributable to the assembled workforce of inVentiv and the expected synergies of the Merger. For the three months ended March 31, 2018 , the Company incurred $25.2 million of integration-related expenses which were accounted for separately from the business combination and expensed as incurred within the “Transaction and integration-related expenses” line item of the unaudited condensed consolidated statements of operations. These costs consisted primarily of consulting, accounting fees, and employee retention bonuses. In connection with the Merger, the Company assumed certain contingent tax-sharing obligations of inVentiv. The fair value of the contingent tax-sharing liability is remeasured at the end of each reporting period, with changes in the estimated fair value reflected in earnings until the liability is fully settled. The estimated fair value of the contingent tax-sharing obligation liability was $51.7 million and $50.5 million as of March 31, 2018 and December 31, 2017 , respectively. The liability is included in the “Accrued liabilities” and “Other long-term liabilities” line items of the accompanying unaudited condensed consolidated balance sheet. The results of inVentiv’s operations have been included in the Company’s statements of operations since the Merger Date. Computing separate measures of inVentiv’s stand-alone revenue and profitability for the period after the Merger Date is impracticable. Allocation of Consideration Transferred The Merger Date fair value of the consideration transferred was $4.51 billion . The following table summarizes the preliminary allocation of the consideration transferred based on management’s estimates of Merger Date fair values of assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill (in thousands): March 31, 2018 Assets acquired: Cash and cash equivalents $ 57,338 Restricted cash 433 Accounts receivable 367,169 Unbilled accounts receivable 261,585 Other current assets 95,506 Property and equipment 113,674 Intangible assets 1,334,200 Other assets 50,052 Total assets acquired 2,279,957 Liabilities assumed: Accounts payable 38,072 Accrued liabilities 306,649 Contract liabilities 247,474 Capital leases 40,928 Long-term debt, current and non-current 737,872 Deferred income taxes, net 11,382 Other liabilities 121,238 Total liabilities assumed 1,503,615 Total identifiable assets acquired, net 776,342 Goodwill $ 3,729,281 The goodwill recognized in connection with the Merger was $3.73 billion , with $2.24 billion of the goodwill assigned to the Clinical Solutions segment and $1.49 billion assigned to the Commercial Solutions segment. Goodwill generated in the Merger is not deductible for income tax purposes. The Company’s assessment of fair value and purchase price allocation are preliminary and subject to change upon completion of the measurement period. During the three months ended March 31, 2018 , the Company made adjustments to the preliminary fair value of acquired assets and assumed liabilities to reflect additional information obtained in connection with the Merger. The net effect of the adjustments was a decrease in goodwill of $4.2 million . Further adjustments may be necessary as additional information related to the fair values of assets acquired and liabilities assumed is assessed during the measurement period (up to one year from the Merger Date). Unaudited Pro Forma Financial Information The following unaudited pro forma financial information was derived from the historical financial statements of the Company and inVentiv and presents the combined results of operations as if the Merger had occurred on January 1, 2016. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results that would have actually occurred had the Merger been completed on January 1, 2016. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may result from the Merger, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of inVentiv. Consequently, actual future results of the Company will differ from the unaudited pro forma financial information presented. Three Months Ended March 31, 2017 (In thousands, except per share data) Pro forma total revenue $ 1,064,963 Pro forma net income 3,119 Pro forma income per share: Basic $ 0.03 Diluted $ 0.03 The unaudited pro forma adjustments primarily relate to the depreciation of acquired property and equipment, amortization of acquired intangible assets and interest expense and amortization of deferred financing costs related to the new financing arrangements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Carried at Fair Value As of March 31, 2018 and December 31, 2017 , the Company’s financial assets and liabilities carried at fair value included cash and cash equivalents, restricted cash, trading securities, billed and unbilled accounts receivable, contract assets, accounts payable, accrued liabilities, contract liabilities, assumed contingent tax-sharing obligations, capital leases, and interest rate derivative instruments. The fair value of cash and cash equivalents, restricted cash, billed and unbilled accounts receivable, contract assets, accounts payable, accrued liabilities, and contract liabilities approximates their respective carrying amounts because of the liquidity and short-term nature of these financial instruments. Financial Instruments Subject to Recurring Fair Value Measurements As of March 31, 2018 , the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Total Assets: Trading securities $ 16,137 $ — $ — $ 16,137 Derivative instruments — 2,601 — 2,601 Total assets $ 16,137 $ 2,601 $ — $ 18,738 Liabilities: Contingent tax-sharing obligation assumed through business combinations $ — $ — $ 51,674 $ 51,674 Total liabilities $ — $ — $ 51,674 $ 51,674 As of December 31, 2017 , the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Total Assets: Trading securities $ 16,318 $ — $ — $ 16,318 Derivative instruments — 2,179 — 2,179 Total assets $ 16,318 $ 2,179 $ — $ 18,497 Liabilities: Contingent tax-sharing obligation assumed through business combinations $ — $ — $ 50,480 $ 50,480 Total liabilities $ — $ — $ 50,480 $ 50,480 The following table presents changes in the carrying amount of contingent tax-sharing obligations classified as Level 3 category within the fair value hierarchy for the three months ended March 31, 2018 (in thousands): Balance at December 31, 2017 $ 50,480 Changes in fair value recognized in earnings 1,194 Payments — Balance at March 31, 2018 $ 51,674 During the three months ended March 31, 2018 , there were no transfers of assets or liabilities between Level 1, Level 2 or Level 3 fair value measurements. Financial Instruments Subject to Non-Recurring Fair Value Measurements Certain assets, including goodwill and identifiable intangible assets, are carried on the balance sheets at cost and, subsequent to initial recognition, are measured at fair value on a non-recurring basis when certain identified events or changes in circumstances that may have a significant adverse effect on the carrying values of these assets occur. These assets are classified as Level 3 fair value measurements within the fair value hierarchy. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate a triggering event has occurred. Intangible assets are tested for impairment upon the occurrence of certain triggering events. As of March 31, 2018 and December 31, 2017 , assets subject to non-recurring fair value measurements totaled $5.55 billion and $5.58 billion , respectively. Fair Value Disclosures for Debt Not Carried at Fair Value The estimated fair value of the outstanding term loans and Senior Unsecured Notes is determined based on the exit price that the Company would have to pay to settle the liabilities. As these liabilities are not actively traded, they are classified as Level 2 fair value measurements. The estimated fair values of the Company’s outstanding term loans and Senior Unsecured Notes were as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Term Loan A due August 2022 $ 993,750 $ 993,750 $ 1,000,000 $ 1,000,000 Term Loan B due August 2024 (net of original issue debt discount) 1,523,261 1,525,000 1,548,149 1,550,000 7.5% Senior Unsecured Notes due 2024 (inclusive of unamortized premium) 442,092 433,225 443,507 433,729 |
Restructuring and Other Costs
Restructuring and Other Costs | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Costs | Restructuring and Other Costs Merger-Related Restructuring In connection with the Merger, the Company established a restructuring plan to eliminate redundant positions and reduce its facility footprint worldwide. The Company expects to continue the ongoing evaluations of its workforce and facilities infrastructure needs through 2020 in an effort to optimize its resources. Additionally, in conjunction with the Merger, the Company assumed certain liabilities related to employee severance and facility closure costs as a result of actions taken by inVentiv prior to the Merger. During the three months ended March 31, 2018 , the Company recognized approximately: (i) $8.4 million of employee severance and benefits related costs; (ii) $2.2 million of facility closure and lease termination costs; and (iii) $0.3 million of other costs related to the Merger. Over the next several years, the Company expects to incur significant costs related to the restructuring of its operations in order to achieve targeted synergies from the Merger. The timing and the amount of these costs may differ significantly from current management’s estimates and depends on various factors, including, but not limited to, identifying and realizing synergy opportunities and executing the integration of the Company’s operations. Other Restructuring During the three months ended March 31, 2018 , the Company incurred $0.8 million of facility closure and lease termination costs related to the Company’s pre-Merger activities aimed at optimizing its resources worldwide. Additionally, during the three months ended March 31, 2018 , the Company recognized (i) approximately $1.7 million of consulting costs related to the restructuring of its contract management processes to meet the requirements of the newly adopted revenue recognition accounting standard; (ii) $0.2 million of employee severance and benefits related costs, and (iii) $0.1 million of other costs. Accrued Restructuring Liabilities The following table summarizes activity related to the liabilities associated with restructuring and other costs during the three months ended March 31, 2018 (in thousands): Employee Severance Costs, Including Executive Transition Costs Facility Closure and Lease Termination Costs Other Costs Total Balance at December 31, 2017 $ 8,858 $ 7,411 $ 524 $ 16,793 Expenses incurred (a) 8,572 1,303 1,801 11,676 Cash payments made (9,511 ) (1,697 ) (1,683 ) (12,891 ) Balance at March 31, 2018 $ 7,919 $ 7,017 $ 642 $ 15,578 (a) The amount of expenses incurred presented in the reconciliation of accrued restructuring liabilities excludes $2.0 million of non-cash restructuring and other expenses incurred for the three months ended March 31, 2018 as these expenses were not subject to accrual prior to the period in which they were incurred. The Company expects that substantially all of the employee severance costs accrued as of March 31, 2018 will be paid within the next twelve months. Certain facility costs will be paid over the remaining terms of exited facility leases, which range from 2018 through 2027. Liabilities associated with these costs are included in the “Accrued liabilities” and “Other long-term liabilities” line items in the accompanying unaudited condensed consolidated balance sheets. Restructuring and other costs included in net loss for three months ended March 31, 2018 are presented in the “Restructuring and other costs” line item in the unaudited condensed consolidated statements of operations. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity 2018 Stock Repurchase Program On February 26, 2018, the Company’s Board of Directors authorized the repurchase of up to an aggregate of $250.0 million of the Company’s common stock, par value $0.01 per share, to be executed from time to time in open market transactions effected through a broker at prevailing market prices, in block trades or through privately negotiated transactions (“2018 stock repurchase program”). The 2018 stock repurchase program commenced on March 1, 2018 and will end no later than December 31, 2019. The Company intends to use cash on hand and future operating cash flow to fund the stock repurchase program. The 2018 stock repurchase program does not obligate the Company to repurchase any particular amount of the Company’s common stock, and may be modified, extended, suspended or discontinued at any time. The timing and amount of repurchases will be determined by the Company’s management based on a variety of factors such as the market price of the Company’s common stock, the Company’s corporate requirements for cash, and overall market conditions. The stock repurchase program will be subject to applicable legal requirements, including federal and state securities laws. The Company may also repurchase shares of its common stock pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit shares of the Company’s common stock to be repurchased when the Company might otherwise be precluded from doing so by law. In March 2018, the Company repurchased 948,100 shares of its common stock in open market transactions at an average price of $39.55 per share, resulting in a total purchase price of approximately $37.5 million . The Company immediately retired all of the repurchased common stock and charged the par value of the shares to common stock. The excess of the repurchase price over par was applied on a pro rata basis against additional paid-in-capital, with the remainder applied to accumulated deficit. As of March 31, 2018 , the Company has remaining authorization to repurchase up to $212.5 million of shares of its common stock under the 2018 stock repurchase program. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Stock Unit Award Activity The following table summarizes the RSU activity during the three months ended March 31, 2018 : Number of Shares Weighted Average Non-vested at December 31, 2017 907,580 $ 49.30 Granted 1,798,554 $ 38.22 Vested (172,277 ) $ 49.39 Forfeited (4,387 ) $ 39.68 Non-vested at March 31, 2018 2,529,470 $ 41.44 At March 31, 2018 , total unrecognized compensation expense related to unvested RSUs was $91.7 million , which is expected to be recognized over a weighted average period of 2.6 years . 