Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 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 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 103,225,918 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 1,114,918 | $ 822,328 | $ 3,244,644 | $ 1,595,381 |
Costs and operating expenses: | ||||
Selling, general, and administrative | 96,943 | 88,855 | 296,420 | 176,320 |
Restructuring and other costs | 19,349 | 6,670 | 41,647 | 12,626 |
Transaction and integration-related expenses | 18,561 | 84,340 | 61,804 | 108,081 |
Asset impairment charges | 0 | 30,000 | 0 | 30,000 |
Depreciation | 17,639 | 14,049 | 53,224 | 26,279 |
Amortization | 50,395 | 51,383 | 150,333 | 70,309 |
Total operating expenses | 1,075,101 | 911,216 | 3,163,930 | 1,639,267 |
Income (loss) from operations | 39,817 | (88,888) | 80,714 | (43,886) |
Other expense, net: | ||||
Interest income | 1,004 | 501 | 3,498 | 765 |
Interest expense | (33,097) | (27,432) | (97,727) | (33,818) |
Loss on extinguishment of debt | (1,789) | (102) | (3,914) | (102) |
Other (expense) income, net | (4,346) | (5,953) | 15,101 | (16,164) |
Total other expense, net | (38,228) | (32,986) | (83,042) | (49,319) |
Income (loss) before provision for income taxes | 1,589 | (121,874) | (2,328) | (93,205) |
Income tax expense | (11,983) | (26,124) | (19,058) | (30,217) |
Net loss | $ (10,394) | $ (147,998) | $ (21,386) | $ (123,422) |
Loss per share: | ||||
Basic (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Diluted (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
Diluted (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
Service revenue | ||||
Revenue | $ 1,114,918 | $ 592,207 | $ 3,244,644 | $ 1,102,372 |
Costs and operating expenses: | ||||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 539,570 | 405,798 | 1,619,620 | 722,643 |
Reimbursable out-of-pocket expenses | ||||
Revenue | 0 | 230,121 | 0 | 493,009 |
Costs and operating expenses: | ||||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | $ 332,644 | $ 230,121 | $ 940,882 | $ 493,009 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (10,394) | $ (147,998) | $ (21,386) | $ (123,422) |
Unrealized gain (loss) on derivative instruments, net of income tax (expense) benefit of ($475), $72, ($475), and $163, respectively | 2,624 | (115) | 1,341 | (248) |
Foreign currency translation adjustments, net of income tax benefit (expense) of $2,868, ($5,873), $0 and ($5,873), respectively | (1,295) | 4,626 | (36,541) | 16,958 |
Comprehensive loss | $ (9,065) | $ (143,487) | $ (56,586) | $ (106,712) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized (loss) gain on derivative instruments, income tax benefit (expense) | $ (475) | $ 72 | $ (475) | $ 163 |
Foreign currency translation adjustments, income tax benefit (expense) | $ 2,868 | $ (5,873) | $ 0 | $ (5,873) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 132,402 | $ 321,262 |
Restricted cash | 2,202 | 714 |
Accounts receivable billed, net | 656,682 | 642,985 |
Accounts receivable unbilled | 347,894 | 373,003 |
Contract assets | 136,824 | 0 |
Prepaid expenses and other current assets | 80,418 | 84,215 |
Total current assets | 1,356,422 | 1,422,179 |
Property and equipment, net | 175,128 | 180,412 |
Goodwill | 4,352,825 | 4,292,571 |
Intangible assets, net | 1,189,665 | 1,286,050 |
Deferred income tax assets | 32,702 | 20,159 |
Other long-term assets | 102,951 | 84,496 |
Total assets | 7,209,693 | 7,285,867 |
Current liabilities: | ||
Accounts payable | 82,204 | 58,575 |
Accrued liabilities | 527,225 | 500,303 |
Contract liabilities | 709,027 | 559,270 |
Current portion of capital lease obligations | 16,603 | 16,414 |
Current portion of long-term debt | 62,050 | 25,000 |
Total current liabilities | 1,397,109 | 1,159,562 |
Capital lease obligations, non-current | 21,568 | 20,376 |
Long-term debt, non-current | 2,775,631 | 2,945,934 |
Deferred income tax liabilities | 58,612 | 37,807 |
Other long-term liabilities | 123,745 | 99,609 |
Total liabilities | 4,376,665 | 4,263,288 |
Commitments and contingencies (Note 17) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value; 30,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 |
Common stock, $0.01 par value; 600,000,000 shares authorized, 103,223,093 and 104,435,501 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 1,032 | 1,044 |
Additional paid-in capital | 3,390,734 | 3,414,389 |
Accumulated other comprehensive loss, net of tax | (53,735) | (22,385) |
Accumulated deficit | (505,003) | (370,469) |
Total shareholders' equity | 2,833,028 | 3,022,579 |
Total liabilities and shareholders' equity | $ 7,209,693 | $ 7,285,867 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 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) | 103,223,093 | 104,435,501 |
Common stock shares outstanding (in shares) | 103,223,093 | 104,435,501 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (21,386) | $ (123,422) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 203,557 | 96,588 |
Amortization of capitalized loan fees and original issue discount, net of Senior Notes premium | 85 | 759 |
Share-based compensation | 26,045 | 50,928 |
(Recovery of) provision for doubtful accounts | (3,453) | 1,477 |
(Benefit from) provision for deferred income taxes | (721) | 12,733 |
Foreign currency transaction adjustments | (14,927) | 6,264 |
Asset impairment charges | 0 | 30,000 |
Fair value adjustment of contingent tax-sharing obligation | 3,582 | 0 |
Loss on extinguishment of debt | 3,914 | 102 |
Other non-cash items | 3,084 | 1,404 |
Changes in operating assets and liabilities, net of effect of business combinations: | ||
Accounts receivable, unbilled services, and advanced billings | (48,802) | 39,618 |
Accounts payable and accrued expenses | 5,371 | (10,132) |
Other assets and liabilities | 34,651 | 3,427 |
Net cash provided by operating activities | 191,000 | 109,746 |
Cash flows from investing activities: | ||
Payments associated with business acquisitions, net of cash acquired | 90,890 | 1,678,381 |
Purchases of property and equipment | (42,963) | (28,153) |
Other, net | 0 | (107) |
Net cash used in investing activities | (133,853) | (1,706,427) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt, net of discount | 0 | 2,598,000 |
Payments of debt financing costs | (3,062) | (25,476) |
Repayments of long-term debt | (354,396) | (475,097) |
Proceeds from accounts receivable financing agreement | 183,600 | 0 |
Proceeds from revolving line of credit | 0 | 15,000 |
Repayments of revolving line of credit | 0 | (40,000) |
Redemption of Senior Notes and associated breakage fees | 0 | (290,250) |
Payments of capital leases | (12,664) | (3,586) |
Payments for repurchase of common stock | (74,985) | 0 |
Proceeds from exercise of stock options | 18,042 | 17,048 |
Payments related to tax withholding for share-based compensation | (3,212) | (5,391) |
Net cash (used in) provided by financing activities | (246,677) | 1,790,248 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 2,158 | 8,883 |
Net change in cash, cash equivalents, and restricted cash | (187,372) | 202,450 |
Cash, cash equivalents, and restricted cash - beginning of period | 321,976 | 103,078 |
Cash, cash equivalents, and restricted cash - end of period | 134,604 | 305,528 |
Supplemental disclosures of non-cash investing activities: | ||
Fair value of shares issued and share-based awards assumed in business combinations | 0 | 2,769,471 |
Fair value of contingent consideration related to business combinations | 4,353 | 0 |
Purchases of property and equipment included in liabilities | 7,589 | 706 |
Vehicles acquired through capital lease agreements | $ 24,000 | $ 7,101 |
Basis of Presentation and Chang
Basis of Presentation and Changes in Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 provider of end-to-end biopharmaceutical outsourcing solutions. 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, refer to “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 and nine months ended September 30, 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 and nine months ended September 30, 2018 reflect the application of ASC 606, while the reported results for the three and nine months ended September 30, 2017 were prepared under ASC 605, Revenue Recognition (“ASC 605”). For additional information related to the impact of adopting this standard, refer to “Note 12 - 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 insignificant 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 September 30, 2018 and December 31, 2017 , which sum to the total of such amounts in the consolidated statements of cash flows (in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 132,402 $ 321,262 Restricted cash 2,202 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 134,604 $ 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 of 2017 (“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 continues to evaluate the impact of adopting this standard on its accounting policies, financial statements, business processes, systems and internal controls. Additionally, the Company has established a project management and implementation team consisting of internal resources and external advisors. These evaluation and implementation processes are expected to continue through 2018. The Company expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. The Company plans to adopt the standard on January 1, 2019. |
Financial Statement Details
Financial Statement Details | 9 Months Ended |