2018 Performance-Based RSU Awards In February 2018, the Compensation Committee of the Company’s Board of Directors granted performance-based RSU awards (“PRSUs”) to certain executive officers. The total number of PRSUs granted was 185,432 which will vest in a percentage ranging from 0% to 150% depending on the level of achievement of the performance targets. Each award is scheduled to cliff-vest in approximately three years from the grant date and consists of three equal tranches with vesting conditional upon: (i) the attainment of performance targets related to the Company’s revenue growth for fiscal years 2018, 2019, and 2020; and (ii) the continued employment and service of the employee from the grant date through the date when determination of the target attainment level for the last performance period is made. The Company recognizes share-based compensation expense for PRSUs when attainment of each performance target is probable of achievement. Share-based Compensation Expense The total amount of share-based compensation expense recognized in the unaudited condensed consolidated statements of operations was as follows (in thousands): Three Months Ended March 31, Statement of Operations Classification 2018 2017 Direct costs $ 3,752 $ 2,713 Selling, general, and administrative expenses 4,036 3,106 Restructuring and other costs 91 — Total share-based compensation expense $ 7,879 $ 5,819 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period. A reconciliation of the numerators and denominators of the basic and diluted per share computations of weighted average common shares outstanding based on the Company’s consolidated net (loss) income is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 2017 Numerator: Net (loss) income $ (24,552 ) $ 21,187 Denominator: Basic weighted average common shares outstanding 104,449 54,015 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — 1,108 Diluted weighted average common shares outstanding 104,449 55,123 (Loss) earnings per share: Basic $ (0.24 ) $ 0.39 Diluted $ (0.24 ) $ 0.38 Potential common shares outstanding that are considered antidilutive are excluded from the computation of diluted earnings per share. Potential common shares related to stock options and other awards under deferred share-based compensation programs may be determined to be antidilutive based on the application of the treasury stock method. Potential common shares are also considered antidilutive in the event of net loss from operations. The number of potential shares outstanding that were considered antidilutive using the treasury stock method and therefore excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding are as follows (in thousands): Three Months Ended March 31, 2018 2017 Anti-dilutive stock options and other awards 1,097 908 Anti-dilutive stock options and other awards under deferred share-based compensation programs excluded based on reporting of net loss for the period 898 — Total common stock equivalents excluded from diluted earnings per share computation 1,995 908 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Expense For the three months ended March 31, 2018 , the Company recorded income tax benefit of $9.0 million , representing an effective tax rate of 26.8% . The effective tax rate for the three months ended March 31, 2018 varied from the U.S. federal statutory income tax rate of 21.0% primarily due to: (i) research tax credits in foreign jurisdictions; (ii) a decrease in unrecognized tax benefits; and (iii) a valuation allowance change on domestic deferred tax assets. For the three months ended March 31, 2017 , the Company recorded income tax expense of $7.1 million , representing an effective tax rate of 25.2% . The effective tax rate for the three months ended March 31, 2017 was lower than the U.S. federal statutory income tax rate of 35.0% primarily due to: (i) income earned in various international tax jurisdictions that apply lower income tax rates; (ii) research tax credits; and (iii) discrete tax adjustments related to excess tax benefits on share-based compensation payments. Unrecognized Tax Benefits The Company's gross unrecognized tax benefits, exclusive of associated interest and penalties, were $42.4 million and $43.7 million as of March 31, 2018 and December 31, 2017 , respectively. The decrease of $1.3 million during the three months ended March 31, 2018 was due to the settlement of a tax audit in a foreign jurisdiction. Tax Cuts and Jobs Act of 2017 The Company’s accounting for the effects of the Tax Act is incomplete as of March 31, 2018 . However, as discussed in “Note 12 - Income Taxes” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 , the Company was able to reasonably estimate certain effects and, therefore, recorded provisional adjustments associated with the deemed repatriation transition tax and remeasurement of net deferred tax assets. The Company did not make any additional measurement-period adjustments related to these items during the three months ended March 31, 2018 , because the Company has not completed its analysis of the components of the computation, including: (i) the amount of foreign earnings subject to the U.S. income tax; (ii) the portion of foreign earnings held in cash or other specified assets; and (iii) the state tax treatment of the provisions of the Tax Act. The Company is continuing to gather additional information for these items and expects to complete its accounting within the prescribed measurement period. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customers | Revenue from Contracts with Customers Service Revenue The Company adopted ASC 606 - Revenue from Contracts with Customers and all the related amendments (“new revenue standard” or “ASC 606”) on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the three months ended March 31, 2018 reflect the application of ASC 606, while the reported results for the three months ended March 31, 2017 were prepared under ASC 605 - Revenue Recognition and other authoritative guidance in effect for this period. In accordance with ASC 606, revenue is now recognized when, or as, a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. A performance obligation is a promise (or a combination of promises) in a contract to transfer distinct goods or services to a customer and is the unit of accounting under ASC 606 for the purposes of revenue recognition. A contract’s transaction price is allocated to each separate performance obligation based upon the standalone selling price and is recognized as revenue, when, or as, the performance obligation is satisfied. The majority of the Company’s contracts have a single performance obligation because the promise to transfer individual services is not separately identifiable from other promises in the contracts, and therefore, is not distinct. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The majority of the Company's revenue arrangements are service contracts that range in duration from a few months to several years. Substantially all of the Company’s performance obligations, and associated revenue, are transferred to the customer over time. The Company generally receives compensation based on measuring progress toward completion using anticipated project budgets for direct labor and prices for each service offering. The Company is also reimbursed for certain third party pass-through and out-of-pocket costs. In addition, in certain instances a customer contract may include forms of variable consideration such as incentive fees, volume rebates or other provisions that can increase or decrease the transaction price. This variable consideration is generally awarded upon achievement of certain performance metrics, program milestones or cost targets. For the purposes of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount to be recorded is estimated based on the assessment of the Company’s anticipated performance and consideration of all information that is reasonably available. Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. Most of the Company's contracts can be terminated by the customer without cause with a 30 -day notice. In the event of termination, the Company's contracts generally provide that the customer pay the Company for: (i) fees earned through the termination date; (ii) fees and expenses for winding down the project, which include both fees incurred and actual expenses; (iii) non-cancellable expenditures; and (iv) in some cases, a fee to cover a portion of the remaining professional fees on the project. The Company’s long term clinical trial contracts contain implied substantive termination penalties because of the significant wind-down cost of terminating a clinical trial. These provisions for termination penalties result in these types of contracts being treated as long-term for revenue recognition purposes. Changes in the scope of work are common, especially under long-term contracts, and generally result in a renegotiation of future contract pricing terms and change in contract transaction price. If the customer does not agree to a contract modification, the Company could bear the risk of cost overruns. Most of the Company’s contract modifications are for services that are not distinct from the services under the existing contract due to the significant integration service provided in the context of the contract and therefore result in a cumulative catch-up adjustment to revenue at the date of contract modification. Contract Balances Contract assets include unbilled amounts typically resulting from revenue recognized in excess of the amounts billed to the customer for which the right to payment is subject to factors other than the passage of time. These amounts may not exceed their net realizable value. Contract assets are generally classified as current. Contract liabilities consist of customer payments received in advance of performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period. Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period. Capitalized Costs The Company capitalizes certain costs associated with commissions and bonuses paid to its employees in the Clinical Solutions segment because these costs are incurred in obtaining contracts that have a term greater than one year. The Company amortizes these costs in a manner that is consistent with the pattern of revenue recognition described below. The Company expenses obtainment costs for contracts that have a term of one year or less. Additionally, certain recruiting and training costs within the selling solutions services offering are incurred prior to deployment of the contract field promotion teams that are reimbursed by the customer. These costs are capitalized and amortized ratably from the deployment date through the end of the accounting contract term. Capitalized costs and the related amortization are as follows (in thousands): March 31, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 20,973 Three Months Ended March 31, 2018 Amortization of capitalized costs $ 3,134 Clinical Solutions The Company’s Clinical Solutions segment provides solutions to address the clinical development needs of customers. The Company provides biopharmaceutical program development services through the Full Service Clinical Development (“Full Service”) platform, discrete services for any part of a customer clinical trial through a Functional Service Provider offering, Early Stage services, and Real World and Late Phase services. The services provided via the Full Service platform generally span several years and a significant benefit to the customer is provided by integrating those services provided by the Company’s employees as well as those performed by third parties. As the Company provides a significant benefit to the customer of integrating the services provided by the Full Service offering, there is one performance obligation for revenue recognition purposes. Revenue is recognized over time using an input measure of progress. The input measure reflects costs (including investigator payments and pass-through costs) incurred to date relative to total estimated costs to complete (“cost-to-cost measure of progress”). Under the cost-to-cost measure of progress methodology, revenue is recorded proportionally to costs incurred. Contract costs principally include direct labor, investigator payments, and pass-through costs. The remaining service offerings within the Clinical Solutions segment are generally short-term, month-to-month contracts, time and materials basis contracts, or provide a series of distinct services that are substantially the same and have the same pattern of transfer to the customer (“series”). As such, revenue for these service offerings is generally recognized as services are performed for the amount the Company estimates it is entitled to for the period, similar to the pattern of recognition under ASC 605. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of labor costs expended to total labor costs expected to complete the contract performance obligation. The estimate of total revenue and costs at completion requires significant judgment. Contract estimates are based on various assumptions to project future outcomes of events that often span several years. These estimates are reviewed periodically and any adjustments are recognized on a cumulative catch up basis in the period they become known. Unsatisfied Performance Obligations As of March 31, 2018 , the total aggregate transaction price allocated to the unsatisfied performance obligations under contracts with a contract term greater than one year and which are not accounted for as a series pursuant to ASC 606 was $4.86 billion . This amount includes revenue associated with reimbursable out-of-pocket expenses. The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from one to five years. The amount of unsatisfied performance obligations is presented net of any constraints and as a result, is lower than the potential contractual revenue. Specifically, certain contracts which do not commence within a certain period of time require the Company to undertake numerous activities to fulfill these performance obligations, including various activities that are outside of the Company’s control. Accordingly, such contracts have been excluded from the unsatisfied performance obligations balance presented above. Commercial Solutions The Company’s Commercial Solutions segment provides a broad suite of complementary commercialization services including selling solutions, communications (advertising and public relations), and consulting services. The largest of the service offerings within the Commercial Solutions segment relates to selling solutions. Selling solutions contracts are comprised of a single performance obligation that represents a series of daily outsourced detailing services to promote and sell commercial products on behalf of a customer. The remaining Commercial Solutions contracts are generally short-term, month-to-month contracts or time and materials contracts. As such, Commercial Solutions revenue is generally recognized as services are performed for the amount the Company estimates it is entitled to for the period, similar to the pattern of recognition under ASC 605. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of labor costs expended to total labor costs expected to complete the contract performance obligation. Pass-through and out-of-pocket costs are recognized in service revenue in the unaudited condensed consolidated income statement as incurred. Certain media purchases and the related reimbursements are recorded on a net basis in the unaudited condensed consolidated income statement as such activities are controlled by the customer. The Commercial Solutions segment does not have material unsatisfied performance obligations that are required to be disclosed under ASC 606 because the contracts are short-term in nature or represent a series pursuant to ASC 606. Timing of Billing and Performance Differences in the timing of revenue recognition and associated billings and cash collections result in recording of billed accounts receivable, unbilled accounts receivable, contract assets and contract liabilities on the unaudited condensed consolidated balance sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms either at periodic intervals or upon achievement of contractual milestones. Billings generally occur subsequent to revenue recognition, resulting in recording of: (i) unbilled accounts receivable in instances where the right to bill is contingent solely on the passage of time (e.g., in the following month); and (ii) contract assets in instances where the right to bill is associated with a contingency (e.g., achievement of a milestone). Cash payments received in advance of the Company’s performance result in recording of contract liabilities which are liquidated as revenue is recognized. Contract assets and liabilities are recorded net on a contract-by-contract basis at the end of each reporting period. The changes in contract assets and liabilities balances generally reflect: (i) revenue recognized in the current period from services completed in prior periods, including adjustments attributable to changes in estimates such as estimated total contract costs; (ii) contract modifications on long-term fixed price contracts executed in the current period, which result in changes to the transaction price; and (iii) revenue recognized related to advance billings recorded as of January 1, 2018. Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date, with the impact primarily related to the performance obligations related to the Full Service customer clinical trials in the Clinical Solutions segment. As a result of applying the modified retrospective method to adopt the new accounting guidance, the following adjustments were made to the unaudited condensed consolidated balance sheet as of January 1, 2018 (in thousands): As Reported Adjustments Adjusted December 31, 2017 ASC 606 Adoption January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 321,262 $ — $ 321,262 Restricted cash 714 — 714 Accounts receivable billed, net 642,985 — 642,985 Accounts receivable unbilled 373,003 (152,644 ) 220,359 Contract assets — 94,567 94,567 Prepaid expenses and other current assets 84,215 19,452 103,667 Total current assets 1,422,179 (38,625 ) 1,383,554 Property and equipment, net 180,412 — 180,412 Goodwill 4,292,571 — 4,292,571 Intangible assets, net 1,286,050 — 1,286,050 Deferred income tax assets 20,159 5,857 26,016 Other long-term assets 84,496 12,601 97,097 Total assets $ 7,285,867 $ (20,167 ) $ 7,265,700 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 58,575 $ — $ 58,575 Accrued liabilities 500,303 49,611 549,914 Contract liabilities 559,270 34,075 593,345 Current portion of capital lease obligations 16,414 — 16,414 Current portion of long-term debt 25,000 — 25,000 Total current liabilities 1,159,562 83,686 1,243,248 Capital lease obligations, non-current 20,376 — 20,376 Long-term debt, non-current 2,945,934 — 2,945,934 Deferred income tax liabilities 37,807 (8,355 ) 29,452 Other long-term liabilities 99,609 3,317 102,926 Total liabilities 4,263,288 78,648 4,341,936 Shareholders' equity: Preferred stock — — — Common stock 1,044 — 1,044 Additional paid-in capital 3,414,389 — 3,414,389 Accumulated other comprehensive loss, net of tax (22,385 ) — (22,385 ) Accumulated deficit (370,469 ) (98,815 ) (469,284 ) Total shareholders' equity 3,022,579 (98,815 ) 2,923,764 Total liabilities and shareholders' equity $ 7,285,867 $ (20,167 ) $ 7,265,700 The following table compares the reported unaudited condensed consolidated statement of operations for the three months ended March 31, 2018 to the amounts as if the previous revenue recognition guidance remained in effect for the three months ended March 31, 2018 (in thousands, except per share amounts): Three Months Ended March 31, 2018 ASC 606 ASC 605 Service revenue $ 1,057,196 $ 760,058 Reimbursable out-of-pocket expenses — 310,098 Total revenue 1,057,196 1,070,156 Direct costs (exclusive of depreciation and amortization) 532,057 536,888 Reimbursable out-of-pocket expenses 308,766 310,098 Selling, general, and administrative 99,259 99,716 Restructuring and other costs 13,707 13,707 Transaction and integration-related expenses 25,211 25,211 Depreciation 18,028 18,028 Amortization 49,993 49,993 Total operating expenses 1,047,021 1,053,641 Income from operations 10,175 16,515 Other expense, net: Interest income 839 839 Interest expense (31,736 ) (31,736 ) Loss on extinguishment of debt (248 ) (248 ) Other expense, net (12,554 ) (12,554 ) Total other expense, net (43,699 ) (43,699 ) Loss before provision for income taxes (33,524 ) (27,184 ) Income tax benefit 8,972 8,177 Net loss $ (24,552 ) $ (19,007 ) Loss per share attributable to common shareholders: Basic $ (0.24 ) $ (0.18 ) Diluted $ (0.24 ) $ (0.18 ) Weighted average common shares outstanding: Basic 104,449 104,449 Diluted 104,449 104,449 The following is a summary of the significant changes in the Company’s unaudited condensed consolidated statement of operations as a result of adopting ASC 606 on January 1, 2018, compared to the amounts as if the Company had continued to report its results under ASC 605: • ASC 606 delayed the recognition of revenue principally related to Full Service customer clinical trials in the Company’s Clinical Solutions segment as revenue was previously recognized when contractual items (i.e. “units”) were delivered or on a proportional performance basis, generally using output measures of progress specific to the services provided, such as site or investigator recruitment, patient enrollment and data management. These measures excluded reimbursed investigator payments, other pass-through costs, and out-of-pocket expenses, which were recognized as incurred and presented separately as a component of total revenue in the unaudited condensed consolidated statement of operations. Pursuant to the adoption of ASC 606, the majority of revenue recognized related to Full Service customer clinical trials is accounted for using project costs as an input measure of progress, and includes reimbursable pass-through costs and out-of-pocket expenses. • ASC 606 delayed the recognition of revenue in the Company’s Commercial Solutions segment as certain costs to recruit and train the contract field promotion teams, and revenue for the related reimbursements, are deferred and amortized over the contract term under ASC 606. These amounts were previously recognized as each separate service was delivered to the customer. These delays were partially offset by the acceleration of revenue recognition on certain incentive fee programs that were previously recognized upon customer approval. The following table compares the reported unaudited condensed consolidated balance sheets as of March 31, 2018 to the amounts as if the previous revenue recognition guidance remained in effect as of March 31, 2018 (in thousands): March 31, 2018 ASC 606 ASC 605 ASSETS Current assets: Cash and cash equivalents $ 186,719 $ 186,719 Restricted cash 2,236 2,236 Accounts receivable billed, net 600,796 600,796 Accounts receivable unbilled 392,536 578,043 Contract assets 111,934 — Prepaid expenses and other current assets 94,291 72,981 Total current assets 1,388,512 1,440,775 Property and equipment, net 173,051 173,051 Goodwill 4,306,244 4,306,244 Intangible assets, net 1,241,709 1,241,709 Deferred income tax assets 27,709 21,617 Other long-term assets 104,679 92,402 Total assets $ 7,241,904 $ 7,275,798 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 69,500 $ 69,500 Accrued liabilities 518,383 466,185 Contract liabilities 643,338 617,236 Current portion of capital lease obligations 15,889 15,889 Current portion of long-term debt 31,250 31,250 Total current liabilities 1,278,360 1,200,060 Capital lease obligations, non-current 15,607 15,607 Long-term debt, non-current 2,908,366 2,908,366 Deferred income tax liabilities 22,265 31,536 Other long-term liabilities 110,047 106,500 Total liabilities 4,334,645 4,262,069 Shareholders' equity: Preferred stock — — Common stock 1,038 1,038 Additional paid-in capital 3,394,586 3,394,586 Accumulated other comprehensive income, net of tax 15,822 17,932 Accumulated deficit (504,187 ) (399,827 ) Total shareholders' equity 2,907,259 3,013,729 Total liabilities and shareholders' equity $ 7,241,904 $ 7,275,798 The following is a summary of the significant changes in the Company’s unaudited condensed consolidated balance sheets as a result of adopting ASC 606 on January 1, 2018, compared to the amounts as if the Company had continued to report its results under ASC 605: • The reported assets were less than the total assets that would have been reported had the prior revenue recognition guidance remained in effect. This was largely due to unbilled accounts receivable and contract assets being derecognized on certain Clinical Solutions contracts for which ASC 606 adoption delayed revenue recognition, partially offset by the deferral of certain recruiting and training costs in Commercial Solutions contracts and capitalized sales commissions. The reported liabilities were greater than the total liabilities that would have been reported had the prior revenue recognition guidance remained in effect. This was largely due to advances and deferred revenue in excess of contract assets that are required to be presented net on a contract-by-contract basis. • The adoption of ASC 606 primarily resulted in a revenue recognition delay as of January 1, 2018, which resulted in an increase of the Company’s deferred tax asset position. As the Company records full reserves for its net federal deferred tax assets in the United States, a portion of the impact was offset by a corresponding increase to the valuation allowance against the deferred tax asset position. The adoption of ASC 606 had no net impact on the Company’s cash flows from operations. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information During the third quarter of 2017, the Company realigned its operating segments as a result of the Merger to reflect the current structure under which performance is evaluated, strategic decisions are made and resources are allocated. As a result of this realignment, effective August 1, 2017, the Company began evaluating its financial performance based on two reportable segments: Clinical Solutions and Commercial Solutions. Historical segment reporting has been revised to reflect these changes to the Company’s segment structure. Each reportable business segment is comprised of multiple service offerings that, when combined, create a fully integrated biopharmaceutical solutions organization . Clinical Solutions offers a variety of services spanning Phase I to Phase IV of clinical development , including full-service global studies, as well as individual service offerings such as clinical monitoring, investigator recruitment, patient recruitment, data management, and study startup to assist customers with their drug development process. Commercial Solutions provides commercialization services to the pharmaceutical, biotechnology, and healthcare industries, which include outsourced selling solutions, communication solutions (public relations and advertising), and consulting related services. The Company’s Chief Operating Decision Maker (“CODM”) reviews segment performance and allocates resources based upon segment revenue and income from operations. Beginning in 2018, as a result of the Company’s adoption of ASC 606, revenue and costs for reimbursed out-of-pocket expenses are allocated to the Company’s segments. Prior to 2018, revenue and costs for reimbursed out-of-pocket expenses were not allocated to the Company’s segments. Inter-segment revenue is eliminated from the segment reporting presented to the CODM and is not included in the segment revenue presented in the table below. Certain costs are not allocated to the Company’s reportable segments and are reported as general corporate expenses. These costs primarily consist of share-based compensation and general operating expenses associated with the Company’s senior leadership, finance, Board of Directors, investors relations, and internal audit functions. The Company does not allocate depreciation, amortization, restructuring, or transaction and integration-related costs to its segments. Additionally, the CODM reviews the Company’s assets on a consolidated basis and the Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance or allocating resources. Information about reportable segment operating results is as follows (in thousands): Three Months Ended March 31, 2018 2017 Revenue: Clinical Solutions service revenue $ 786,839 $ 249,497 Commercial Solutions service revenue 270,357 2,581 Total segment service revenue 1,057,196 252,078 Reimbursable out-of-pocket expenses not allocated to segments — 129,840 Total consolidated revenue $ 1,057,196 $ 381,918 Segment direct costs: Clinical Solutions $ 353,893 $ 149,887 Commercial Solutions 174,412 2,235 Total segment direct costs 528,305 152,122 Reimbursable out-of-pocket expenses: Clinical Solutions $ 261,478 $ — Commercial Solutions 47,288 — Total segment reimbursable out-of-pocket expenses 308,766 — Segment selling, general, and administrative expenses: Clinical Solutions $ 65,946 $ 36,790 Commercial Solutions 19,518 — Total segment selling, general, and administrative expenses 85,464 36,790 Segment operating income: Clinical Solutions $ 105,522 $ 62,820 Commercial Solutions 29,139 346 Total segment operating income 134,661 63,166 Operating expenses not allocated to segments: Reimbursable out-of-pocket expenses not allocated to segments $ — $ 129,840 Corporate selling, general, and administrative expenses not allocated to segments 9,759 5,038 Share-based compensation included in direct costs not allocated to segments 3,752 2,713 Share-based compensation included in selling, general, and administrative expenses not allocated to segments 4,036 3,106 Restructuring and other costs 13,707 1,927 Transaction and integration-related expenses 25,211 2 Depreciation and amortization 68,021 15,628 Total consolidated income from operations $ 10,175 $ 34,752 |
Operations by Geographic Locati
Operations by Geographic Location | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Operations by Geographic Location | Operations by Geographic Location The Company conducts its global operations through wholly-owned subsidiaries and representative sales offices. Prior to the Merger, service revenue was attributed to geographical locations based upon the location to which the Company invoiced the end customer. Following the Merger, the Company began to attribute service revenues to geographical locations based upon the location of where the work is performed to reflect its expanded geographic presence and increased scale of operations. All prior periods have been recast to reflect the effect of this change. The following table summarizes information about revenue by geographic area (in thousands and with all intercompany transactions eliminated): Three Months Ended March 31, 2018 2017 Revenue: North America (a) $ 731,766 $ 142,759 Europe, Middle East, and Africa 228,837 80,012 Asia-Pacific 77,980 20,209 Latin America 18,613 9,098 Total service revenue 1,057,196 252,078 Reimbursable-out-of-pocket expenses — 129,840 Total revenue $ 1,057,196 $ 381,918 (a) Service revenue for the North America region includes revenue attributable to the United States of $696.4 million and $136.3 million , or 65.9% and 54.1% of service revenue, for the three months ended March 31, 2018 and March 31, 2017 , respectively. No other country represented more than 10% of service revenue for any period. Long-lived assets by geographic area for each period were as follows (in thousands and all intercompany transactions have been eliminated): March 31, 2018 December 31, 2017 Property and equipment, net: North America (a) $ 127,171 $ 136,101 Europe, Middle East and Africa 27,733 25,517 Asia-Pacific 13,879 14,700 Latin America 4,268 4,094 Total property and equipment, net $ 173,051 $ 180,412 (a) Long-lived assets for the North America region include property and equipment, net attributable to the United States of $120.4 million and $128.5 million as of March 31, 2018 and December 31, 2017 , respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash depository accounts with several financial institutions worldwide and is exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents are concentrated. The Company has not historically incurred any losses with respect to these balances and believes that they bear minimal credit risk. As of March 31, 2018 , the amount of cash and cash equivalents held outside the United States by the Company’s foreign subsidiaries was $62.1 million , or 33% of the total consolidated cash and cash equivalents balance. As of December 31, 2017 , the amount of cash and cash equivalents held outside the United States by the Company’s foreign subsidiaries was $192.0 million , or 60% of the total consolidated cash and cash equivalents balance. During the three months ended March 31, 2018 , one customer accounted for approximately 11% of the Company’s total consolidated service revenue (including reimbursable out-of-pocket expenses as a result of the adoption of ASC 606 described in “Note 10 - Revenue from Contracts with Customers ”). No single customer accounted for greater than 10% of the Company’s total consolidated service revenue for the three months ended March 31, 2017 . As of March 31, 2018 and December 31, 2017 , one customer accounted for approximately 13% of the Company’s billed accounts receivable, unbilled accounts receivable, and contract assets balances. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions For the three months ended March 31, 2018 , the Company incurred reimbursable out-of-pocket expenses of $0.2 million for professional services obtained from a provider whose significant shareholder was also a significant shareholder of the Company. No related-party revenue was recorded for the three months ended March 31, 2018 . There were no related party transactions for the three months ended March 31, 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Through the Merger, the Company became a party to a lawsuit initiated and outstanding against inVentiv prior to the Merger. On October 31, 2013, Cel-Sci Corporation (“Claimant”) made a demand for arbitration under a Master Services Agreement (the “MSA”), dated as of April 6, 2010 between Claimant and two of the Company’s subsidiaries, inVentiv Health Clinical, LLC (formerly known as PharmaNet, LLC) and PharmaNet GmbH (currently known as inVentiv Health Switzerland GmbH and formerly known as PharmaNet AG) (collectively, “PharmaNet”). Under the MSA and related project agreement, which were terminated by Claimant in April 2013, Claimant engaged PharmaNet in connection with a Phase III Clinical Trial of its investigational drug. The arbitration claim alleges (i) breach of contract, (ii) fraud in the inducement, and (iii) common law fraud on the part of PharmaNet, and seeks damages of at least $50.0 million . In December 2013, inVentiv Health Clinical, LLC filed a counterclaim against Claimant that alleges breach of contract and seeks at least $2.0 million in damages. The matter proceeded to the discovery phase. In January 2015, inVentiv Health Clinical, LLC filed additional counterclaims against Claimant that allege (i) breach of contract, (ii) opportunistic breach, restitution and unjust enrichment, and (iii) defamation, and seek at least $2.0 million in damages and $20.0 million in other equitable remedies. The arbitration hearings have completed, and the parties are now awaiting a decision by the arbitrator. The Company continues to maintain its position in this matter. In the Company’s opinion, the ultimate outcome of this matter, net of liabilities accrued on the Company’s balance sheet, is not expected to have a material effect on the Company’s financial position, results of operations, or cash flows. Self-Insurance Reserves The Company is self-insured for certain losses relating to health insurance claims for the majority of its employees located within the United States. Additionally, the Company maintains certain self-insurance retention limits related to automobile and workers’ compensation insurance. As of March 31, 2018 and December 31, 2017 , the total accrual for self-insurance reserves was $20.8 million and $16.6 million , respectively. Assumed Contingent Tax-Sharing Obligations As a result of the Merger, the Company assumed contingent tax-sharing obligations arising from inVentiv’s 2016 merger with Double Eagle Parent, Inc. As of March 31, 2018 and December 31, 2017 , the estimated fair value of the assumed contingent tax-sharing obligations was $51.7 million and $50.5 million , respectively. For additional information regarding the assumed contingent tax-sharing obligations, refer to “Note 3 - Business Combinations .” |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Repricing Amendment to Credit Agreement On May 4, 2018 , the Company entered into Amendment No. 1 (the “Repricing Amendment”) to the Credit Agreement dated August 1, 2017 (the “Credit Agreement”), among the Company; the lenders party thereto; Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as Administrative Agent; and each of the other parties thereto. The Repricing Amendment, among other things, modifies the terms of the Credit Agreement to: (1) reduce by 0.25% overall the applicable margins for alternate base rate (“ABR”) loans and Adjusted Eurocurrency Rate loans with respect to both Term Loan A and Term Loan B, resulting in: (i) for Term Loan A, a margin spread of (a) 0.25% to 0.50% for ABR loans and (b) 1.25% to 1.50% for Adjusted Eurocurrency Rate loans (with the specific applicable margins determined by reference to the First Lien Leverage Ratio), and (ii) for Term Loan B, a margin spread of (a) 0.75% to 1.00% for ABR loans and (b) 1.75% to 2.00% for Adjusted Eurocurrency Rate loans (with the specific applicable margins determined by reference to the Secured Leverage Ratio as modified so that the higher rate applies when the Secured Leverage Ratio is greater than 2.75 to 1.00); and (2) reset the period in which a prepayment premium with respect to Term Loan B is required for a “Repricing Transaction” (as defined in the Credit Agreement) to six months after the closing date of the Repricing Amendment. In connection with the execution of the Repricing Amendment, the Company paid certain fees and expenses to Credit Suisse and ING Capital LLC, as lead arrangers. As of May 4, 2018 , $1.53 billion of Term Loan B principal were outstanding and $987.5 million of the Term Loan A principal was outstanding. |
Basis of Presentation and Cha24
Basis of Presentation and Changes in Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The Company prepared the accompanying unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. The unaudited condensed consolidated financial statements, in management’s opinion, include all adjustments of a normal recurring nature necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 28, 2018 . The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018 or any other future period. The unaudited condensed consolidated balance sheet at December 31, 2017 is derived from the amounts in the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards Revenue from Contracts with Customers. The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the three months ended March 31, 2018 reflect the application of ASC 606, while the reported results for the three months ended March 31, 2017 were prepared under ASC 605, Revenue Recognition (“ASC 605”). For additional information related to the impact of adopting this standard, see “Note 10 - Revenue from Contracts with Customers .” Statement of Cash Flows - Restricted Cash. Effective January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash using the retrospective transition method, as required by the new standard. The adoption of this ASU had an immaterial impact to the Company’s unaudited condensed consolidated statements of cash flows. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets at March 31, 2018 and December 31, 2017 , that sum to the total of such amounts in the consolidated statements of cash flows (in thousands): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 186,719 $ 321,262 Restricted cash 2,236 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 188,955 $ 321,976 Comprehensive Income - Reclassifications of Certain Tax Effects. Effective January 1, 2018, the Company elected to early adopt ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . Under the updated accounting guidance, the Company is allowed to reclassify the stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate resulting from the Tax Cuts and Jobs Act (“Tax Act”) is recorded. Upon adoption, the Company recorded an increase to other comprehensive income of $3.9 million and a reduction in retained earnings of $3.9 million . There was no impact on prior periods. Recently Issued Accounting Standards Not Yet Adopted Leases. In February 2016, the Financial Accounting Standards board (“FASB”) issued ASU No. 2016-02, Leases . ASU 2016-02 requires organizations to recognize lease assets and lease liabilities on the balance sheet, including leases that were previously classified as operating leases. The ASU also requires additional disclosures about leasing arrangements related to the amount, timing, and uncertainty of cash flows arising from leases. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments is permitted and the new guidance will be applied using a modified retrospective approach. The Company plans to adopt the standard on January 1, 2019 and is currently assessing the potential impact of this standard on its consolidated financial statements. |
Revenue from Contracts with Customers | Service Revenue The Company adopted ASC 606 - Revenue from Contracts with Customers and all the related amendments (“new revenue standard” or “ASC 606”) on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for the three months ended March 31, 2018 reflect the application of ASC 606, while the reported results for the three months ended March 31, 2017 were prepared under ASC 605 - Revenue Recognition and other authoritative guidance in effect for this period. In accordance with ASC 606, revenue is now recognized when, or as, a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. A performance obligation is a promise (or a combination of promises) in a contract to transfer distinct goods or services to a customer and is the unit of accounting under ASC 606 for the purposes of revenue recognition. A contract’s transaction price is allocated to each separate performance obligation based upon the standalone selling price and is recognized as revenue, when, or as, the performance obligation is satisfied. The majority of the Company’s contracts have a single performance obligation because the promise to transfer individual services is not separately identifiable from other promises in the contracts, and therefore, is not distinct. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The majority of the Company's revenue arrangements are service contracts that range in duration from a few months to several years. Substantially all of the Company’s performance obligations, and associated revenue, are transferred to the customer over time. The Company generally receives compensation based on measuring progress toward completion using anticipated project budgets for direct labor and prices for each service offering. The Company is also reimbursed for certain third party pass-through and out-of-pocket costs. In addition, in certain instances a customer contract may include forms of variable consideration such as incentive fees, volume rebates or other provisions that can increase or decrease the transaction price. This variable consideration is generally awarded upon achievement of certain performance metrics, program milestones or cost targets. For the purposes of revenue recognition, variable consideration is assessed on a contract-by-contract basis and the amount to be recorded is estimated based on the assessment of the Company’s anticipated performance and consideration of all information that is reasonably available. Variable consideration is recognized as revenue if and when it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved in the future. Most of the Company's contracts can be terminated by the customer without cause with a 30 -day notice. In the event of termination, the Company's contracts generally provide that the customer pay the Company for: (i) fees earned through the termination date; (ii) fees and expenses for winding down the project, which include both fees incurred and actual expenses; (iii) non-cancellable expenditures; and (iv) in some cases, a fee to cover a portion of the remaining professional fees on the project. The Company’s long term clinical trial contracts contain implied substantive termination penalties because of the significant wind-down cost of terminating a clinical trial. These provisions for termination penalties result in these types of contracts being treated as long-term for revenue recognition purposes. Changes in the scope of work are common, especially under long-term contracts, and generally result in a renegotiation of future contract pricing terms and change in contract transaction price. If the customer does not agree to a contract modification, the Company could bear the risk of cost overruns. Most of the Company’s contract modifications are for services that are not distinct from the services under the existing contract due to the significant integration service provided in the context of the contract and therefore result in a cumulative catch-up adjustment to revenue at the date of contract modification. Contract Balances Contract assets include unbilled amounts typically resulting from revenue recognized in excess of the amounts billed to the customer for which the right to payment is subject to factors other than the passage of time. These amounts may not exceed their net realizable value. Contract assets are generally classified as current. Contract liabilities consist of customer payments received in advance of performance and billings in excess of revenue recognized, net of revenue recognized from the balance at the beginning of the period. Contract assets and liabilities are presented on the balance sheet on a net contract-by-contract basis at the end of each reporting period. Capitalized Costs The Company capitalizes certain costs associated with commissions and bonuses paid to its employees in the Clinical Solutions segment because these costs are incurred in obtaining contracts that have a term greater than one year. The Company amortizes these costs in a manner that is consistent with the pattern of revenue recognition described below. The Company expenses obtainment costs for contracts that have a term of one year or less. Additionally, certain recruiting and training costs within the selling solutions services offering are incurred prior to deployment of the contract field promotion teams that are reimbursed by the customer. These costs are capitalized and amortized ratably from the deployment date through the end of the accounting contract term. Capitalized costs and the related amortization are as follows (in thousands): March 31, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 20,973 Three Months Ended March 31, 2018 Amortization of capitalized costs $ 3,134 Clinical Solutions The Company’s Clinical Solutions segment provides solutions to address the clinical development needs of customers. The Company provides biopharmaceutical program development services through the Full Service Clinical Development (“Full Service”) platform, discrete services for any part of a customer clinical trial through a Functional Service Provider offering, Early Stage services, and Real World and Late Phase services. The services provided via the Full Service platform generally span several years and a significant benefit to the customer is provided by integrating those services provided by the Company’s employees as well as those performed by third parties. As the Company provides a significant benefit to the customer of integrating the services provided by the Full Service offering, there is one performance obligation for revenue recognition purposes. Revenue is recognized over time using an input measure of progress. The input measure reflects costs (including investigator payments and pass-through costs) incurred to date relative to total estimated costs to complete (“cost-to-cost measure of progress”). Under the cost-to-cost measure of progress methodology, revenue is recorded proportionally to costs incurred. Contract costs principally include direct labor, investigator payments, and pass-through costs. The remaining service offerings within the Clinical Solutions segment are generally short-term, month-to-month contracts, time and materials basis contracts, or provide a series of distinct services that are substantially the same and have the same pattern of transfer to the customer (“series”). As such, revenue for these service offerings is generally recognized as services are performed for the amount the Company estimates it is entitled to for the period, similar to the pattern of recognition under ASC 605. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of labor costs expended to total labor costs expected to complete the contract performance obligation. The estimate of total revenue and costs at completion requires significant judgment. Contract estimates are based on various assumptions to project future outcomes of events that often span several years. These estimates are reviewed periodically and any adjustments are recognized on a cumulative catch up basis in the period they become known. Unsatisfied Performance Obligations As of March 31, 2018 , the total aggregate transaction price allocated to the unsatisfied performance obligations under contracts with a contract term greater than one year and which are not accounted for as a series pursuant to ASC 606 was $4.86 billion . This amount includes revenue associated with reimbursable out-of-pocket expenses. The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from one to five years. The amount of unsatisfied performance obligations is presented net of any constraints and as a result, is lower than the potential contractual revenue. Specifically, certain contracts which do not commence within a certain period of time require the Company to undertake numerous activities to fulfill these performance obligations, including various activities that are outside of the Company’s control. Accordingly, such contracts have been excluded from the unsatisfied performance obligations balance presented above. Commercial Solutions The Company’s Commercial Solutions segment provides a broad suite of complementary commercialization services including selling solutions, communications (advertising and public relations), and consulting services. The largest of the service offerings within the Commercial Solutions segment relates to selling solutions. Selling solutions contracts are comprised of a single performance obligation that represents a series of daily outsourced detailing services to promote and sell commercial products on behalf of a customer. The remaining Commercial Solutions contracts are generally short-term, month-to-month contracts or time and materials contracts. As such, Commercial Solutions revenue is generally recognized as services are performed for the amount the Company estimates it is entitled to for the period, similar to the pattern of recognition under ASC 605. For contracts billed on a fixed price basis, revenue is recognized over time based on the proportion of labor costs expended to total labor costs expected to complete the contract performance obligation. Pass-through and out-of-pocket costs are recognized in service revenue in the unaudited condensed consolidated income statement as incurred. Certain media purchases and the related reimbursements are recorded on a net basis in the unaudited condensed consolidated income statement as such activities are controlled by the customer. The Commercial Solutions segment does not have material unsatisfied performance obligations that are required to be disclosed under ASC 606 because the contracts are short-term in nature or represent a series pursuant to ASC 606. Timing of Billing and Performance Differences in the timing of revenue recognition and associated billings and cash collections result in recording of billed accounts receivable, unbilled accounts receivable, contract assets and contract liabilities on the unaudited condensed consolidated balance sheet. Amounts are billed as work progresses in accordance with agreed-upon contractual terms either at periodic intervals or upon achievement of contractual milestones. Billings generally occur subsequent to revenue recognition, resulting in recording of: (i) unbilled accounts receivable in instances where the right to bill is contingent solely on the passage of time (e.g., in the following month); and (ii) contract assets in instances where the right to bill is associated with a contingency (e.g., achievement of a milestone). Cash payments received in advance of the Company’s performance result in recording of contract liabilities which are liquidated as revenue is recognized. Contract assets and liabilities are recorded net on a contract-by-contract basis at the end of each reporting period. The changes in contract assets and liabilities balances generally reflect: (i) revenue recognized in the current period from services completed in prior periods, including adjustments attributable to changes in estimates such as estimated total contract costs; (ii) contract modifications on long-term fixed price contracts executed in the current period, which result in changes to the transaction price; and (iii) revenue recognized related to advance billings recorded as of January 1, 2018. |
Basis of Presentation and Cha25
Basis of Presentation and Changes in Significant Accounting Policies Basis of Presentation and Changes in Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Cash and cash equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets at March 31, 2018 and December 31, 2017 , that sum to the total of such amounts in the consolidated statements of cash flows (in thousands): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 186,719 $ 321,262 Restricted cash 2,236 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 188,955 $ 321,976 |
Restricted cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets at March 31, 2018 and December 31, 2017 , that sum to the total of such amounts in the consolidated statements of cash flows (in thousands): March 31, 2018 December 31, 2017 Cash and cash equivalents $ 186,719 $ 321,262 Restricted cash 2,236 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 188,955 $ 321,976 |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash Pool Position | The Company’s net cash pool position consisted of the following (in thousands): March 31, 2018 December 31, 2017 Gross cash position $ 145,210 $ 195,376 Less: cash borrowings (128,578 ) (88,226 ) Net cash position $ 16,632 $ 107,150 |
Schedule of Billed Accounts Receivable, Net | Billed accounts receivable, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accounts receivable billed $ 610,333 $ 652,061 Allowance for doubtful accounts (9,537 ) (9,076 ) Accounts receivable billed, net $ 600,796 $ 642,985 |
Schedule of Goodwill | Changes in the carrying amount of goodwill by segment for the three months ended March 31, 2018 were as follows (in thousands): Total Clinical Commercial Balance at December 31, 2017: Gross carrying amount $ 4,308,737 $ 2,808,975 $ 1,499,762 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses 4,292,571 2,800,833 1,491,738 2018 Activity: Business combinations (b) (4,214 ) (2,529 ) (1,685 ) Impact of foreign currency translation 17,887 11,927 5,960 Balance at March 31, 2018: Gross carrying amount 4,322,410 2,818,373 1,504,037 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses $ 4,306,244 $ 2,810,231 $ 1,496,013 (a) Accumulated impairment losses associated with the Clinical Solutions segment were recorded in fiscal periods prior to 2018 and related to the former Phase I Services segment, now a component of the Clinical Solutions segment. Accumulated impairment losses associated with the Commercial Solutions segment were recorded in fiscal periods prior to 2018 and related to the former Global Consulting segment, now a component of the Commercial Solutions segment. No impairment of goodwill was recorded for the three months ended March 31, 2018 . (b) Amount represents measurement period adjustments to goodwill recognized in connection with the Merger. Goodwill associated with the Merger is not deductible for income tax purposes. See “Note 3 - Business Combinations” for further information. |
Schedule of Accumulated Other Comprehensive Loss, Net of Taxes | Accumulated other comprehensive income (loss), net of tax, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Foreign currency translation adjustments, net of tax $ 14,003 $ (23,514 ) Unrealized gains on derivative instruments, net of tax 1,819 1,129 Accumulated other comprehensive income (loss), net of tax $ 15,822 $ (22,385 ) Changes in accumulated other comprehensive income (loss), net of tax for the three months ended March 31, 2018 were as follows (in thousands): Unrealized gain on derivative instruments, net of tax Foreign currency translation adjustments, net of tax Total Balance at December 31, 2017 $ 1,129 $ (23,514 ) $ (22,385 ) Reclassification of income tax benefit due to adoption of ASU 2018-02 256 3,594 3,850 Balance at January 1, 2018 1,385 (19,920 ) (18,535 ) Other comprehensive gain before reclassifications 711 33,923 34,634 Amount of gain reclassified from accumulated other comprehensive income (loss) into the statements of operations (277 ) — (277 ) Net current period other comprehensive gain, net of tax 434 33,923 34,357 Balance at March 31, 2018 $ 1,819 $ 14,003 $ 15,822 |
Reclassification out of Accumulated Other Comprehensive Loss | The tax effects allocated to each component of other comprehensive income for the three months ended March 31, 2018 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 36,791 $ (2,868 ) $ 33,923 Unrealized gain on derivative instruments: Unrealized gains arising during period 711 — 711 Reclassification adjustment of realized gains to net income (277 ) — (277 ) Net unrealized gain 434 — 434 Other comprehensive income $ 37,225 $ (2,868 ) $ 34,357 The tax effects allocated to each component of other comprehensive income for the three months ended March 31, 2017 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 4,846 $ — $ 4,846 Unrealized gain on derivative instruments: Unrealized gains arising during the period 305 (112 ) 193 Reclassification adjustment of realized gains to net income (68 ) 25 (43 ) Net unrealized gain 237 (87 ) 150 Other comprehensive income $ 5,083 $ (87 ) $ 4,996 |
Schedule of Other Expense, Net | Other expense, net consisted of the following (in thousands): Three Months Ended March 31, 2018 2017 Net realized foreign currency loss $ (5,517 ) $ (670 ) Net unrealized foreign currency loss (6,364 ) (2,707 ) Other, net (673 ) (80 ) Total other expense, net $ (12,554 ) $ (3,457 ) |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Allocation of Consideration Transferred | The following table summarizes the preliminary allocation of the consideration transferred based on management’s estimates of Merger Date fair values of assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill (in thousands): March 31, 2018 Assets acquired: Cash and cash equivalents $ 57,338 Restricted cash 433 Accounts receivable 367,169 Unbilled accounts receivable 261,585 Other current assets 95,506 Property and equipment 113,674 Intangible assets 1,334,200 Other assets 50,052 Total assets acquired 2,279,957 Liabilities assumed: Accounts payable 38,072 Accrued liabilities 306,649 Contract liabilities 247,474 Capital leases 40,928 Long-term debt, current and non-current 737,872 Deferred income taxes, net 11,382 Other liabilities 121,238 Total liabilities assumed 1,503,615 Total identifiable assets acquired, net 776,342 Goodwill $ 3,729,281 |
Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information was derived from the historical financial statements of the Company and inVentiv and presents the combined results of operations as if the Merger had occurred on January 1, 2016. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results that would have actually occurred had the Merger been completed on January 1, 2016. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may result from the Merger, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of inVentiv. Consequently, actual future results of the Company will differ from the unaudited pro forma financial information presented. Three Months Ended March 31, 2017 (In thousands, except per share data) Pro forma total revenue $ 1,064,963 Pro forma net income 3,119 Pro forma income per share: Basic $ 0.03 Diluted $ 0.03 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | As of March 31, 2018 , the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Total Assets: Trading securities $ 16,137 $ — $ — $ 16,137 Derivative instruments — 2,601 — 2,601 Total assets $ 16,137 $ 2,601 $ — $ 18,738 Liabilities: Contingent tax-sharing obligation assumed through business combinations $ — $ — $ 51,674 $ 51,674 Total liabilities $ — $ — $ 51,674 $ 51,674 As of December 31, 2017 , the fair values of the major classes of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): Level 1 Level 2 Level 3 Total Assets: Trading securities $ 16,318 $ — $ — $ 16,318 Derivative instruments — 2,179 — 2,179 Total assets $ 16,318 $ 2,179 $ — $ 18,497 Liabilities: Contingent tax-sharing obligation assumed through business combinations $ — $ — $ 50,480 $ 50,480 Total liabilities $ — $ — $ 50,480 $ 50,480 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents changes in the carrying amount of contingent tax-sharing obligations classified as Level 3 category within the fair value hierarchy for the three months ended March 31, 2018 (in thousands): Balance at December 31, 2017 $ 50,480 Changes in fair value recognized in earnings 1,194 Payments — Balance at March 31, 2018 $ 51,674 |
Schedule of Estimated Fair Value of Financial Instruments Not Recorded at Fair Value | The estimated fair values of the Company’s outstanding term loans and Senior Unsecured Notes were as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Term Loan A due August 2022 $ 993,750 $ 993,750 $ 1,000,000 $ 1,000,000 Term Loan B due August 2024 (net of original issue debt discount) 1,523,261 1,525,000 1,548,149 1,550,000 7.5% Senior Unsecured Notes due 2024 (inclusive of unamortized premium) 442,092 433,225 443,507 433,729 |
Restructuring and Other Costs (
Restructuring and Other Costs (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes activity related to the liabilities associated with restructuring and other costs during the three months ended March 31, 2018 (in thousands): Employee Severance Costs, Including Executive Transition Costs Facility Closure and Lease Termination Costs Other Costs Total Balance at December 31, 2017 $ 8,858 $ 7,411 $ 524 $ 16,793 Expenses incurred (a) 8,572 1,303 1,801 11,676 Cash payments made (9,511 ) (1,697 ) (1,683 ) (12,891 ) Balance at March 31, 2018 $ 7,919 $ 7,017 $ 642 $ 15,578 (a) The amount of expenses incurred presented in the reconciliation of accrued restructuring liabilities excludes $2.0 million of non-cash restructuring and other expenses incurred for the three months ended March 31, 2018 as these expenses were not subject to accrual prior to the period in which they were incurred. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Units Activity | The following table summarizes the RSU activity during the three months ended March 31, 2018 : Number of Shares Weighted Average Non-vested at December 31, 2017 907,580 $ 49.30 Granted 1,798,554 $ 38.22 Vested (172,277 ) $ 49.39 Forfeited (4,387 ) $ 39.68 Non-vested at March 31, 2018 2,529,470 $ 41.44 |
Summary of Share-Based Compensation Expense Recognized in Statements of Operations | The total amount of share-based compensation expense recognized in the unaudited condensed consolidated statements of operations was as follows (in thousands): Three Months Ended March 31, Statement of Operations Classification 2018 2017 Direct costs $ 3,752 $ 2,713 Selling, general, and administrative expenses 4,036 3,106 Restructuring and other costs 91 — Total share-based compensation expense $ 7,879 $ 5,819 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerators and denominators of the basic and diluted per share computations of weighted average common shares outstanding based on the Company’s consolidated net (loss) income is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 2017 Numerator: Net (loss) income $ (24,552 ) $ 21,187 Denominator: Basic weighted average common shares outstanding 104,449 54,015 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — 1,108 Diluted weighted average common shares outstanding 104,449 55,123 (Loss) earnings per share: Basic $ (0.24 ) $ 0.39 Diluted $ (0.24 ) $ 0.38 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potential shares outstanding that were considered antidilutive using the treasury stock method and therefore excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding are as follows (in thousands): Three Months Ended March 31, 2018 2017 Anti-dilutive stock options and other awards 1,097 908 Anti-dilutive stock options and other awards under deferred share-based compensation programs excluded based on reporting of net loss for the period 898 — Total common stock equivalents excluded from diluted earnings per share computation 1,995 908 |