Sep. 30, 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 participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. 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): September 30, 2018 December 31, 2017 Gross cash position $ 130,510 $ 195,376 Less: cash borrowings (105,708 ) (88,226 ) Net cash position $ 24,802 $ 107,150 Billed Accounts Receivable, Net Billed accounts receivable, net consisted of the following (in thousands): September 30, 2018 December 31, 2017 Accounts receivable billed $ 662,138 $ 652,061 Allowance for doubtful accounts (5,456 ) (9,076 ) Accounts receivable billed, net $ 656,682 $ 642,985 Accounts Receivable Factoring Arrangement 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. For the nine months ended September 30, 2018 , the Company factored $197.4 million of trade accounts receivable on a non-recourse basis and received $196.4 million in cash proceeds from the sale. The fees associated with this transaction were insignificant. The Company did not sell any trade accounts receivables under this agreement during the year ended December 31, 2017 . Goodwill and Intangible Assets Changes in the carrying amount of goodwill by segment for the nine months ended September 30, 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) 73,901 (5,692 ) 79,593 Impact of foreign currency translation (13,647 ) (12,950 ) (697 ) Balance at September 30, 2018: Gross carrying amount 4,368,991 2,790,333 1,578,658 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses $ 4,352,825 $ 2,782,191 $ 1,570,634 (a) Accumulated impairment losses associated with the Clinical Solutions segment were recorded 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 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 nine months ended September 30, 2018 . (b) Amount represents measurement period adjustments to goodwill recognized in connection with the Merger and goodwill recognized in connection with an acquisition. Goodwill associated with these transactions is not deductible for income tax purposes. Refer to “Note 3 - Business Combinations” for further information. Intangible assets, net consisted of the following (in thousands): September 30, 2018 December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 1,489,824 $ (368,905 ) $ 1,120,919 $ 1,440,178 $ (266,158 ) $ 1,174,020 Acquired backlog 136,847 (86,329 ) 50,518 137,442 (42,095 ) 95,347 Trademarks 31,290 (13,062 ) 18,228 32,428 (15,745 ) 16,683 Total $ 1,657,961 $ (468,296 ) $ 1,189,665 $ 1,610,048 $ (323,998 ) $ 1,286,050 The fair value of the intangible assets acquired during the three months ended September 30, 2018 are amortized over an estimated useful life of 5 to 10 years . The future estimated amortization expense for the Company’s intangible assets is expected to be as follows (in thousands): Fiscal Year Ending: 2018 (remaining 3 months) $ 51,280 2019 166,353 2020 149,620 2021 132,261 2022 126,856 2023 and thereafter 563,295 Total $ 1,189,665 Accumulated Other Comprehensive Loss, Net of Tax Accumulated other comprehensive loss, net of tax, consisted of the following (in thousands): September 30, 2018 December 31, 2017 Foreign currency translation adjustments, net of tax $ (56,461 ) $ (23,514 ) Unrealized gains on derivative instruments, net of tax 2,726 1,129 Accumulated other comprehensive loss, net of tax $ (53,735 ) $ (22,385 ) Changes in accumulated other comprehensive gain (loss), net of tax for the three months ended September 30, 2018 were as follows (in thousands): Unrealized gain on derivative instruments, net of tax Foreign currency translation adjustments, net of tax Total Balance at June 30, 2018 $ 102 $ (55,166 ) $ (55,064 ) Other comprehensive gain (loss) before reclassifications 2,397 (1,295 ) 1,102 Amount of loss reclassified from accumulated other comprehensive loss into statement of operations 227 — 227 Net current period other comprehensive gain (loss), net of tax 2,624 (1,295 ) 1,329 Balance at September 30, 2018 $ 2,726 $ (56,461 ) $ (53,735 ) Changes in accumulated other comprehensive gain (loss), net of tax for the nine months ended September 30, 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 (loss) before reclassifications 1,712 (36,541 ) (34,829 ) Amount of gain reclassified from accumulated other comprehensive loss into the statement of operations (371 ) — (371 ) Net current period other comprehensive gain (loss), net of tax 1,341 (36,541 ) (35,200 ) Balance at September 30, 2018 $ 2,726 $ (56,461 ) $ (53,735 ) 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 amounts into net income (loss) as it makes interest payments on its term loan. Amounts to be reclassified to net income (loss) in the next 12 months are expected to be inconsequential. The tax effects allocated to each component of other comprehensive loss for the three months ended September 30, 2018 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ (4,163 ) $ 2,868 $ (1,295 ) Unrealized gain on derivative instruments: Unrealized gain arising during period 2,863 (466 ) 2,397 Reclassification adjustment for losses realized in net loss 236 (9 ) 227 Net unrealized gain on derivative instruments 3,099 (475 ) 2,624 Other comprehensive (loss) income $ (1,064 ) $ 2,393 $ 1,329 The tax effects allocated to each component of other comprehensive loss for the nine months ended September 30, 2018 were as follows (in thousands): Before-Tax Amount Tax Expense Net-of-Tax Amount Foreign currency translation adjustments $ (36,541 ) $ — $ (36,541 ) Unrealized gain on derivative instruments: Unrealized gain arising during period 2,178 (466 ) 1,712 Reclassification adjustment of realized gains to net loss (362 ) (9 ) (371 ) Net unrealized gain on derivative instruments 1,816 (475 ) 1,341 Other comprehensive loss $ (34,725 ) $ (475 ) $ (35,200 ) The tax effects allocated to each component of other comprehensive income for the three months ended September 30, 2017 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 10,499 $ (5,873 ) $ 4,626 Unrealized gain on derivative instruments: Unrealized gain arising during period 34 (14 ) 20 Reclassification adjustment for gains realized in net loss (221 ) 86 (135 ) Net unrealized loss on derivative instruments (187 ) 72 (115 ) Other comprehensive income $ 10,312 $ (5,801 ) $ 4,511 The tax effects allocated to each component of other comprehensive income for the nine months ended September 30, 2017 were as follows (in thousands): Before-Tax Amount Tax Expense Net-of-Tax Amount Foreign currency translation adjustments $ 22,831 $ (5,873 ) $ 16,958 Unrealized gain on derivative instruments: Unrealized gain arising during the period 67 (21 ) 46 Reclassification adjustment of realized gains to net loss (478 ) 184 (294 ) Net unrealized loss on derivative instruments (411 ) 163 (248 ) Other comprehensive income $ 22,420 $ (5,710 ) $ 16,710 Other (Expense) Income, Net Other (expense) income, net consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net realized foreign currency gain (loss) $ 1,978 $ (5,147 ) $ 2,146 $ (9,298 ) Net unrealized foreign currency (loss) gain (4,706 ) (381 ) 14,927 (6,264 ) Other, net (1,618 ) (425 ) (1,972 ) (602 ) Total other (expense) income, net $ (4,346 ) $ (5,953 ) $ 15,101 $ (16,164 ) |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations inVentiv Health Merger 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 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. 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 $54.1 million and $50.5 million as of September 30, 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 sheets. 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 fair value of the consideration transferred on the Merger Date was $4.51 billion . The following table summarizes the 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): Assets acquired: Cash and cash equivalents $ 57,338 Restricted cash 433 Accounts receivable 367,595 Unbilled accounts receivable 262,944 Other current assets 97,922 Property and equipment 114,041 Intangible assets 1,334,200 Other assets 50,052 Total assets acquired 2,284,525 Liabilities assumed: Accounts payable 38,072 Accrued liabilities 304,341 Contract liabilities 247,474 Capital leases 40,928 Long-term debt, current and non-current 737,872 Deferred income taxes, net 14,751 Other liabilities 119,480 Total liabilities assumed 1,502,918 Total identifiable assets acquired, net 781,607 Goodwill $ 3,724,016 The goodwill recognized in connection with the Merger was $3.72 billion , with $2.23 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. During the nine months ended September 30, 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 these adjustments resulted in a $9.5 million decrease in goodwill. 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 September 30, 2017 Nine Months Ended September 30, 2017 (In thousands, except per share data) Pro forma total revenue $ 1,025,942 $ 3,145,253 Pro forma net loss (85,223 ) (77,925 ) Pro forma loss per share: Basic $ (0.82 ) $ (0.75 ) Diluted $ (0.82 ) $ (0.75 ) 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. In addition, the unaudited pro forma net loss for the three and nine months ended September 30, 2017 was adjusted to exclude $68.2 million and $90.9 million , respectively, net of tax effects, of nonrecurring merger-related transaction costs. Kinapse Limited Acquisition In August 2018, the Company completed its acquisition of Kinapse Topco Limited (“Kinapse”), a provider of advisory and operational solutions to the global life sciences industry. The total purchase consideration was $100.1 million plus assumed debt and includes cash acquired of $4.9 million . The Company recognized $83.4 million of goodwill and $57.3 million of intangible assets, principally customer relationships, as a result of the acquisition. The goodwill is not deductible for income tax purposes. The Company’s assessment of fair value and the purchase price allocation related to this acquisition is preliminary and further adjustments may be necessary as additional information related to the fair values of assets acquired and liabilities assumed is assessed during the measurement period (up to one year from the acquisition date). The operating results from the Kinapse acquisition have been included in the Company’s Commercial Solutions segment from the date of acquisition. The unaudited pro forma financial information was not updated to include this acquisition as the impact would have been insignificant. |
Long-Term Debt Obligations
Long-Term Debt Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Obligations | Long-Term Debt Obligations The Company’s debt obligations consisted of the following (in thousands): September 30, 2018 December 31, 2017 Secured Debt Term Loan A due August 2022 $ 981,250 $ 1,000,000 Term Loan B due August 2024 1,251,000 1,550,000 Revolving credit facility due August 2022 — — Accounts receivable financing agreement due June 2020 183,600 — Total secured debt 2,415,850 2,550,000 Unsecured Debt 7.5% Senior Unsecured Notes due 2024 403,000 403,000 Total debt obligations 2,818,850 2,953,000 Add: unamortized Senior Notes premium, net of original issue debt discount 33,360 38,656 Less: unamortized deferred issuance costs (14,529 ) (20,722 ) Less: current portion of debt (62,050 ) (25,000 ) Total debt obligations, non-current portion $ 2,775,631 $ 2,945,934 During the nine months ended September 30, 2018 , the Company voluntarily prepaid $299.0 million towards reducing its outstanding Term Loan B balance, which was applied against the regularly-scheduled quarterly principal payments. As a result, the Company is not required to make a mandatory payment against the Term Loan B principal balance until maturity in August 2024. Additionally, during the nine months ended September 30, 2018 , the Company made mandatory principal repayments of $18.8 million towards its Term Loan A and settled $36.6 million of debt upon the closing of an acquisition. 