Revenue from Contracts with C32
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Capitalized costs and the related amortization | Capitalized costs and the related amortization are as follows (in thousands): March 31, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 20,973 Three Months Ended March 31, 2018 Amortization of capitalized costs $ 3,134 |
Result of applying modified retrospective method to adopt new accounting guidance | As a result of applying the modified retrospective method to adopt the new accounting guidance, the following adjustments were made to the unaudited condensed consolidated balance sheet as of January 1, 2018 (in thousands): As Reported Adjustments Adjusted December 31, 2017 ASC 606 Adoption January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 321,262 $ — $ 321,262 Restricted cash 714 — 714 Accounts receivable billed, net 642,985 — 642,985 Accounts receivable unbilled 373,003 (152,644 ) 220,359 Contract assets — 94,567 94,567 Prepaid expenses and other current assets 84,215 19,452 103,667 Total current assets 1,422,179 (38,625 ) 1,383,554 Property and equipment, net 180,412 — 180,412 Goodwill 4,292,571 — 4,292,571 Intangible assets, net 1,286,050 — 1,286,050 Deferred income tax assets 20,159 5,857 26,016 Other long-term assets 84,496 12,601 97,097 Total assets $ 7,285,867 $ (20,167 ) $ 7,265,700 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 58,575 $ — $ 58,575 Accrued liabilities 500,303 49,611 549,914 Contract liabilities 559,270 34,075 593,345 Current portion of capital lease obligations 16,414 — 16,414 Current portion of long-term debt 25,000 — 25,000 Total current liabilities 1,159,562 83,686 1,243,248 Capital lease obligations, non-current 20,376 — 20,376 Long-term debt, non-current 2,945,934 — 2,945,934 Deferred income tax liabilities 37,807 (8,355 ) 29,452 Other long-term liabilities 99,609 3,317 102,926 Total liabilities 4,263,288 78,648 4,341,936 Shareholders' equity: Preferred stock — — — Common stock 1,044 — 1,044 Additional paid-in capital 3,414,389 — 3,414,389 Accumulated other comprehensive loss, net of tax (22,385 ) — (22,385 ) Accumulated deficit (370,469 ) (98,815 ) (469,284 ) Total shareholders' equity 3,022,579 (98,815 ) 2,923,764 Total liabilities and shareholders' equity $ 7,285,867 $ (20,167 ) $ 7,265,700 The following table compares the reported unaudited condensed consolidated statement of operations for the three months ended March 31, 2018 to the amounts as if the previous revenue recognition guidance remained in effect for the three months ended March 31, 2018 (in thousands, except per share amounts): Three Months Ended March 31, 2018 ASC 606 ASC 605 Service revenue $ 1,057,196 $ 760,058 Reimbursable out-of-pocket expenses — 310,098 Total revenue 1,057,196 1,070,156 Direct costs (exclusive of depreciation and amortization) 532,057 536,888 Reimbursable out-of-pocket expenses 308,766 310,098 Selling, general, and administrative 99,259 99,716 Restructuring and other costs 13,707 13,707 Transaction and integration-related expenses 25,211 25,211 Depreciation 18,028 18,028 Amortization 49,993 49,993 Total operating expenses 1,047,021 1,053,641 Income from operations 10,175 16,515 Other expense, net: Interest income 839 839 Interest expense (31,736 ) (31,736 ) Loss on extinguishment of debt (248 ) (248 ) Other expense, net (12,554 ) (12,554 ) Total other expense, net (43,699 ) (43,699 ) Loss before provision for income taxes (33,524 ) (27,184 ) Income tax benefit 8,972 8,177 Net loss $ (24,552 ) $ (19,007 ) Loss per share attributable to common shareholders: Basic $ (0.24 ) $ (0.18 ) Diluted $ (0.24 ) $ (0.18 ) Weighted average common shares outstanding: Basic 104,449 104,449 Diluted 104,449 104,449 The following table compares the reported unaudited condensed consolidated balance sheets as of March 31, 2018 to the amounts as if the previous revenue recognition guidance remained in effect as of March 31, 2018 (in thousands): March 31, 2018 ASC 606 ASC 605 ASSETS Current assets: Cash and cash equivalents $ 186,719 $ 186,719 Restricted cash 2,236 2,236 Accounts receivable billed, net 600,796 600,796 Accounts receivable unbilled 392,536 578,043 Contract assets 111,934 — Prepaid expenses and other current assets 94,291 72,981 Total current assets 1,388,512 1,440,775 Property and equipment, net 173,051 173,051 Goodwill 4,306,244 4,306,244 Intangible assets, net 1,241,709 1,241,709 Deferred income tax assets 27,709 21,617 Other long-term assets 104,679 92,402 Total assets $ 7,241,904 $ 7,275,798 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 69,500 $ 69,500 Accrued liabilities 518,383 466,185 Contract liabilities 643,338 617,236 Current portion of capital lease obligations 15,889 15,889 Current portion of long-term debt 31,250 31,250 Total current liabilities 1,278,360 1,200,060 Capital lease obligations, non-current 15,607 15,607 Long-term debt, non-current 2,908,366 2,908,366 Deferred income tax liabilities 22,265 31,536 Other long-term liabilities 110,047 106,500 Total liabilities 4,334,645 4,262,069 Shareholders' equity: Preferred stock — — Common stock 1,038 1,038 Additional paid-in capital 3,394,586 3,394,586 Accumulated other comprehensive income, net of tax 15,822 17,932 Accumulated deficit (504,187 ) (399,827 ) Total shareholders' equity 2,907,259 3,013,729 Total liabilities and shareholders' equity $ 7,241,904 $ 7,275,798 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Information about reportable segment operating results is as follows (in thousands): Three Months Ended March 31, 2018 2017 Revenue: Clinical Solutions service revenue $ 786,839 $ 249,497 Commercial Solutions service revenue 270,357 2,581 Total segment service revenue 1,057,196 252,078 Reimbursable out-of-pocket expenses not allocated to segments — 129,840 Total consolidated revenue $ 1,057,196 $ 381,918 Segment direct costs: Clinical Solutions $ 353,893 $ 149,887 Commercial Solutions 174,412 2,235 Total segment direct costs 528,305 152,122 Reimbursable out-of-pocket expenses: Clinical Solutions $ 261,478 $ — Commercial Solutions 47,288 — Total segment reimbursable out-of-pocket expenses 308,766 — Segment selling, general, and administrative expenses: Clinical Solutions $ 65,946 $ 36,790 Commercial Solutions 19,518 — Total segment selling, general, and administrative expenses 85,464 36,790 Segment operating income: Clinical Solutions $ 105,522 $ 62,820 Commercial Solutions 29,139 346 Total segment operating income 134,661 63,166 Operating expenses not allocated to segments: Reimbursable out-of-pocket expenses not allocated to segments $ — $ 129,840 Corporate selling, general, and administrative expenses not allocated to segments 9,759 5,038 Share-based compensation included in direct costs not allocated to segments 3,752 2,713 Share-based compensation included in selling, general, and administrative expenses not allocated to segments 4,036 3,106 Restructuring and other costs 13,707 1,927 Transaction and integration-related expenses 25,211 2 Depreciation and amortization 68,021 15,628 Total consolidated income from operations $ 10,175 $ 34,752 |
Operations by Geographic Loca34
Operations by Geographic Location (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Total Revenue by Geographic Area | The following table summarizes information about revenue by geographic area (in thousands and with all intercompany transactions eliminated): Three Months Ended March 31, 2018 2017 Revenue: North America (a) $ 731,766 $ 142,759 Europe, Middle East, and Africa 228,837 80,012 Asia-Pacific 77,980 20,209 Latin America 18,613 9,098 Total service revenue 1,057,196 252,078 Reimbursable-out-of-pocket expenses — 129,840 Total revenue $ 1,057,196 $ 381,918 (a) Service revenue for the North America region includes revenue attributable to the United States of $696.4 million and $136.3 million , or 65.9% and 54.1% of service revenue, for the three months ended March 31, 2018 and March 31, 2017 , respectively. No other country represented more than 10% of service revenue for any period. |
Long-Lived Assets by Geographic Area | Long-lived assets by geographic area for each period were as follows (in thousands and all intercompany transactions have been eliminated): March 31, 2018 December 31, 2017 Property and equipment, net: North America (a) $ 127,171 $ 136,101 Europe, Middle East and Africa 27,733 25,517 Asia-Pacific 13,879 14,700 Latin America 4,268 4,094 Total property and equipment, net $ 173,051 $ 180,412 (a) Long-lived assets for the North America region include property and equipment, net attributable to the United States of $120.4 million and $128.5 million as of March 31, 2018 and December 31, 2017 , respectively. |
Basis of Presentation and Cha35
Basis of Presentation and Changes in Significant Accounting Policies - Narrative (Details) $ in Millions | Jan. 01, 2018USD ($) | Mar. 31, 2018segment |
Accounting Policies [Abstract] | ||
Number of reportable segments | segment | 2 | |
AOCI Attributable to Parent [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of income tax benefit due to adoption of ASU 2018-02 | $ 3.9 | |
Retained Earnings [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of income tax benefit due to adoption of ASU 2018-02 | $ (3.9) |
Basis of Presentation and Cha36
Basis of Presentation and Changes in Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||||
Cash and cash equivalents | $ 186,719 | $ 321,262 | $ 321,262 | ||
Restricted cash | 2,236 | $ 714 | 714 | ||
Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 188,955 | $ 321,976 | $ 165,040 | $ 103,078 |
Financial Statement Details - N
Financial Statement Details - Net Cash Pool Position (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gross cash position | $ 145,210 | $ 195,376 |
Less: cash borrowings | (128,578) | (88,226) |
Net cash position | $ 16,632 | $ 107,150 |
Financial Statement Details - B
Financial Statement Details - Billed Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | |||
Accounts receivable billed | $ 610,333 | $ 652,061 | |
Allowance for doubtful accounts | (9,537) | (9,076) | |
Accounts receivable billed, net | $ 600,796 | $ 642,985 | $ 642,985 |
Financial Statement Details -39
Financial Statement Details - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Trade receivables sold | $ 45.4 |
Proceeds from sale of trade receivables | $ 45.2 |
Financial Statement Details - S
Financial Statement Details - Schedule of Goodwill (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Gross carrying amount, beginning balance | $ 4,308,737,000 |
Accumulated impairment losses, beginning balance | (16,166,000) |
Goodwill net of accumulated impairment losses, beginning balance | 4,292,571,000 |
Business combinations | (4,214,000) |
Impact of foreign currency translation | 17,887,000 |
Gross carrying amount, ending balance | 4,322,410,000 |
Accumulated impairment losses, ending balance | (16,166,000) |
Goodwill net of accumulated impairment losses, ending balance | 4,306,244,000 |
Impairment of goodwill | 0 |
Clinical Solutions | |
Goodwill [Roll Forward] | |
Gross carrying amount, beginning balance | 2,808,975,000 |
Accumulated impairment losses, beginning balance | (8,142,000) |
Goodwill net of accumulated impairment losses, beginning balance | 2,800,833,000 |
Business combinations | (2,529,000) |
Impact of foreign currency translation | 11,927,000 |
Gross carrying amount, ending balance | 2,818,373,000 |
Accumulated impairment losses, ending balance | (8,142,000) |
Goodwill net of accumulated impairment losses, ending balance | 2,810,231,000 |
Commercial Solutions | |
Goodwill [Roll Forward] | |
Gross carrying amount, beginning balance | 1,499,762,000 |
Accumulated impairment losses, beginning balance | (8,024,000) |
Goodwill net of accumulated impairment losses, beginning balance | 1,491,738,000 |
Business combinations | (1,685,000) |
Impact of foreign currency translation | 5,960,000 |
Gross carrying amount, ending balance | 1,504,037,000 |
Accumulated impairment losses, ending balance | (8,024,000) |
Goodwill net of accumulated impairment losses, ending balance | $ 1,496,013,000 |
Financial Statement Details - A
Financial Statement Details - Accumulated Other Comprehensive Income (Loss), Net of Taxes (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustments, net of tax | $ 14,003 | $ (23,514) | |
Unrealized gains on derivative instruments, net of tax | 1,819 | 1,129 | |
Accumulated other comprehensive income (loss), net of tax | $ 15,822 | $ (22,385) | $ (22,385) |
Financial Statement Details -42
Financial Statement Details - Summary of Changes of Reclassification out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 3,022,579 | ||
Other comprehensive gain before reclassifications | 34,634 | ||
Amount of gain reclassified from accumulated other comprehensive income (loss) into the statements of operations | (277) | ||
Net current period other comprehensive gain, net of tax | 34,357 | $ 4,996 | |
Balance at end of period | 2,907,259 | ||
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (22,385) | ||
Balance at January 1, 2018 | $ (18,535) | ||
Balance at end of period | 15,822 | ||
Unrealized gain on derivative instruments, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | 1,129 | ||
Balance at January 1, 2018 | 1,385 | ||
Other comprehensive gain before reclassifications | 711 | 193 | |
Amount of gain reclassified from accumulated other comprehensive income (loss) into the statements of operations | (277) | (43) | |
Net current period other comprehensive gain, net of tax | 434 | 150 | |
Balance at end of period | 1,819 | ||
Foreign currency translation adjustments, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (23,514) | ||
Balance at January 1, 2018 | (19,920) | ||
Other comprehensive gain before reclassifications | 33,923 | ||
Amount of gain reclassified from accumulated other comprehensive income (loss) into the statements of operations | 0 | ||
Net current period other comprehensive gain, net of tax | 33,923 | $ 4,846 | |
Balance at end of period | $ 14,003 | ||
ASU 2018-02 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of income tax benefit due to adoption of ASU 2018-02 | 3,850 | ||
ASU 2018-02 | Unrealized gain on derivative instruments, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of income tax benefit due to adoption of ASU 2018-02 | 256 | ||
ASU 2018-02 | Foreign currency translation adjustments, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of income tax benefit due to adoption of ASU 2018-02 | $ 3,594 |
Financial Statement Details - T
Financial Statement Details - Tax Effects Allocated to Each Component of OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains arising during period, Net-of-Tax Amount | $ 34,634 | |
Reclassification adjustment of realized gains to net income, Net-of-Tax Amount | (277) | |
Other comprehensive income, Before-Tax Amount | 37,225 | $ 5,083 |
Other comprehensive income, Tax (Expense) or Benefit | (2,868) | (87) |
Net current period other comprehensive gain, net of tax | 34,357 | 4,996 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains arising during period, Net-of-Tax Amount | 33,923 | |
Reclassification adjustment of realized gains to net income, Net-of-Tax Amount | 0 | |
Other comprehensive income, Before-Tax Amount | 36,791 | 4,846 |
Other comprehensive income, Tax (Expense) or Benefit | (2,868) | 0 |
Net current period other comprehensive gain, net of tax | 33,923 | 4,846 |
Unrealized (loss) gain on derivative instruments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains arising during period, Before-Tax Amount | 711 | 305 |
Unrealized gains arising during period, Tax (Expense) or Benefit | 0 | (112) |
Unrealized gains arising during period, Net-of-Tax Amount | 711 | 193 |
Reclassification adjustment of realized gains to net income, Before-Tax-Amount | (277) | (68) |
Reclassification adjustment of realized gains to net income, Tax (Expense) or Benefit | 0 | 25 |
Reclassification adjustment of realized gains to net income, Net-of-Tax Amount | (277) | (43) |
Other comprehensive income, Before-Tax Amount | 434 | 237 |
Other comprehensive income, Tax (Expense) or Benefit | 0 | (87) |
Net current period other comprehensive gain, net of tax | $ 434 | $ 150 |
Financial Statement Details - O
Financial Statement Details - Other Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income and Expenses [Abstract] | ||
Net realized foreign currency loss | $ (5,517) | $ (670) |
Net unrealized foreign currency loss | (6,364) | (2,707) |
Other, net | (673) | (80) |
Total other expense, net | $ (12,554) | $ (3,457) |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Aug. 01, 2017 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 4,306,244 | $ 4,292,571 | $ 4,292,571 | |
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | (4,214) | |||
Clinical Solutions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 2,810,231 | 2,800,833 | ||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | (2,529) | |||
Commercial Solutions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 1,496,013 | 1,491,738 | ||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | (1,685) | |||
InVentiv Merger | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | $ 4,510,000 | |||
Merger-related expenses accounted separately from business combination | 25,200 | |||
Goodwill | 3,729,281 | |||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | 4,200 | |||
InVentiv Merger | Clinical Solutions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 2,240,000 | |||
InVentiv Merger | Commercial Solutions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 1,490,000 | |||
InVentiv Merger | Contingent Tax-Sharing Obligation | ||||
Business Acquisition [Line Items] | ||||
Contingent tax-sharing obligation assumed through business combinations | $ 51,700 | $ 50,500 |
Business Combinations - Allocat
Business Combinations - Allocation of Consideration Transferred (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Liabilities assumed: | |||
Goodwill | $ 4,306,244 | $ 4,292,571 | $ 4,292,571 |
InVentiv Merger | |||
Assets acquired: | |||
Cash and cash equivalents | 57,338 | ||
Restricted cash | 433 | ||
Accounts receivable | 367,169 | ||
Unbilled accounts receivable | 261,585 | ||
Other current assets | 95,506 | ||
Property and equipment | 113,674 | ||
Intangible assets | 1,334,200 | ||
Other assets | 50,052 | ||
Total assets acquired | 2,279,957 | ||
Liabilities assumed: | |||
Accounts payable | 38,072 | ||
Accrued liabilities | 306,649 | ||
Contract liabilities | 247,474 | ||
Capital leases | 40,928 | ||
Long-term debt, current and non-current | 737,872 | ||
Deferred income taxes, net | 11,382 | ||
Other liabilities | 121,238 | ||
Total liabilities assumed | 1,503,615 | ||
Total identifiable assets acquired, net | 776,342 | ||
Goodwill | $ 3,729,281 |
Business Combinations - Unaudit
Business Combinations - Unaudited Pro Forma Financial Information (Details) - InVentiv Merger $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Pro forma total revenue | $ | $ 1,064,963 |
Pro forma net income | $ | $ 3,119 |
Pro forma income per share: | |
Basic (USD per share) | $ / shares | $ 0.03 |
Diluted (USD per share) | $ / shares | $ 0.03 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Trading securities | $ 16,137 | $ 16,318 |
Derivative instruments | 2,601 | 2,179 |
Total assets | 18,738 | 18,497 |
Liabilities: | ||
Contingent tax-sharing obligations assumed through business combinations | 51,674 | 50,480 |
Total liabilities | 51,674 | 50,480 |
Level 1 | ||
Assets: | ||
Trading securities | 16,137 | 16,318 |
Derivative instruments | 0 | 0 |
Total assets | 16,137 | 16,318 |
Liabilities: | ||
Contingent tax-sharing obligations assumed through business combinations | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Trading securities | 0 | 0 |
Derivative instruments | 2,601 | 2,179 |
Total assets | 2,601 | 2,179 |
Liabilities: | ||
Contingent tax-sharing obligations assumed through business combinations | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Assets: | ||
Trading securities | 0 | 0 |
Derivative instruments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent tax-sharing obligations assumed through business combinations | 51,674 | 50,480 |
Total liabilities | $ 51,674 | $ 50,480 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Changes in the Carrying Amount of Contingent Tax Sharing Obligations (Details) - Contingent Tax-Sharing Obligation $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Balance at December 31, 2017 | $ 50,480 |
Changes in fair value recognized in earnings | 1,194 |
Payments | 0 |
Balance at March 31, 2018 | $ 51,674 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill and identifiable intangible assets | $ 5,550 | $ 5,580 |
Fair Value Measurements - Sch51
Fair Value Measurements - Schedule of Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
7.5% Senior Unsecured Notes due 2024 (inclusive of unamortized premium) | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 7.50% | |
Level 2 | Carrying Value | Term Loan A due August 2022 | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | $ 993,750 | $ 1,000,000 |
Level 2 | Carrying Value | Term Loan B due August 2024 (net of original issue debt discount) | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 1,523,261 | 1,548,149 |
Level 2 | Carrying Value | 7.5% Senior Unsecured Notes due 2024 (inclusive of unamortized premium) | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 442,092 | 443,507 |
Level 2 | Estimated Fair Value | Term Loan A due August 2022 | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 993,750 | 1,000,000 |
Level 2 | Estimated Fair Value | Term Loan B due August 2024 (net of original issue debt discount) | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 1,525,000 | 1,550,000 |
Level 2 | Estimated Fair Value | 7.5% Senior Unsecured Notes due 2024 (inclusive of unamortized premium) | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 433,225 | $ 433,729 |
Restructuring and Other Costs -
Restructuring and Other Costs - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Employee Severance Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | $ 0.2 |
Facility Closure and Lease Termination Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 0.8 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 0.1 |
Consulting Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 1.7 |
InVentiv Merger | Employee Severance Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 8.4 |
InVentiv Merger | Facility Closure and Lease Termination Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 2.2 |
InVentiv Merger | Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | $ 0.3 |
Restructuring and Other Costs53
Restructuring and Other Costs - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve | ||
Expenses incurred | $ 13,707 | $ 1,927 |
Other Costs | ||
Restructuring Reserve | ||
Other restructuring expenses, non-cash | 2,000 | |
Business Restructuring Reserves | ||
Restructuring Reserve | ||
Balance at beginning of period | 16,793 | |
Expenses incurred | 11,676 | |
Cash payments made | (12,891) | |
Balance at end of period | 15,578 | |
Business Restructuring Reserves | Employee Severance Costs, Including Executive Transition Costs | ||
Restructuring Reserve | ||
Balance at beginning of period | 8,858 | |
Expenses incurred | 8,572 | |
Cash payments made | (9,511) | |
Balance at end of period | 7,919 | |
Business Restructuring Reserves | Facility Closure and Lease Termination Costs | ||
Restructuring Reserve | ||
Balance at beginning of period | 7,411 | |
Expenses incurred | 1,303 | |
Cash payments made | (1,697) | |
Balance at end of period | 7,017 | |
Business Restructuring Reserves | Other Costs | ||
Restructuring Reserve | ||
Balance at beginning of period | 524 | |
Expenses incurred | 1,801 | |
Cash payments made | (1,683) | |
Balance at end of period | $ 642 |
Shareholders' Equity - Narrati
Shareholders' Equity - Narrative (Details) - USD ($) | 1 Months Ended | ||
Mar. 31, 2018 | Feb. 26, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 250,000,000 | ||
Common stock par value (USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock | |||
Class of Stock [Line Items] | |||
Stock repurchased (in shares) | 948,100 | ||
Stock repurchased, average price per share (USD per share) | $ 39.55 | ||
Stock repurchased, total purchase price | $ 37,500,000 | ||
Stock repurchase program, remaining authorization to repurchase | $ 212,500,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Non-vested at beginning of period (in shares) | shares | 907,580 |
Granted (in shares) | shares | 1,798,554 |
Vested (in shares) | shares | (172,277) |
Forfeited (in shares) | shares | (4,387) |
Non-vested at end of period (in shares) | shares | 2,529,470 |
Weighted Average Grant Date Fair Value | |
Non-vested at beginning of period (USD per share) | $ / shares | $ 49.30 |
Granted (USD per share) | $ / shares | 38.22 |
Vested (USD per share) | $ / shares | 49.39 |
Forfeited (USD per share) | $ / shares | 39.68 |
Non-vested at end of period (USD per share) | $ / shares | $ 41.44 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 28, 2018trancheshares | Mar. 31, 2018USD ($)shares | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense related to unvested RSUs | $ | $ 91.7 | |
Weighted average period for recognition | 2 years 7 months 6 days | |
Number of shares granted (in shares) | 1,798,554 | |
Performance-Based RSU Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted (in shares) | 185,432 | |
Vesting period | 3 years | |
Number of equal tranches | tranche | 3 | |
Performance-Based RSU Awards | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 0.00% | |
Performance-Based RSU Awards | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting rights, percentage | 150.00% |
Share-Based Compensation - Su57
Share-Based Compensation - Summary of Share-Based Compensation Expense Recognized in Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | $ 7,879 | $ 5,819 |
Direct costs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 3,752 | 2,713 |
Selling, general, and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | 4,036 | 3,106 |
Restructuring and other costs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total share-based compensation expense | $ 91 | $ 0 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net (loss) income | $ (24,552) | $ 21,187 |
Denominator: | ||
Basic weighted average common shares outstanding (in shares) | 104,449 | 54,015 |
Effect of dilutive securities: | ||
Stock options and other awards under deferred share-based compensation programs (in shares) | 0 | 1,108 |
Diluted weighted average common shares outstanding (in shares) | 104,449 | 55,123 |
(Loss) earnings per share: | ||
Basic (USD per share) | $ (0.24) | $ 0.39 |
Diluted (USD per share) | $ (0.24) | $ 0.38 |
Earnings Per Share - Schedule59
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total common stock equivalents excluded from diluted earnings per share computation (in shares) | 1,995 | 908 |
Stock-Based Compensation Plans | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total common stock equivalents excluded from diluted earnings per share computation (in shares) | 1,097 | 908 |
Stock-Based Compensation Plans | Antidilutive Securities Excluded Due to Reporting of Net Loss During the Period | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total common stock equivalents excluded from diluted earnings per share computation (in shares) | 898 | 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ (8,972) | $ 7,120 | |
Effective tax rate | 26.80% | 25.20% | |
Unrecognized tax benefits | $ 42,400 | $ 43,700 | |
Unrecognized tax benefits, decrease due to lapse in statute of limitations | $ 1,300 |
Revenue from Contracts with C61
Revenue from Contracts with Customers - Capitalized Costs and Related Amortization (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Capitalized costs incurred to obtain or fulfill contracts with customers | $ 20,973 |
Amortization of capitalized costs | $ 3,134 |
Revenue from Contracts with C62
Revenue from Contracts with Customers - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract termination notice period | 30 days |
Unsatisfied performance obligations under contracts with a contract term greater than one year | $ 4,860 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract term | 1 year |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract term | 5 years |
Revenue from Contracts with C63
Revenue from Contracts with Customers - Adjustments to Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 186,719 | $ 321,262 | $ 321,262 |
Restricted cash | 2,236 | 714 | 714 |
Accounts receivable billed, net | 600,796 | 642,985 | 642,985 |
Accounts receivable unbilled | 392,536 | 220,359 | 373,003 |
Contract assets | 111,934 | 94,567 | 0 |
Prepaid expenses and other current assets | 94,291 | 103,667 | 84,215 |
Total current assets | 1,388,512 | 1,383,554 | 1,422,179 |
Property and equipment, net | 173,051 | 180,412 | 180,412 |
Goodwill | 4,306,244 | 4,292,571 | 4,292,571 |
Intangible assets, net | 1,241,709 | 1,286,050 | 1,286,050 |
Deferred income tax assets | 27,709 | 26,016 | 20,159 |
Other long-term assets | 104,679 | 97,097 | 84,496 |
Total assets | 7,241,904 | 7,265,700 | 7,285,867 |
Current liabilities: | |||
Accounts payable | 69,500 | 58,575 | 58,575 |
Accrued liabilities | 518,383 | 549,914 | 500,303 |
Contract liabilities | 643,338 | 593,345 | 559,270 |
Current portion of capital lease obligations | 15,889 | 16,414 | 16,414 |
Current portion of long-term debt | 31,250 | 25,000 | 25,000 |
Total current liabilities | 1,278,360 | 1,243,248 | 1,159,562 |
Capital lease obligations, non-current | 15,607 | 20,376 | 20,376 |
Long-term debt, non-current | 2,908,366 | 2,945,934 | 2,945,934 |
Deferred income tax liabilities | 22,265 | 29,452 | 37,807 |
Other long-term liabilities | 110,047 | 102,926 | 99,609 |
Total liabilities | 4,334,645 | 4,341,936 | 4,263,288 |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 1,038 | 1,044 | 1,044 |
Additional paid-in capital | 3,394,586 | 3,414,389 | 3,414,389 |
Accumulated other comprehensive income (loss), net of tax | 15,822 | (22,385) | (22,385) |
Accumulated deficit | (504,187) | (469,284) | (370,469) |
Total shareholders' equity | 2,907,259 | 2,923,764 | 3,022,579 |
Total liabilities and shareholders' equity | 7,241,904 | 7,265,700 | 7,285,867 |
As Reported | |||
Current assets: | |||
Cash and cash equivalents | 186,719 | 321,262 | |
Restricted cash | 2,236 | 714 | |
Accounts receivable billed, net | 600,796 | 642,985 | |
Accounts receivable unbilled | 578,043 | 373,003 | |
Contract assets | 0 | 0 | |
Prepaid expenses and other current assets | 72,981 | 84,215 | |
Total current assets | 1,440,775 | 1,422,179 | |
Property and equipment, net | 173,051 | 180,412 | |
Goodwill | 4,306,244 | 4,292,571 | |
Intangible assets, net | 1,241,709 | 1,286,050 | |
Deferred income tax assets | 21,617 | 20,159 | |
Other long-term assets | 92,402 | 84,496 | |
Total assets | 7,275,798 | 7,285,867 | |
Current liabilities: | |||
Accounts payable | 69,500 | 58,575 | |
Accrued liabilities | 466,185 | 500,303 | |