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 “2017 Credit Agreement”), which, among other things, modified the terms of the 2017 Credit Agreement to: (i) reduce by 0.25% overall the applicable margins for alternate base rate (“Base Rate”) loans and Adjusted Eurocurrency Rate (“Eurocurrency Rate”) loans with respect to both Term Loan A and Term Loan B; and (ii) 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. The applicable margins with respect to Base Rate and Eurocurrency Rate borrowings are determined depending on the “First Lien Leverage Ratio” or the "Secured Net Leverage Ratio" (as defined in the Repricing Amendment) and range as follows: Base Rate Eurocurrency Rate Term Loan A 0.25 % - 0.50% 1.25 % - 1.50% Term Loan B 0.75 % - 1.00% 1.75 % - 2.00% Accounts Receivable Financing Agreement On June 29, 2018 the Company entered into an accounts receivable financing agreement ( as amended) with a termination date of June 29, 2020, unless terminated earlier pursuant to its terms. Under this agreement, certain of the Company’s consolidated subsidiaries will sell accounts receivable and unbilled services (including contract assets) balances to a wholly-owned, bankruptcy-remote special purpose entity (“SPE”). The SPE can borrow up to $250.0 million from a third-party lender, secured by liens on certain receivables and other assets of the SPE. The Company has guaranteed the performance of the obligations of existing and future subsidiaries that sell and service the accounts receivable under this agreement. The available borrowing capacity varies monthly according to the levels of the Company’s eligible accounts receivable and unbilled receivables. Loans under this agreement will accrue interest at a reserve-adjusted LIBOR rate or a base rate equal to the highest of (i) the applicable lender’s prime rate, and (ii) the federal funds rate plus 0.50% . The Company may prepay loans upon one business day prior notice and may terminate or reduce the facility limit of the accounts receivable financing agreement with 15 days ’ prior notice. As of September 30, 2018 , the Company had $183.6 million of outstanding borrowings under the accounts receivable financing agreement, which is recorded in the “Current portion of long term debt” and “Long term debt, noncurrent” line items on the accompanying unaudited condensed consolidated balance sheet. The remaining maximum capacity available for borrowing under this agreement was $66.4 million as of September 30, 2018 . |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments In May 2016, the Company entered into interest rate swaps with a combined notional value of $300.0 million in an effort to limit its exposure to variable interest rates on its Term Loans. Interest began accruing on the swaps on June 30, 2016 and a portion of the interest rate swaps expired on June 30, 2018, with the remainder expiring on May 14, 2020. As of September 30, 2018 , the remaining notional value of these interest rate swaps was $100.0 million . In June 2018, the Company entered into two new interest rate swaps with multiple counterparties in an effort to limit its exposure to variable interest rates on its Term Loans. The first interest rate swap has an aggregate notional value of $1.22 billion , began accruing interest on June 29, 2018, and will expire on December 31, 2018. As of September 30, 2018 , the remaining notional value of this interest rate swap was $1.07 billion . The second interest rate swap has an aggregate notional value of $1.01 billion , an effective date of December 31, 2018, and will expire on June 30, 2021. The material terms of these derivatives are substantially the same as those contained within the 2017 Credit Agreement, including monthly settlements with the swap counterparty. Interest rate swaps are designated as hedging instruments. The amounts of hedge ineffectiveness recorded in net loss during the three and nine months ended September 30, 2018 and September 30, 2017 were insignificant and were attributable to inconsistencies in certain terms between the interest rate swaps and the 2017 Credit Agreement. The Company became a party to certain foreign currency exchange rate forward contracts as a result of an acquisition that have expiration dates through April 2019. During the three and nine months ended September 30, 2018 , the amount of loss recognized in other income (expense), net with respect to these contracts was inconsequential. The fair values of the Company’s derivative financial instruments and the line items on the accompanying unaudited condensed consolidated balance sheets to which they were recorded are as follows (in thousands): Balance Sheet Classification September 30, 2018 December 31, 2017 Foreign currency exchange rate swaps - current Prepaid expenses and other current assets $ 138 $ — Interest rate swaps - current Prepaid expenses and other current assets $ 1,640 $ 916 Interest rate swaps - non-current Other long-term assets $ 3,365 $ 1,263 Interest rate swaps - current Accrued liabilities $ (1,028 ) $ — |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Carried at Fair Value As of September 30, 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 obligations, capital leases, liabilities under the accounts receivable financing agreement, and derivative instruments. The fair value of cash and cash equivalents, restricted cash, billed and unbilled accounts receivable, contract assets, accounts payable, accrued liabilities, contract liabilities, and the liabilities under the accounts receivable financing agreement 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 September 30, 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 $ 17,113 $ — $ — $ 17,113 Derivative instruments — 5,143 — 5,143 Total assets $ 17,113 $ 5,143 $ — $ 22,256 Liabilities: Derivative instruments $ — $ 1,028 $ — $ 1,028 Contingent obligations related to business combinations — — 58,530 58,530 Total liabilities $ — $ 1,028 $ 58,530 $ 59,558 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 obligations related to business combinations $ — $ — $ 50,480 $ 50,480 Total liabilities $ — $ — $ 50,480 $ 50,480 The following table presents changes in the carrying amount of obligations classified as Level 3 category within the fair value hierarchy for the nine months ended September 30, 2018 (in thousands): Balance at December 31, 2017 $ 50,480 Additions 4,353 Changes in fair value recognized in earnings 3,697 Balance at September 30, 2018 $ 58,530 During the nine months ended September 30, 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 September 30, 2018 and December 31, 2017 , assets subject to non-recurring fair value measurements totaled $5.54 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 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): September 30, 2018 December 31, 2017 Carrying Value (a) Estimated Fair Value Carrying Value (a) Estimated Fair Value Term Loan A due August 2022 $ 979,333 $ 981,250 $ 1,000,000 $ 1,000,000 Term Loan B due August 2024 $ 1,249,673 $ 1,251,000 $ 1,548,149 $ 1,550,000 7.5% Senior Unsecured Notes due 2024 $ 439,604 $ 429,195 $ 443,507 $ 433,729 (a) The carrying value of the term loan debt is shown net of original issue debt discounts. The carrying value of the 7.5% Senior Unsecured Notes is inclusive of unamortized premiums. |
Restructuring and Other Costs
Restructuring and Other Costs | 9 Months Ended |
Sep. 30, 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. During the nine months ended September 30, 2018 , the Company recognized approximately: (i) $13.2 million of employee severance and benefits related costs; (ii) $20.6 million of facility closure and lease termination costs; and (iii) $0.5 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 and related benefits 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 nine months ended September 30, 2018 , the Company incurred $1.4 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 nine months ended September 30, 2018 , the Company recognized: (i) approximately $3.2 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) $1.7 million of employee severance and benefits related costs; and (iii) $1.0 million of other restructuring costs. Accrued Restructuring Liabilities The following table summarizes activity related to the liabilities associated with restructuring and other costs during the nine months ended September 30, 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) 14,829 18,633 4,148 37,610 Cash payments made (18,208 ) (5,301 ) (4,594 ) (28,103 ) Balance at September 30, 2018 $ 5,479 $ 20,743 $ 78 $ 26,300 (a) The amount of expenses incurred presented in the reconciliation of accrued restructuring liabilities excludes $4.0 million of non-cash restructuring and other expenses incurred for the nine months ended September 30, 2018 because 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 September 30, 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 the three and nine months ended September 30, 2018 are presented in the “Restructuring and other costs” line item in the unaudited condensed consolidated statements of operations. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 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 . In April 2018, the Company repurchased 1,024,400 shares of its common stock in open market transactions at an average price of $36.60 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 September 30, 2018 , the Company has remaining authorization to repurchase up to approximately $175.0 million of shares of its common stock under the 2018 stock repurchase program. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 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 Restricted Stock Unit (“RSU”) activity during the nine months ended September 30, 2018 : Number of Shares Weighted Average Non-vested at December 31, 2017 907,580 $ 49.30 Granted 1,897,581 $ 38.55 Vested (242,315 ) $ 48.53 Forfeited (295,697 ) $ 45.10 Non-vested at September 30, 2018 2,267,149 $ 40.93 At September 30, 2018 , total unrecognized compensation expense related to unvested RSUs was $67.4 million , which is expected to be recognized over a weighted average period of 2.2 years . 2018 Performance-Based RSU Awards During 2018, the Compensation Committee of the Company’s Board of Directors granted performance-based RSU awards (“PRSUs”) to certain executive officers. The total target number of PRSUs granted was 198,382 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 approximately three years from the grant date and consists of three equal tranches with each tranche being 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 becomes probable. 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 September 30, Nine Months Ended September 30, Statement of Operations Classification 2018 2017 2018 2017 Direct costs $ 5,216 $ 5,388 $ 14,540 $ 11,055 Selling, general, and administrative expenses 4,575 2,165 11,414 8,546 Restructuring and other costs — — 91 — Transaction and integration-related expenses — 31,327 — 31,327 Total share-based compensation expense $ 9,791 $ 38,880 $ 26,045 $ 50,928 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 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 is as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net loss $ (10,394 ) $ (147,998 ) $ (21,386 ) $ (123,422 ) Denominator: Basic weighted average common shares outstanding 103,012 87,152 103,453 65,097 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — — — — Diluted weighted average common shares outstanding 103,012 87,152 103,453 65,097 Loss per share: Basic $ (0.10 ) $ (1.70 ) $ (0.21 ) $ (1.90 ) Diluted $ (0.10 ) $ (1.70 ) $ (0.21 ) $ (1.90 ) 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 a 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Anti-dilutive stock options and other awards 335 126 1,224 488 Anti-dilutive stock options and other awards under deferred share-based compensation programs excluded based on reporting a net loss for the period 1,621 1,534 1,208 1,275 Total common stock equivalents excluded from diluted earnings per share computation 1,956 1,660 2,432 1,763 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Expense For the three and nine months ended September 30, 2018 , the Company recorded income tax expense of $12.0 million and $19.1 million , compared to pre-tax income of $1.6 million and pre-tax loss of $2.3 million , respectively. The effective tax rate for the three and nine months ended September 30, 2018 varied from the U.S. federal statutory income tax rate of 21.0% primarily due to: (i) the recognition of unfavorable discrete adjustments related to foreign currency exchange; (ii) the geographical split of pre-tax income; and (iii) deferred expense related to hanging credits on domestic indefinite-lived intangibles. For the three and nine months ended September 30, 2017 , the Company recorded an income tax expense of $26.1 million and $30.2 million , respectively, compared to pre-tax losses of $121.9 million and $93.2 million , respectively. The Company’s effective tax rate for the three and nine months ended September 30, 2017 varied from the U.S. federal statutory income tax rate of 35.0% primarily due to: (i) a discrete tax expense related to a change in the Company’s method of accounting for undistributed foreign earnings; (ii) the relative amount of income from operations earned in international jurisdictions with lower statutory income tax rates than the United States; and (iii) discrete tax adjustments related to excess tax benefits on share-based compensation. Unrecognized Tax Benefits The Company's gross unrecognized tax benefits, exclusive of associated interest and penalties, were $19.7 million and $43.7 million as of September 30, 2018 and December 31, 2017 , respectively. The decrease of $24.0 million was primarily due to: (i) audit settlements in the United States and foreign jurisdictions, of which $1.4 million decreased tax expense; and (ii) remeasurement of acquired positions in relation to the Merger with inVentiv. The Company anticipates that during the next 12 months the unrecognized tax benefits will decrease by approximately $0.1 million . Tax Cuts and Jobs Act of 2017 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including requiring companies to pay a one-time transition tax on certain undistributed earnings of foreign subsidiaries. The deemed repatriation transition tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of the Company’s foreign subsidiaries. The Company was able to reasonably estimate the Transition Tax and recorded a provisional tax expense of $63.1 million for the year ended December 31, 2017 . During the nine months ended September 30, 2018 , the Company completed its accounting for the effects of the Transition Tax, with the exception of the state tax effects. On the basis of revised E&P computations that were completed during the reporting period, the final Transition Tax is $61.5 million . Due to the valuation allowance on the federal deferred tax assets, this decrease in the Transition Tax did not affect the 2018 effective tax rate for the period. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 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 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 and nine months ended September 30, 2018 reflect the application of ASC 606, while the reported results for the three and nine months ended September 30, 2017 were prepared under ASC 605 - Revenue Recognition and other authoritative guidance in effect for those periods. 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 Assets and Liabilities 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. Capitalized costs are included in the “Prepaid expenses and other current assets” and “Other long-term assets” line items of the accompanying unaudited condensed consolidated balance sheets. 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): September 30, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 19,003 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Amortization of capitalized costs $ 5,209 $ 12,911 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 (“FSP”) offering, Early Stage services, and Real World and Late Phase (“RWLP”) services. The services provided via the Full Service and RWLP platforms 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. Because 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 September 30, 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 $5.22 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, contracts that 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. During the three and nine months ended September 30, 2018 , the Company recognized approximately $363.7 million and $481.8 million , respectively, of revenue that was included in the contract liabilities balance at the beginning of the period. In order to determine revenue recognized in the period from contract liabilities, the Company first allocates revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. During the three and nine months ended September 30, 2018 , approximately $2.9 million and $(6.1) million of the Company’s revenue recognized was allocated to performance obligations partially satisfied in previous periods and predominately related to changes in scope and estimates in full service clinical studies. Changes in the contract assets and liabilities balances during the three and nine months ended September 30, 2018 were not materially impacted by any other factors. 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 and nine months ended September 30, 2018 to the amounts as if the previous revenue recognition guidance remained in effect for the three and nine months ended September 30, 2018 (in thousands, except per share amounts): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 ASC 606 ASC 605 ASC 606 ASC 605 Service revenue $ 1,114,918 $ 787,502 $ 3,244,644 $ 2,344,021 Reimbursable out-of-pocket expenses — 332,853 — 942,396 Total revenue 1,114,918 1,120,355 3,244,644 3,286,417 Direct costs (exclusive of depreciation and amortization) 539,570 539,239 1,619,620 1,624,249 Reimbursable out-of-pocket expenses 332,644 332,853 940,882 942,396 Selling, general, and administrative 96,943 97,737 296,420 298,266 Restructuring and other costs 19,349 19,349 41,647 41,647 Transaction and integration-related expenses 18,561 18,561 61,804 61,804 Depreciation 17,639 17,639 53,224 53,224 Amortization 50,395 50,395 150,333 150,333 Total operating expenses 1,075,101 1,075,773 3,163,930 3,171,919 Income (loss) from operations 39,817 44,582 80,714 114,498 Other expense, net: Interest income 1,004 1,004 3,498 3,498 Interest expense (33,097 ) (33,097 ) (97,727 ) (97,727 ) Loss on extinguishment of debt (1,789 ) (1,789 ) (3,914 ) (3,914 ) Other (expense) income, net (4,346 ) (4,346 ) 15,101 15,101 Total other expense, net (38,228 ) (38,228 ) (83,042 ) (83,042 ) Income (loss) before provision for income taxes 1,589 6,354 (2,328 ) 31,456 Income tax expense (11,983 ) (8,129 ) (19,058 ) (21,505 ) Net (loss) income (10,394 ) (1,775 ) (21,386 ) 9,951 Earnings (loss) per share attributable to common shareholders: Basic $ (0.10 ) $ (0.02 ) $ (0.21 ) $ 0.10 Diluted $ (0.10 ) $ (0.02 ) $ (0.21 ) $ 0.10 Weighted average common shares outstanding: Basic 103,012 103,012 103,453 103,453 Diluted 103,012 103,012 103,453 104,661 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 for the three and nine months ended September 30, 2018 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 for the nine months ended September 30, 2018 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. For the three months ended September 30, 2018 the recognition of revenue under ASC 606 and ASC 605 was comparatively similar. The following table compares the reported unaudited condensed consolidated balance sheet as of September 30, 2018 to the amounts as if the previous revenue recognition guidance remained in effect as of September 30, 2018 (in thousands): September 30, 2018 ASC 606 ASC 605 ASSETS Current assets: Cash and cash equivalents $ 132,402 $ 132,402 Restricted cash 2,202 2,202 Accounts receivable billed, net 656,682 656,682 Accounts receivable unbilled 347,894 496,003 Contract assets 136,824 — Prepaid expenses and other current assets 80,418 62,638 Total current assets 1,356,422 1,349,927 Property and equipment, net 175,128 175,128 Goodwill 4,352,825 4,352,825 Intangible assets, net 1,189,665 1,189,665 Deferred income tax assets 32,702 27,047 Other long-term assets 102,951 93,085 Total assets $ 7,209,693 $ 7,187,677 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 82,204 $ 82,204 Accrued liabilities 527,225 479,118 Contract liabilities 709,027 600,871 Current portion of capital lease obligations 16,603 16,603 Current portion of long-term debt 62,050 62,050 Total current liabilities 1,397,109 1,240,846 Capital lease obligations, non-current 21,568 21,568 Long-term debt, non-current 2,775,631 2,775,631 Deferred income tax liabilities 58,612 67,914 Other long-term liabilities 123,745 120,387 Total liabilities 4,376,665 4,226,346 Shareholders' equity: Preferred stock — — Common stock 1,032 1,032 Additional paid-in capital 3,390,734 3,390,734 Accumulated other comprehensive loss, net of tax (53,735 ) (55,585 ) Accumulated deficit (505,003 ) (374,850 ) Total shareholders' equity 2,833,028 2,961,331 Total liabilities and shareholders' equity $ 7,209,693 $ 7,187,677 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 greater than the total assets that would have been reported had the prior revenue recognition guidance remained in effect. This was largely due to 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 | 9 Months Ended |
Sep. 30, 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 comprises multiple similar service offerings that, when combined, create a fully integrated biopharmaceutical outsourcing 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, investor 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: Clinical Solutions service revenue $ 819,203 $ 432,780 $ 2,389,955 $ 937,781 Commercial Solutions service revenue 295,715 159,427 854,689 164,591 Total segment service revenue 1,114,918 592,207 3,244,644 1,102,372 Reimbursable out-of-pocket expenses not allocated to segments — 230,121 — 493,009 Total consolidated revenue $ 1,114,918 $ 822,328 $ 3,244,644 $ 1,595,381 Segment direct costs: Clinical Solutions $ 352,049 $ 284,872 $ 1,063,019 $ 591,383 Commercial Solutions 182,305 115,538 542,061 120,205 Total segment direct costs $ 534,354 $ 400,410 $ 1,605,080 $ 711,588 Reimbursable out-of-pocket expenses: Clinical Solutions $ 281,209 $ — $ 794,604 $ — Commercial Solutions 51,435 — 146,278 — Total segment reimbursable out-of-pocket expenses $ 332,644 $ — $ 940,882 $ — Segment selling, general, and administrative expenses: Clinical Solutions $ 63,707 $ 59,142 $ 197,764 $ 131,208 Commercial Solutions 22,182 18,113 63,368 18,113 Total segment selling, general, and administrative expenses $ 85,889 $ 77,255 $ 261,132 $ 149,321 Segment operating income: Clinical Solutions $ 122,238 $ 88,766 $ 334,568 $ 215,190 Commercial Solutions 39,793 25,776 102,982 26,273 Total segment operating income $ 162,031 $ 114,542 $ 437,550 $ 241,463 Operating expenses not allocated to segments: Reimbursable out-of-pocket expenses not allocated to segments $ — $ 230,121 $ — $ 493,009 Corporate selling, general, and administrative expenses not allocated to segments 6,479 9,435 23,874 18,453 Share-based compensation included in direct costs not allocated to segments 5,216 5,388 14,540 11,055 Share-based compensation included in selling, general, and administrative expenses not allocated to segments 4,575 2,165 11,414 8,546 Restructuring and other costs 19,349 6,670 41,647 12,626 Transaction and integration-related expenses 18,561 84,340 61,804 108,081 Asset impairment charges — 30,000 — 30,000 Depreciation and amortization 68,034 65,432 203,557 96,588 Total consolidated income (loss) from operations $ 39,817 $ (88,888 ) $ 80,714 $ (43,886 ) |