Contract liabilities | 617,236 | 559,270 | |
Current portion of capital lease obligations | 15,889 | 16,414 | |
Current portion of long-term debt | 31,250 | 25,000 | |
Total current liabilities | 1,200,060 | 1,159,562 | |
Capital lease obligations, non-current | 15,607 | 20,376 | |
Long-term debt, non-current | 2,908,366 | 2,945,934 | |
Deferred income tax liabilities | 31,536 | 37,807 | |
Other long-term liabilities | 106,500 | 99,609 | |
Total liabilities | 4,262,069 | 4,263,288 | |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | |
Common stock | 1,038 | 1,044 | |
Additional paid-in capital | 3,394,586 | 3,414,389 | |
Accumulated other comprehensive income (loss), net of tax | 17,932 | (22,385) | |
Accumulated deficit | (399,827) | (370,469) | |
Total shareholders' equity | 3,013,729 | 3,022,579 | |
Total liabilities and shareholders' equity | $ 7,275,798 | $ 7,285,867 | |
Adjustments | ASU 2014-09 | |||
Current assets: | |||
Cash and cash equivalents | 0 | ||
Restricted cash | 0 | ||
Accounts receivable billed, net | 0 | ||
Accounts receivable unbilled | (152,644) | ||
Contract assets | 94,567 | ||
Prepaid expenses and other current assets | 19,452 | ||
Total current assets | (38,625) | ||
Property and equipment, net | 0 | ||
Goodwill | 0 | ||
Intangible assets, net | 0 | ||
Deferred income tax assets | 5,857 | ||
Other long-term assets | 12,601 | ||
Total assets | (20,167) | ||
Current liabilities: | |||
Accounts payable | 0 | ||
Accrued liabilities | 49,611 | ||
Contract liabilities | 34,075 | ||
Current portion of capital lease obligations | 0 | ||
Current portion of long-term debt | 0 | ||
Total current liabilities | 83,686 | ||
Capital lease obligations, non-current | 0 | ||
Long-term debt, non-current | 0 | ||
Deferred income tax liabilities | (8,355) | ||
Other long-term liabilities | 3,317 | ||
Total liabilities | 78,648 | ||
Shareholders' equity: | |||
Preferred stock | 0 | ||
Common stock | 0 | ||
Additional paid-in capital | 0 | ||
Accumulated other comprehensive income (loss), net of tax | 0 | ||
Accumulated deficit | (98,815) | ||
Total shareholders' equity | (98,815) | ||
Total liabilities and shareholders' equity | $ (20,167) |
Revenue from Contracts with C64
Revenue from Contracts with Customers - Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Service revenue | $ 1,057,196 | $ 252,078 |
Reimbursable out-of-pocket expenses | 0 | 129,840 |
Total revenue | 1,057,196 | 381,918 |
Direct costs (exclusive of depreciation and amortization) | 532,057 | 154,835 |
Reimbursable out-of-pocket expenses | 308,766 | 129,840 |
Selling, general, and administrative | 99,259 | 44,934 |
Restructuring and other costs | 13,707 | 1,927 |
Transaction and integration-related expenses | 25,211 | 2 |
Depreciation | 18,028 | 6,164 |
Amortization | 49,993 | 9,464 |
Total operating expenses | 1,047,021 | 347,166 |
Income from operations | 10,175 | 34,752 |
Other expense, net: | ||
Interest income | 839 | 112 |
Interest expense | (31,736) | (3,100) |
Loss on extinguishment of debt | (248) | 0 |
Other expense, net | (12,554) | (3,457) |
Total other expense, net | (43,699) | (6,445) |
(Loss) income before provision for income taxes | (33,524) | 28,307 |
Income tax benefit | 8,972 | (7,120) |
Net (loss) income | $ (24,552) | $ 21,187 |
Loss per share attributable to common shareholders: | ||
Basic (USD per share) | $ (0.24) | $ 0.39 |
Diluted (USD per share) | $ (0.24) | $ 0.38 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 104,449 | 54,015 |
Diluted (in shares) | 104,449 | 55,123 |
ASC 605 As Adjusted | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Service revenue | $ 760,058 | |
Reimbursable out-of-pocket expenses | 310,098 | |
Total revenue | 1,070,156 | |
Direct costs (exclusive of depreciation and amortization) | 536,888 | |
Reimbursable out-of-pocket expenses | 310,098 | |
Selling, general, and administrative | 99,716 | |
Restructuring and other costs | 13,707 | |
Transaction and integration-related expenses | 25,211 | |
Depreciation | 18,028 | |
Amortization | 49,993 | |
Total operating expenses | 1,053,641 | |
Income from operations | 16,515 | |
Other expense, net: | ||
Interest income | 839 | |
Interest expense | (31,736) | |
Loss on extinguishment of debt | (248) | |
Other expense, net | (12,554) | |
Total other expense, net | (43,699) | |
(Loss) income before provision for income taxes | (27,184) | |
Income tax benefit | 8,177 | |
Net (loss) income | $ (19,007) | |
Loss per share attributable to common shareholders: | ||
Basic (USD per share) | $ (0.18) | |
Diluted (USD per share) | $ (0.18) | |
Weighted average common shares outstanding: | ||
Basic (in shares) | 104,449 | |
Diluted (in shares) | 104,449 |
Revenue from Contracts with C65
Revenue from Contracts with Customers - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 186,719 | $ 321,262 | $ 321,262 |
Restricted cash | 2,236 | 714 | 714 |
Accounts receivable billed, net | 600,796 | 642,985 | 642,985 |
Accounts receivable unbilled | 392,536 | 220,359 | 373,003 |
Contract assets | 111,934 | 94,567 | 0 |
Prepaid expenses and other current assets | 94,291 | 103,667 | 84,215 |
Total current assets | 1,388,512 | 1,383,554 | 1,422,179 |
Property and equipment, net | 173,051 | 180,412 | 180,412 |
Goodwill | 4,306,244 | 4,292,571 | 4,292,571 |
Intangible assets, net | 1,241,709 | 1,286,050 | 1,286,050 |
Deferred income tax assets | 27,709 | 26,016 | 20,159 |
Other long-term assets | 104,679 | 97,097 | 84,496 |
Total assets | 7,241,904 | 7,265,700 | 7,285,867 |
Current liabilities: | |||
Accounts payable | 69,500 | 58,575 | 58,575 |
Accrued liabilities | 518,383 | 549,914 | 500,303 |
Contract liabilities | 643,338 | 593,345 | 559,270 |
Current portion of capital lease obligations | 15,889 | 16,414 | 16,414 |
Current portion of long-term debt | 31,250 | 25,000 | 25,000 |
Total current liabilities | 1,278,360 | 1,243,248 | 1,159,562 |
Capital lease obligations, non-current | 15,607 | 20,376 | 20,376 |
Long-term debt, non-current | 2,908,366 | 2,945,934 | 2,945,934 |
Deferred income tax liabilities | 22,265 | 29,452 | 37,807 |
Other long-term liabilities | 110,047 | 102,926 | 99,609 |
Total liabilities | 4,334,645 | 4,341,936 | 4,263,288 |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 1,038 | 1,044 | 1,044 |
Additional paid-in capital | 3,394,586 | 3,414,389 | 3,414,389 |
Accumulated other comprehensive income (loss), net of tax | 15,822 | (22,385) | (22,385) |
Accumulated deficit | (504,187) | (469,284) | (370,469) |
Total shareholders' equity | 2,907,259 | 2,923,764 | 3,022,579 |
Total liabilities and shareholders' equity | 7,241,904 | $ 7,265,700 | 7,285,867 |
ASC 605 As Adjusted | |||
Current assets: | |||
Cash and cash equivalents | 186,719 | 321,262 | |
Restricted cash | 2,236 | 714 | |
Accounts receivable billed, net | 600,796 | 642,985 | |
Accounts receivable unbilled | 578,043 | 373,003 | |
Contract assets | 0 | 0 | |
Prepaid expenses and other current assets | 72,981 | 84,215 | |
Total current assets | 1,440,775 | 1,422,179 | |
Property and equipment, net | 173,051 | 180,412 | |
Goodwill | 4,306,244 | 4,292,571 | |
Intangible assets, net | 1,241,709 | 1,286,050 | |
Deferred income tax assets | 21,617 | 20,159 | |
Other long-term assets | 92,402 | 84,496 | |
Total assets | 7,275,798 | 7,285,867 | |
Current liabilities: | |||
Accounts payable | 69,500 | 58,575 | |
Accrued liabilities | 466,185 | 500,303 | |
Contract liabilities | 617,236 | 559,270 | |
Current portion of capital lease obligations | 15,889 | 16,414 | |
Current portion of long-term debt | 31,250 | 25,000 | |
Total current liabilities | 1,200,060 | 1,159,562 | |
Capital lease obligations, non-current | 15,607 | 20,376 | |
Long-term debt, non-current | 2,908,366 | 2,945,934 | |
Deferred income tax liabilities | 31,536 | 37,807 | |
Other long-term liabilities | 106,500 | 99,609 | |
Total liabilities | 4,262,069 | 4,263,288 | |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | |
Common stock | 1,038 | 1,044 | |
Additional paid-in capital | 3,394,586 | 3,414,389 | |
Accumulated other comprehensive income (loss), net of tax | 17,932 | (22,385) | |
Accumulated deficit | (399,827) | (370,469) | |
Total shareholders' equity | 3,013,729 | 3,022,579 | |
Total liabilities and shareholders' equity | $ 7,275,798 | $ 7,285,867 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total segment service revenue | $ 1,057,196 | $ 252,078 |
Reimbursable out-of-pocket expenses not allocated to segments | 0 | 129,840 |
Total consolidated revenue | 1,057,196 | 381,918 |
Total segment direct costs | 532,057 | 154,835 |
Reimbursable out-of-pocket expenses | 308,766 | 129,840 |
Selling, general, and administrative expenses | 99,259 | 44,934 |
Operating income | 10,175 | 34,752 |
Share-based compensation expense | 7,879 | 5,819 |
Restructuring and other costs | 13,707 | 1,927 |
Transaction and integration-related expenses | 25,211 | 2 |
Direct costs | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 3,752 | 2,713 |
Selling, general, and administrative expenses | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 4,036 | 3,106 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment service revenue | 1,057,196 | 252,078 |
Total segment direct costs | 528,305 | 152,122 |
Reimbursable out-of-pocket expenses | 308,766 | 0 |
Selling, general, and administrative expenses | 85,464 | 36,790 |
Operating income | 134,661 | 63,166 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Reimbursable out-of-pocket expenses not allocated to segments | 0 | 129,840 |
Reimbursable out-of-pocket expenses | 0 | 129,840 |
Selling, general, and administrative expenses | 9,759 | 5,038 |
Restructuring and other costs | 13,707 | 1,927 |
Transaction and integration-related expenses | 25,211 | 2 |
Depreciation and amortization | 68,021 | 15,628 |
Corporate | Direct costs | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 3,752 | 2,713 |
Corporate | Selling, general, and administrative expenses | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation expense | 4,036 | 3,106 |
Clinical Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment service revenue | 786,839 | 249,497 |
Total segment direct costs | 353,893 | 149,887 |
Reimbursable out-of-pocket expenses | 261,478 | 0 |
Selling, general, and administrative expenses | 65,946 | 36,790 |
Operating income | 105,522 | 62,820 |
Commercial Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment service revenue | 270,357 | 2,581 |
Total segment direct costs | 174,412 | 2,235 |
Reimbursable out-of-pocket expenses | 47,288 | 0 |
Selling, general, and administrative expenses | 19,518 | 0 |
Operating income | $ 29,139 | $ 346 |
Operations by Geographic Loca67
Operations by Geographic Location - Total Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues by Geographic Location | ||
Total service revenue | $ 1,057,196 | $ 252,078 |
Reimbursable out-of-pocket expenses | 0 | 129,840 |
Total revenue | 1,057,196 | 381,918 |
North America | ||
Revenues by Geographic Location | ||
Total service revenue | 731,766 | 142,759 |
United States | ||
Revenues by Geographic Location | ||
Total service revenue | $ 696,400 | $ 136,300 |
United States | Geographic Concentration Risk | Net Service Revenue | ||
Revenues by Geographic Location | ||
Concentration risk percentage | 65.90% | 54.10% |
Europe, Middle East, and Africa | ||
Revenues by Geographic Location | ||
Total service revenue | $ 228,837 | $ 80,012 |
Asia-Pacific | ||
Revenues by Geographic Location | ||
Total service revenue | 77,980 | 20,209 |
Latin America | ||
Revenues by Geographic Location | ||
Total service revenue | $ 18,613 | $ 9,098 |
Operations by Geographic Loca68
Operations by Geographic Location - Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 173,051 | $ 180,412 | $ 180,412 |
North America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 127,171 | 136,101 | |
United States | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 120,400 | 128,500 | |
Europe, Middle East, and Africa | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 27,733 | 25,517 | |
Asia-Pacific | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 13,879 | 14,700 | |
Latin America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 4,268 | $ 4,094 |
Concentration of Credit Risk -
Concentration of Credit Risk - Concentration of Cash Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Concentration Risk [Line Items] | |||
Cash and cash equivalents | $ 186,719 | $ 321,262 | $ 321,262 |
Geographic Concentration Risk | Cash and Cash Equivalents | Non-US | |||
Concentration Risk [Line Items] | |||
Cash and cash equivalents | $ 62,100 | $ 192,000 | |
Concentration risk percentage | 33.00% | 60.00% | |
Customer Concentration Risk | Total consolidated service revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Customer Concentration Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 13.00% |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Related party transactions | $ 0 | |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Incurred professional services costs, related party | $ 200,000 | |
Revenue from related parties | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Oct. 31, 2013USD ($)subsidiary | Jan. 31, 2015USD ($) | Dec. 31, 2013USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |||||
Self-insurance reserves | $ 20,800 | $ 16,600 | |||
Arbitration Claim Under Master Services Agreement | |||||
Loss Contingencies [Line Items] | |||||
Number of subsidiaries | subsidiary | 2 | ||||
Arbitration Claim Under Master Services Agreement | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 50,000 | ||||
Arbitration Claim Under Master Services Agreement, Counterclaim for Damages | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 2,000 | $ 2,000 | |||
Arbitration Claim Under Master Services Agreement, Counterclaim for Other Equitable Remedies | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 20,000 | ||||
Recurring | |||||
Loss Contingencies [Line Items] | |||||
Contingent tax-sharing obligations assumed through business combinations | $ 51,674 | $ 50,480 |
Subsequent Events (Details)
Subsequent Events (Details) - Secured Debt - Subsequent Event $ in Millions | May 04, 2018USD ($) |
Repricing Amendment, Term A Loan | |
Subsequent Event [Line Items] | |
Principal outstanding | $ 987.5 |
Repricing Amendment, Term A Loan | ABR | |
Subsequent Event [Line Items] | |
Decrease to margin spread | 0.25% |
Repricing Amendment, Term A Loan | ABR | Minimum | |
Subsequent Event [Line Items] | |
Margin spread | 0.25% |
Repricing Amendment, Term A Loan | ABR | Maximum | |
Subsequent Event [Line Items] | |
Margin spread | 0.50% |
Repricing Amendment, Term A Loan | Eurocurrency Rate | |
Subsequent Event [Line Items] | |
Decrease to margin spread | 0.25% |
Repricing Amendment, Term A Loan | Eurocurrency Rate | Minimum | |
Subsequent Event [Line Items] | |
Margin spread | 1.25% |
Repricing Amendment, Term A Loan | Eurocurrency Rate | Maximum | |
Subsequent Event [Line Items] | |
Margin spread | 1.50% |
Repricing Amendment, Term B Loan | |
Subsequent Event [Line Items] | |
Period from closing date in which prepayment premium is required for a repricing transaction | 6 months |
Principal outstanding | $ 1,530 |
Repricing Amendment, Term B Loan | ABR | |
Subsequent Event [Line Items] | |
Decrease to margin spread | 0.25% |
Repricing Amendment, Term B Loan | ABR | Minimum | |
Subsequent Event [Line Items] | |
Margin spread | 0.75% |
Repricing Amendment, Term B Loan | ABR | Maximum | |
Subsequent Event [Line Items] | |
Margin spread | 1.00% |
Repricing Amendment, Term B Loan | Eurocurrency Rate | |
Subsequent Event [Line Items] | |
Decrease to margin spread | 0.25% |
Secured leverage ratio minimum when higher rate applies | 2.75 |
Repricing Amendment, Term B Loan | Eurocurrency Rate | Minimum | |
Subsequent Event [Line Items] | |
Margin spread | 1.75% |
Repricing Amendment, Term B Loan | Eurocurrency Rate | Maximum | |
Subsequent Event [Line Items] | |
Margin spread | 2.00% |