Operations by Geographic Locati
Operations by Geographic Location | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: North America (a) $ 761,414 $ 386,466 $ 2,219,725 $ 676,759 Europe, Middle East, and Africa 232,916 135,347 693,874 295,452 Asia-Pacific 97,726 56,421 269,353 98,862 Latin America 22,862 13,973 61,692 31,299 Total service revenue 1,114,918 592,207 3,244,644 1,102,372 Reimbursable-out-of-pocket expenses — 230,121 — 493,009 Total revenue $ 1,114,918 $ 822,328 $ 3,244,644 $ 1,595,381 (a) Service revenue for the North America region includes revenue attributable to the United States of $718.0 million and $370.5 million , or 64.4% and 62.6% of total service revenue, for the three months ended September 30, 2018 and September 30, 2017 , respectively. Service revenue for the North America region includes revenue attributable to the United States of $2,104.8 million and $646.8 million , or 64.9% and 58.7% of total service revenue, for the nine months ended September 30, 2018 and September 30, 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): September 30, 2018 December 31, 2017 Property and equipment, net: North America (a) $ 129,588 $ 136,101 Europe, Middle East and Africa 28,871 25,517 Asia-Pacific 12,862 14,700 Latin America 3,807 4,094 Total property and equipment, net $ 175,128 $ 180,412 (a) Long-lived assets for the North America region include property and equipment, net attributable to the United States of $123.5 million and $128.5 million as of September 30, 2018 and December 31, 2017 , respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 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 September 30, 2018 , the amount of cash and cash equivalents held outside the United States by the Company’s foreign subsidiaries was $77.5 million , or approximately 59% 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 approximately 60% of the total consolidated cash and cash equivalents balance. During the three and nine months ended September 30, 2018 , one customer accounted for approximately 12% and 11% , respectively, of the Company’s service revenue (including reimbursable out-of-pocket expenses as a result of the adoption of ASC 606 described in “Note 12 - Revenue from Contracts with Customers ”). During the three months ended September 30, 2017 , one customer accounted for 10% of the Company’s service revenue. No single customer accounted for greater than 10% of the Company’s service revenue for the nine months ended September 30, 2017 . As of September 30, 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 | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions For the three and nine months ended September 30, 2018 , the Company incurred reimbursable out-of-pocket expenses of $1.6 million and $2.8 million , respectively, for professional services obtained from two providers, one whose significant shareholder was also a significant shareholder of the Company and the other whose member of the Board of Directors was also a member of the Company’s Board of Directors. Additionally, at September 30, 2018 the Company had liabilities of $1.0 million included in the “Accounts Payable” and “Accrued Liabilities” line items on the unaudited condensed consolidated balance sheets associated with these related parties. For the three and nine months ended September 30, 2017 , 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 material related-party revenue was recorded for the three and nine months ended September 30, 2018 or 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 September 30, 2018 and December 31, 2017 , the total accrual for self-insurance reserves was $17.2 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 September 30, 2018 and December 31, 2017 , the estimated fair value of the assumed contingent tax-sharing obligations was $54.1 million and $50.5 million , respectively. For additional information, refer to “Note 3 - Business Combinations .” Contingent Earn-out Liability In connection with the Kinapse acquisition, the Company recorded a contingent earn out liability to be paid based on Kinapse meeting revenue targets as of March 31, 2021. The fair value of the earn out liability is remeasured at the end of each reporting period, with changes in the estimated fair value reflected in earnings until the liability is settled. The estimated fair value of the contingent earn out liability was $4.5 million as of September 30, 2018 and is included in the “Other long-term liabilities” line item of the accompanying unaudited condensed consolidated balance sheets. For additional information, refer to “Note 3 - Business Combinations .” |
Basis of Presentation and Cha_2
Basis of Presentation and Changes in Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 2018 reflect the application of ASC 606, while the reported results for the three and nine months ended September 30, 2017 were prepared under ASC 605, Revenue Recognition (“ASC 605”). For additional information related to the impact of adopting this standard, refer to “Note 12 - 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 insignificant 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 September 30, 2018 and December 31, 2017 , which sum to the total of such amounts in the consolidated statements of cash flows (in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 132,402 $ 321,262 Restricted cash 2,202 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 134,604 $ 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 of 2017 (“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 continues to evaluate the impact of adopting this standard on its accounting policies, financial statements, business processes, systems and internal controls. Additionally, the Company has established a project management and implementation team consisting of internal resources and external advisors. These evaluation and implementation processes are expected to continue through 2018. The Company expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. The Company plans to adopt the standard on January 1, 2019. |
Revenue from Contracts with Customers | Service Revenue The Company adopted ASC 606 - Revenue from Contracts with Customers and all 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 and nine months ended September 30, 2018 reflect the application of ASC 606, while the reported results for the three and nine months ended September 30, 2017 were prepared under ASC 605 - Revenue Recognition and other authoritative guidance in effect for those periods. 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 Assets and Liabilities 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. Capitalized costs are included in the “Prepaid expenses and other current assets” and “Other long-term assets” line items of the accompanying unaudited condensed consolidated balance sheets. 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): September 30, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 19,003 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Amortization of capitalized costs $ 5,209 $ 12,911 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 (“FSP”) offering, Early Stage services, and Real World and Late Phase (“RWLP”) services. The services provided via the Full Service and RWLP platforms 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. Because 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 September 30, 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 $5.22 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, contracts that 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. |
Basis of Presentation and Cha_3
Basis of Presentation and Changes in Significant Accounting Policies Basis of Presentation and Changes in Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2018 and December 31, 2017 , which sum to the total of such amounts in the consolidated statements of cash flows (in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 132,402 $ 321,262 Restricted cash 2,202 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 134,604 $ 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 September 30, 2018 and December 31, 2017 , which sum to the total of such amounts in the consolidated statements of cash flows (in thousands): September 30, 2018 December 31, 2017 Cash and cash equivalents $ 132,402 $ 321,262 Restricted cash 2,202 714 Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 134,604 $ 321,976 |
Financial Statement Details (Ta
Financial Statement Details (Tables) | 9 Months Ended |
Sep. 30, 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): September 30, 2018 December 31, 2017 Gross cash position $ 130,510 $ 195,376 Less: cash borrowings (105,708 ) (88,226 ) Net cash position $ 24,802 $ 107,150 |
Schedule of Billed Accounts Receivable, Net | Billed accounts receivable, net consisted of the following (in thousands): September 30, 2018 December 31, 2017 Accounts receivable billed $ 662,138 $ 652,061 Allowance for doubtful accounts (5,456 ) (9,076 ) Accounts receivable billed, net $ 656,682 $ 642,985 |
Schedule of Goodwill | Changes in the carrying amount of goodwill by segment for the nine months ended September 30, 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) 73,901 (5,692 ) 79,593 Impact of foreign currency translation (13,647 ) (12,950 ) (697 ) Balance at September 30, 2018: Gross carrying amount 4,368,991 2,790,333 1,578,658 Accumulated impairment losses (a) (16,166 ) (8,142 ) (8,024 ) Goodwill net of accumulated impairment losses $ 4,352,825 $ 2,782,191 $ 1,570,634 (a) Accumulated impairment losses associated with the Clinical Solutions segment were recorded 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 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 nine months ended September 30, 2018 . (b) Amount represents measurement period adjustments to goodwill recognized in connection with the Merger and goodwill recognized in connection with an acquisition. Goodwill associated with these transactions is not deductible for income tax purposes. Refer to “Note 3 - Business Combinations” for further information. |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): September 30, 2018 December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 1,489,824 $ (368,905 ) $ 1,120,919 $ 1,440,178 $ (266,158 ) $ 1,174,020 Acquired backlog 136,847 (86,329 ) 50,518 137,442 (42,095 ) 95,347 Trademarks 31,290 (13,062 ) 18,228 32,428 (15,745 ) 16,683 Total $ 1,657,961 $ (468,296 ) $ 1,189,665 $ 1,610,048 $ (323,998 ) $ 1,286,050 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): September 30, 2018 December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 1,489,824 $ (368,905 ) $ 1,120,919 $ 1,440,178 $ (266,158 ) $ 1,174,020 Acquired backlog 136,847 (86,329 ) 50,518 137,442 (42,095 ) 95,347 Trademarks 31,290 (13,062 ) 18,228 32,428 (15,745 ) 16,683 Total $ 1,657,961 $ (468,296 ) $ 1,189,665 $ 1,610,048 $ (323,998 ) $ 1,286,050 |
Schedule of Future Amortization Expense | The future estimated amortization expense for the Company’s intangible assets is expected to be as follows (in thousands): Fiscal Year Ending: 2018 (remaining 3 months) $ 51,280 2019 166,353 2020 149,620 2021 132,261 2022 126,856 2023 and thereafter 563,295 Total $ 1,189,665 |
Schedule of Accumulated Other Comprehensive Loss, Net of Taxes | Accumulated other comprehensive loss, net of tax, consisted of the following (in thousands): September 30, 2018 December 31, 2017 Foreign currency translation adjustments, net of tax $ (56,461 ) $ (23,514 ) Unrealized gains on derivative instruments, net of tax 2,726 1,129 Accumulated other comprehensive loss, net of tax $ (53,735 ) $ (22,385 ) Changes in accumulated other comprehensive gain (loss), net of tax for the three months ended September 30, 2018 were as follows (in thousands): Unrealized gain on derivative instruments, net of tax Foreign currency translation adjustments, net of tax Total Balance at June 30, 2018 $ 102 $ (55,166 ) $ (55,064 ) Other comprehensive gain (loss) before reclassifications 2,397 (1,295 ) 1,102 Amount of loss reclassified from accumulated other comprehensive loss into statement of operations 227 — 227 Net current period other comprehensive gain (loss), net of tax 2,624 (1,295 ) 1,329 Balance at September 30, 2018 $ 2,726 $ (56,461 ) $ (53,735 ) Changes in accumulated other comprehensive gain (loss), net of tax for the nine months ended September 30, 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 (loss) before reclassifications 1,712 (36,541 ) (34,829 ) Amount of gain reclassified from accumulated other comprehensive loss into the statement of operations (371 ) — (371 ) Net current period other comprehensive gain (loss), net of tax 1,341 (36,541 ) (35,200 ) Balance at September 30, 2018 $ 2,726 $ (56,461 ) $ (53,735 ) |
Reclassification out of Accumulated Other Comprehensive Loss | The tax effects allocated to each component of other comprehensive loss for the three months ended September 30, 2018 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ (4,163 ) $ 2,868 $ (1,295 ) Unrealized gain on derivative instruments: Unrealized gain arising during period 2,863 (466 ) 2,397 Reclassification adjustment for losses realized in net loss 236 (9 ) 227 Net unrealized gain on derivative instruments 3,099 (475 ) 2,624 Other comprehensive (loss) income $ (1,064 ) $ 2,393 $ 1,329 The tax effects allocated to each component of other comprehensive loss for the nine months ended September 30, 2018 were as follows (in thousands): Before-Tax Amount Tax Expense Net-of-Tax Amount Foreign currency translation adjustments $ (36,541 ) $ — $ (36,541 ) Unrealized gain on derivative instruments: Unrealized gain arising during period 2,178 (466 ) 1,712 Reclassification adjustment of realized gains to net loss (362 ) (9 ) (371 ) Net unrealized gain on derivative instruments 1,816 (475 ) 1,341 Other comprehensive loss $ (34,725 ) $ (475 ) $ (35,200 ) The tax effects allocated to each component of other comprehensive income for the three months ended September 30, 2017 were as follows (in thousands): Before-Tax Amount Tax (Expense) or Benefit Net-of-Tax Amount Foreign currency translation adjustments $ 10,499 $ (5,873 ) $ 4,626 Unrealized gain on derivative instruments: Unrealized gain arising during period 34 (14 ) 20 Reclassification adjustment for gains realized in net loss (221 ) 86 (135 ) Net unrealized loss on derivative instruments (187 ) 72 (115 ) Other comprehensive income $ 10,312 $ (5,801 ) $ 4,511 The tax effects allocated to each component of other comprehensive income for the nine months ended September 30, 2017 were as follows (in thousands): Before-Tax Amount Tax Expense Net-of-Tax Amount Foreign currency translation adjustments $ 22,831 $ (5,873 ) $ 16,958 Unrealized gain on derivative instruments: Unrealized gain arising during the period 67 (21 ) 46 Reclassification adjustment of realized gains to net loss (478 ) 184 (294 ) Net unrealized loss on derivative instruments (411 ) 163 (248 ) Other comprehensive income $ 22,420 $ (5,710 ) $ 16,710 |
Schedule of Other Expense, Net | Other (expense) income, net consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net realized foreign currency gain (loss) $ 1,978 $ (5,147 ) $ 2,146 $ (9,298 ) Net unrealized foreign currency (loss) gain (4,706 ) (381 ) 14,927 (6,264 ) Other, net (1,618 ) (425 ) (1,972 ) (602 ) Total other (expense) income, net $ (4,346 ) $ (5,953 ) $ 15,101 $ (16,164 ) |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Allocation of Consideration Transferred | The following table summarizes the 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): Assets acquired: Cash and cash equivalents $ 57,338 Restricted cash 433 Accounts receivable 367,595 Unbilled accounts receivable 262,944 Other current assets 97,922 Property and equipment 114,041 Intangible assets 1,334,200 Other assets 50,052 Total assets acquired 2,284,525 Liabilities assumed: Accounts payable 38,072 Accrued liabilities 304,341 Contract liabilities 247,474 Capital leases 40,928 Long-term debt, current and non-current 737,872 Deferred income taxes, net 14,751 Other liabilities 119,480 Total liabilities assumed 1,502,918 Total identifiable assets acquired, net 781,607 Goodwill $ 3,724,016 |
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 September 30, 2017 Nine Months Ended September 30, 2017 (In thousands, except per share data) Pro forma total revenue $ 1,025,942 $ 3,145,253 Pro forma net loss (85,223 ) (77,925 ) Pro forma loss per share: Basic $ (0.82 ) $ (0.75 ) Diluted $ (0.82 ) $ (0.75 ) |
Long-Term Debt Obligations (Tab
Long-Term Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The applicable margins with respect to Base Rate and Eurocurrency Rate borrowings are determined depending on the “First Lien Leverage Ratio” or the "Secured Net Leverage Ratio" (as defined in the Repricing Amendment) and range as follows: Base Rate Eurocurrency Rate Term Loan A 0.25 % - 0.50% 1.25 % - 1.50% Term Loan B 0.75 % - 1.00% 1.75 % - 2.00% The Company’s debt obligations consisted of the following (in thousands): September 30, 2018 December 31, 2017 Secured Debt Term Loan A due August 2022 $ 981,250 $ 1,000,000 Term Loan B due August 2024 1,251,000 1,550,000 Revolving credit facility due August 2022 — — Accounts receivable financing agreement due June 2020 183,600 — Total secured debt 2,415,850 2,550,000 Unsecured Debt 7.5% Senior Unsecured Notes due 2024 403,000 403,000 Total debt obligations 2,818,850 2,953,000 Add: unamortized Senior Notes premium, net of original issue debt discount 33,360 38,656 Less: unamortized deferred issuance costs (14,529 ) (20,722 ) Less: current portion of debt (62,050 ) (25,000 ) Total debt obligations, non-current portion $ 2,775,631 $ 2,945,934 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps Designated as Hedging Instruments on the Consolidated Balance Sheets | The fair values of the Company’s derivative financial instruments and the line items on the accompanying unaudited condensed consolidated balance sheets to which they were recorded are as follows (in thousands): Balance Sheet Classification September 30, 2018 December 31, 2017 Foreign currency exchange rate swaps - current Prepaid expenses and other current assets $ 138 $ — Interest rate swaps - current Prepaid expenses and other current assets $ 1,640 $ 916 Interest rate swaps - non-current Other long-term assets $ 3,365 $ 1,263 Interest rate swaps - current Accrued liabilities $ (1,028 ) $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | As of September 30, 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 $ 17,113 $ — $ — $ 17,113 Derivative instruments — 5,143 — 5,143 Total assets $ 17,113 $ 5,143 $ — $ 22,256 Liabilities: Derivative instruments $ — $ 1,028 $ — $ 1,028 Contingent obligations related to business combinations — — 58,530 58,530 Total liabilities $ — $ 1,028 $ 58,530 $ 59,558 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 obligations related to 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 obligations classified as Level 3 category within the fair value hierarchy for the nine months ended September 30, 2018 (in thousands): Balance at December 31, 2017 $ 50,480 Additions 4,353 Changes in fair value recognized in earnings 3,697 Balance at September 30, 2018 $ 58,530 |
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): September 30, 2018 December 31, 2017 Carrying Value (a) Estimated Fair Value Carrying Value (a) Estimated Fair Value Term Loan A due August 2022 $ 979,333 $ 981,250 $ 1,000,000 $ 1,000,000 Term Loan B due August 2024 $ 1,249,673 $ 1,251,000 $ 1,548,149 $ 1,550,000 7.5% Senior Unsecured Notes due 2024 $ 439,604 $ 429,195 $ 443,507 $ 433,729 (a) The carrying value of the term loan debt is shown net of original issue debt discounts. The carrying value of the 7.5% Senior Unsecured Notes is inclusive of unamortized premiums. |
Restructuring and Other Costs (
Restructuring and Other Costs (Tables) | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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) 14,829 18,633 4,148 37,610 Cash payments made (18,208 ) (5,301 ) (4,594 ) (28,103 ) Balance at September 30, 2018 $ 5,479 $ 20,743 $ 78 $ 26,300 (a) The amount of expenses incurred presented in the reconciliation of accrued restructuring liabilities excludes $4.0 million of non-cash restructuring and other expenses incurred for the nine months ended September 30, 2018 because these expenses were not subject to accrual prior to the period in which they were incurred. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Units Activity | The following table summarizes the Restricted Stock Unit (“RSU”) activity during the nine months ended September 30, 2018 : Number of Shares Weighted Average Non-vested at December 31, 2017 907,580 $ 49.30 Granted 1,897,581 $ 38.55 Vested (242,315 ) $ 48.53 Forfeited (295,697 ) $ 45.10 Non-vested at September 30, 2018 2,267,149 $ 40.93 |
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 September 30, Nine Months Ended September 30, Statement of Operations Classification 2018 2017 2018 2017 Direct costs $ 5,216 $ 5,388 $ 14,540 $ 11,055 Selling, general, and administrative expenses 4,575 2,165 11,414 8,546 Restructuring and other costs — — 91 — Transaction and integration-related expenses — 31,327 — 31,327 Total share-based compensation expense $ 9,791 $ 38,880 $ 26,045 $ 50,928 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 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 is as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net loss $ (10,394 ) $ (147,998 ) $ (21,386 ) $ (123,422 ) Denominator: Basic weighted average common shares outstanding 103,012 87,152 103,453 65,097 Effect of dilutive securities: Stock options and other awards under deferred share-based compensation programs — — — — Diluted weighted average common shares outstanding 103,012 87,152 103,453 65,097 Loss per share: Basic $ (0.10 ) $ (1.70 ) $ (0.21 ) $ (1.90 ) Diluted $ (0.10 ) $ (1.70 ) $ (0.21 ) $ (1.90 ) |
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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Anti-dilutive stock options and other awards 335 126 1,224 488 Anti-dilutive stock options and other awards under deferred share-based compensation programs excluded based on reporting a net loss for the period 1,621 1,534 1,208 1,275 Total common stock equivalents excluded from diluted earnings per share computation 1,956 1,660 2,432 1,763 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Capitalized costs and the related amortization | Capitalized costs and the related amortization are as follows (in thousands): September 30, 2018 Capitalized costs incurred to obtain or fulfill contracts with customers $ 19,003 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Amortization of capitalized costs $ 5,209 $ 12,911 |
Result of applying modified retrospective method to adopt new accounting guidance | The following table compares the reported unaudited condensed consolidated balance sheet as of September 30, 2018 to the amounts as if the previous revenue recognition guidance remained in effect as of September 30, 2018 (in thousands): September 30, 2018 ASC 606 ASC 605 ASSETS Current assets: Cash and cash equivalents $ 132,402 $ 132,402 Restricted cash 2,202 2,202 Accounts receivable billed, net 656,682 656,682 Accounts receivable unbilled 347,894 496,003 Contract assets 136,824 — Prepaid expenses and other current assets 80,418 62,638 Total current assets 1,356,422 1,349,927 Property and equipment, net 175,128 175,128 Goodwill 4,352,825 4,352,825 Intangible assets, net 1,189,665 1,189,665 Deferred income tax assets 32,702 27,047 Other long-term assets 102,951 93,085 Total assets $ 7,209,693 $ 7,187,677 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 82,204 $ 82,204 Accrued liabilities 527,225 479,118 Contract liabilities 709,027 600,871 Current portion of capital lease obligations 16,603 16,603 Current portion of long-term debt 62,050 62,050 Total current liabilities 1,397,109 1,240,846 Capital lease obligations, non-current 21,568 21,568 Long-term debt, non-current 2,775,631 2,775,631 Deferred income tax liabilities 58,612 67,914 Other long-term liabilities 123,745 120,387 Total liabilities 4,376,665 4,226,346 Shareholders' equity: Preferred stock — — Common stock 1,032 1,032 Additional paid-in capital 3,390,734 3,390,734 Accumulated other comprehensive loss, net of tax (53,735 ) (55,585 ) Accumulated deficit (505,003 ) (374,850 ) Total shareholders' equity 2,833,028 2,961,331 Total liabilities and shareholders' equity $ 7,209,693 $ 7,187,677 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 and nine months ended September 30, 2018 to the amounts as if the previous revenue recognition guidance remained in effect for the three and nine months ended September 30, 2018 (in thousands, except per share amounts): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 ASC 606 ASC 605 ASC 606 ASC 605 Service revenue $ 1,114,918 $ 787,502 $ 3,244,644 $ 2,344,021 Reimbursable out-of-pocket expenses — 332,853 — 942,396 Total revenue 1,114,918 1,120,355 3,244,644 3,286,417 Direct costs (exclusive of depreciation and amortization) 539,570 539,239 1,619,620 1,624,249 Reimbursable out-of-pocket expenses 332,644 332,853 940,882 942,396 Selling, general, and administrative 96,943 97,737 296,420 298,266 Restructuring and other costs 19,349 19,349 41,647 41,647 Transaction and integration-related expenses 18,561 18,561 61,804 61,804 Depreciation 17,639 17,639 53,224 53,224 Amortization 50,395 50,395 150,333 150,333 Total operating expenses 1,075,101 1,075,773 3,163,930 3,171,919 Income (loss) from operations 39,817 44,582 80,714 114,498 Other expense, net: Interest income 1,004 1,004 3,498 3,498 Interest expense (33,097 ) (33,097 ) (97,727 ) (97,727 ) Loss on extinguishment of debt (1,789 ) (1,789 ) (3,914 ) (3,914 ) Other (expense) income, net (4,346 ) (4,346 ) 15,101 15,101 Total other expense, net (38,228 ) (38,228 ) (83,042 ) (83,042 ) Income (loss) before provision for income taxes 1,589 6,354 (2,328 ) 31,456 Income tax expense (11,983 ) (8,129 ) (19,058 ) (21,505 ) Net (loss) income (10,394 ) (1,775 ) (21,386 ) 9,951 Earnings (loss) per share attributable to common shareholders: Basic $ (0.10 ) $ (0.02 ) $ (0.21 ) $ 0.10 Diluted $ (0.10 ) $ (0.02 ) $ (0.21 ) $ 0.10 Weighted average common shares outstanding: Basic 103,012 103,012 103,453 103,453 Diluted 103,012 103,012 103,453 104,661 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Information about reportable segment operating results is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: Clinical Solutions service revenue $ 819,203 $ 432,780 $ 2,389,955 $ 937,781 Commercial Solutions service revenue 295,715 159,427 854,689 164,591 Total segment service revenue 1,114,918 592,207 3,244,644 1,102,372 Reimbursable out-of-pocket expenses not allocated to segments — 230,121 — 493,009 Total consolidated revenue $ 1,114,918 $ 822,328 $ 3,244,644 $ 1,595,381 Segment direct costs: Clinical Solutions $ 352,049 $ 284,872 $ 1,063,019 $ 591,383 Commercial Solutions 182,305 115,538 542,061 120,205 Total segment direct costs $ 534,354 $ 400,410 $ 1,605,080 $ 711,588 Reimbursable out-of-pocket expenses: Clinical Solutions $ 281,209 $ — $ 794,604 $ — Commercial Solutions 51,435 — 146,278 — Total segment reimbursable out-of-pocket expenses $ 332,644 $ — $ 940,882 $ — Segment selling, general, and administrative expenses: Clinical Solutions $ 63,707 $ 59,142 $ 197,764 $ 131,208 Commercial Solutions 22,182 18,113 63,368 18,113 Total segment selling, general, and administrative expenses $ 85,889 $ 77,255 $ 261,132 $ 149,321 Segment operating income: Clinical Solutions $ 122,238 $ 88,766 $ 334,568 $ 215,190 Commercial Solutions 39,793 25,776 102,982 26,273 Total segment operating income $ 162,031 $ 114,542 $ 437,550 $ 241,463 Operating expenses not allocated to segments: Reimbursable out-of-pocket expenses not allocated to segments $ — $ 230,121 $ — $ 493,009 Corporate selling, general, and administrative expenses not allocated to segments 6,479 9,435 23,874 18,453 Share-based compensation included in direct costs not allocated to segments 5,216 5,388 14,540 11,055 Share-based compensation included in selling, general, and administrative expenses not allocated to segments 4,575 2,165 11,414 8,546 Restructuring and other costs 19,349 6,670 41,647 12,626 Transaction and integration-related expenses 18,561 84,340 61,804 108,081 Asset impairment charges — 30,000 — 30,000 Depreciation and amortization 68,034 65,432 203,557 96,588 Total consolidated income (loss) from operations $ 39,817 $ (88,888 ) $ 80,714 $ (43,886 ) |
Operations by Geographic Loca_2
Operations by Geographic Location (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: North America (a) $ 761,414 $ 386,466 $ 2,219,725 $ 676,759 Europe, Middle East, and Africa 232,916 135,347 693,874 295,452 Asia-Pacific 97,726 56,421 269,353 98,862 Latin America 22,862 13,973 61,692 31,299 Total service revenue 1,114,918 592,207 3,244,644 1,102,372 Reimbursable-out-of-pocket expenses — 230,121 — 493,009 Total revenue $ 1,114,918 $ 822,328 $ 3,244,644 $ 1,595,381 (a) Service revenue for the North America region includes revenue attributable to the United States of $718.0 million and $370.5 million , or 64.4% and 62.6% of total service revenue, for the three months ended September 30, 2018 and September 30, 2017 , respectively. Service revenue for the North America region includes revenue attributable to the United States of $2,104.8 million and $646.8 million , or 64.9% and 58.7% of total service revenue, for the nine months ended September 30, 2018 and September 30, 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): September 30, 2018 December 31, 2017 Property and equipment, net: North America (a) $ 129,588 $ 136,101 Europe, Middle East and Africa 28,871 25,517 Asia-Pacific 12,862 14,700 Latin America 3,807 4,094 Total property and equipment, net $ 175,128 $ 180,412 (a) Long-lived assets for the North America region include property and equipment, net attributable to the United States of $123.5 million and $128.5 million as of September 30, 2018 and December 31, 2017 , respectively. |
Basis of Presentation and Cha_4
Basis of Presentation and Changes in Significant Accounting Policies - Narrative (Details) $ in Millions | Jan. 01, 2018USD ($) | Sep. 30, 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 Cha_5
Basis of Presentation and Changes in Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||||
Cash and cash equivalents | $ 132,402 | $ 321,262 | $ 321,262 | ||
Restricted cash | 2,202 | $ 714 | 714 | ||
Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 134,604 | $ 321,976 | $ 305,528 | $ 103,078 |
Financial Statement Details - N
Financial Statement Details - Net Cash Pool Position (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gross cash position | $ 130,510 | $ 195,376 |
Less: cash borrowings | (105,708) | (88,226) |
Net cash position | $ 24,802 | $ 107,150 |
Financial Statement Details - B
Financial Statement Details - Billed Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | |||
Accounts receivable billed | $ 662,138 | $ 652,061 | |
Allowance for doubtful accounts | (5,456) | (9,076) | |
Accounts receivable billed, net | $ 656,682 | $ 642,985 | $ 642,985 |
Financial Statement Details -_2
Financial Statement Details - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade receivables sold | $ 197.4 | |
Proceeds from sale of trade receivables | $ 196.4 | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years |
Financial Statement Details - S
Financial Statement Details - Schedule of Goodwill (Details) | 9 Months Ended |
Sep. 30, 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 | 73,901,000 |
Impact of foreign currency translation | (13,647,000) |
Gross carrying amount, ending balance | 4,368,991,000 |
Accumulated impairment losses, ending balance | (16,166,000) |
Goodwill net of accumulated impairment losses, ending balance | 4,352,825,000 |
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 | (5,692,000) |
Impact of foreign currency translation | (12,950,000) |
Gross carrying amount, ending balance | 2,790,333,000 |
Accumulated impairment losses, ending balance | (8,142,000) |
Goodwill net of accumulated impairment losses, ending balance | 2,782,191,000 |
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 | 79,593,000 |
Impact of foreign currency translation | (697,000) |
Gross carrying amount, ending balance | 1,578,658,000 |
Accumulated impairment losses, ending balance | (8,024,000) |
Goodwill net of accumulated impairment losses, ending balance | $ 1,570,634,000 |
Financial Statement Details -_3
Financial Statement Details - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 1,657,961 | $ 1,610,048 |
Accumulated amortization | 468,296 | 323,998 |
Total | 1,189,665 | 1,286,050 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,489,824 | 1,440,178 |
Accumulated amortization | 368,905 | 266,158 |
Total | 1,120,919 | 1,174,020 |
Acquired backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 136,847 | 137,442 |
Accumulated amortization | 86,329 | 42,095 |
Total | 50,518 | 95,347 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 31,290 | 32,428 |
Accumulated amortization | 13,062 | 15,745 |
Total | $ 18,228 | $ 16,683 |
Financial Statement Details -_4
Financial Statement Details - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fiscal Year Ending: | ||
2018 (remaining 3 months) | $ 51,280 | |
2,019 | 166,353 | |
2,020 | 149,620 | |
2,021 | 132,261 | |
2,022 | 126,856 | |
2023 and thereafter | 563,295 | |
Total | $ 1,189,665 | $ 1,286,050 |
Financial Statement Details - A
Financial Statement Details - Accumulated Other Comprehensive Loss, Net of Taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustments, net of tax | $ (56,461) | $ (23,514) | |
Unrealized gains on derivative instruments, net of tax | 2,726 | 1,129 | |
Accumulated other comprehensive loss, net of tax | $ (53,735) | $ (22,385) | $ (22,385) |
Financial Statement Details -_5
Financial Statement Details - Summary of Changes of Reclassification out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | $ 3,022,579 | |||||
Other comprehensive gain (loss) before reclassifications | $ 1,102 | (34,829) | ||||
Amount of loss (gain) reclassified from accumulated other comprehensive loss into the statement of operations | 227 | (371) | ||||
Net current period other comprehensive income (loss), net of tax | 1,329 | $ 4,511 | (35,200) | $ 16,710 | ||
Balance at end of period | 2,833,028 | 2,833,028 | ||||
Total | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | (22,385) | |||||
Balance at January 1, 2018 | $ (55,064) | $ (18,535) | ||||
Balance at end of period | (53,735) | (53,735) | ||||
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 | 102 | 1,385 | ||||
Other comprehensive gain (loss) before reclassifications | 2,397 | 20 | 1,712 | 46 | ||
Amount of loss (gain) reclassified from accumulated other comprehensive loss into the statement of operations | 227 | (135) | (371) | (294) | ||
Net current period other comprehensive income (loss), net of tax | 2,624 | (115) | 1,341 | (248) | ||
Balance at end of period | 2,726 | 2,726 | ||||
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 | $ (55,166) | (19,920) | ||||
Other comprehensive gain (loss) before reclassifications | (1,295) | (36,541) | ||||
Amount of loss (gain) reclassified from accumulated other comprehensive loss into the statement of operations | 0 | 0 | ||||
Net current period other comprehensive income (loss), net of tax | (1,295) | $ 4,626 | (36,541) | $ 16,958 | ||
Balance at end of period | $ (56,461) | $ (56,461) | ||||
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gain arising during period, Net-of-Tax Amount | $ 1,102 | $ (34,829) | ||
Reclassification adjustment for losses (gains) realized in net loss, Net-of-Tax Amount | 227 | (371) | ||
Other comprehensive income (loss), Before-Tax Amount | (1,064) | $ 10,312 | (34,725) | $ 22,420 |
Other comprehensive income (loss), Tax (Expense) or Benefit | 2,393 | (5,801) | (475) | (5,710) |
Net current period other comprehensive income (loss), net of tax | 1,329 | 4,511 | (35,200) | 16,710 |
Foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gain arising during period, Net-of-Tax Amount | (1,295) | (36,541) | ||
Reclassification adjustment for losses (gains) realized in net loss, Net-of-Tax Amount | 0 | 0 | ||
Other comprehensive income (loss), Before-Tax Amount | (4,163) | 10,499 | (36,541) | 22,831 |
Other comprehensive income (loss), Tax (Expense) or Benefit | 2,868 | (5,873) | 0 | (5,873) |
Net current period other comprehensive income (loss), net of tax | (1,295) | 4,626 | (36,541) | 16,958 |
Unrealized (loss) gain on derivative instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gain arising during period, Before-Tax Amount | 2,863 | 34 | 2,178 | 67 |
Unrealized gain arising during period, Tax (Expense) or Benefit | (466) | (14) | (466) | (21) |
Unrealized gain arising during period, Net-of-Tax Amount | 2,397 | 20 | 1,712 | 46 |
Reclassification adjustment for losses (gains) realized in net loss, Before-Tax-Amount | 236 | (221) | (362) | (478) |
Reclassification adjustment for losses (gains) realized in net loss, Tax (Expense) or Benefit | (9) | 86 | (9) | 184 |
Reclassification adjustment for losses (gains) realized in net loss, Net-of-Tax Amount | 227 | (135) | (371) | (294) |
Other comprehensive income (loss), Before-Tax Amount | 3,099 | (187) | 1,816 | (411) |
Other comprehensive income (loss), Tax (Expense) or Benefit | (475) | 72 | (475) | 163 |
Net current period other comprehensive income (loss), net of tax | $ 2,624 | $ (115) | $ 1,341 | $ (248) |
Financial Statement Details - O
Financial Statement Details - Other Expense, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Net realized foreign currency gain (loss) | $ 1,978 | $ (5,147) | $ 2,146 | $ (9,298) |
Net unrealized foreign currency (loss) gain | (4,706) | (381) | 14,927 | (6,264) |
Other, net | (1,618) | (425) | (1,972) | (602) |
Total other (expense) income, net | $ (4,346) | $ (5,953) | $ 15,101 | $ (16,164) |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) | Aug. 01, 2017 | Aug. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 4,352,825,000 | $ 4,352,825,000 | $ 4,292,571,000 | $ 4,292,571,000 | ||||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | 73,901,000 | |||||||
Adjustment to unaudited pro forma net income | (10,394,000) | $ (147,998,000) | (21,386,000) | $ (123,422,000) | ||||
Merger-related Transaction Costs | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjustment to unaudited pro forma net income | $ 68,200,000 | |||||||
Clinical Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 2,782,191,000 | 2,782,191,000 | 2,800,833,000 | |||||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | (5,692,000) | |||||||
Commercial Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 1,570,634,000 | 1,570,634,000 | 1,491,738,000 | |||||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | 79,593,000 | |||||||
InVentiv Merger | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 4,510,000,000 | |||||||
Goodwill | 3,724,016,000 | |||||||
Net effect of adjustments to the preliminary fair value of acquired assets and assumed liabilities | (9,500,000) | |||||||
InVentiv Merger | Merger-related Transaction Costs | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjustment to unaudited pro forma net income | 90,900,000 | |||||||
InVentiv Merger | Clinical Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 2,230,000,000 | |||||||
InVentiv Merger | Commercial Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 1,490,000,000 | |||||||
InVentiv Merger | Contingent Tax-Sharing Obligation | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent tax-sharing obligation assumed through business combinations | $ 54,100,000 | $ 54,100,000 | $ 50,500,000 | |||||
Kinapse Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 100,100,000 | |||||||
Goodwill | 83,400,000 | |||||||
Cash acquired | 4,900,000 | |||||||
Intangible assets | 57,300,000 | |||||||
Goodwill deductible for income tax purposes | $ 0 |
Business Combinations - Allocat
Business Combinations - Allocation of Consideration Transferred (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Aug. 01, 2017 |
Liabilities assumed: | ||||
Goodwill | $ 4,352,825 | $ 4,292,571 | $ 4,292,571 | |
InVentiv Merger | ||||
Assets acquired: | ||||
Cash and cash equivalents | $ 57,338 | |||
Restricted cash | 433 | |||
Accounts receivable | 367,595 | |||
Unbilled accounts receivable | 262,944 | |||
Other current assets | 97,922 | |||
Property and equipment | 114,041 | |||
Intangible assets | 1,334,200 | |||
Other assets | 50,052 | |||
Total assets acquired | 2,284,525 | |||
Liabilities assumed: | ||||
Accounts payable | 38,072 | |||
Accrued liabilities | 304,341 | |||
Contract liabilities | 247,474 | |||
Capital leases | 40,928 | |||
Long-term debt, current and non-current | 737,872 | |||
Deferred income taxes, net | 14,751 | |||
Other liabilities | 119,480 | |||
Total liabilities assumed | 1,502,918 | |||
Total identifiable assets acquired, net | 781,607 | |||
Goodwill | $ 3,724,016 |
Business Combinations - Unaudit
Business Combinations - Unaudited Pro Forma Financial Information (Details) - InVentiv Merger - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||
Pro forma total revenue | $ 1,025,942 | $ 3,145,253 |
Pro forma net loss | $ (85,223) | $ (77,925) |
Pro forma loss per share: | ||
Basic (USD per share) | $ (0.82) | $ (0.75) |
Diluted (USD per share) | $ (0.82) | $ (0.75) |
Long-Term Debt Obligations - Sc
Long-Term Debt Obligations - Schedule of Debt Obligations (Details) - USD ($) | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Total debt obligations | $ 2,818,850,000 | $ 2,953,000,000 | |
Add: unamortized Senior Notes premium, net of original issue debt discount | 33,360,000 | 38,656,000 | |
Less: unamortized deferred issuance costs | (14,529,000) | (20,722,000) | |
Current portion of long-term debt | (62,050,000) | $ (25,000,000) | (25,000,000) |
Long-term debt, non-current | 2,775,631,000 | $ 2,945,934,000 | 2,945,934,000 |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 2,415,850,000 | 2,550,000,000 | |
Secured Debt | Term Loan A due August 2022 | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 981,250,000 | 1,000,000,000 | |
Secured Debt | Term Loan B due August 2024 | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 1,251,000,000 | 1,550,000,000 | |
Secured Debt | Revolving credit facility due August 2022 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 0 | 0 | |
Secured Debt | Accounts receivable financing agreement due June 2020 | Accounts Receivable Securitization | |||
Debt Instrument [Line Items] | |||
Total debt obligations | $ 183,600,000 | 0 | |
Unsecured Debt | 7.5% Senior Unsecured Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate | 7.50% | ||
Total debt obligations | $ 403,000,000 | $ 403,000,000 |
Long-Term Debt Obligations - Na
Long-Term Debt Obligations - Narrative (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | May 04, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||||
Repayments of long-term debt | $ 354,396 | $ 475,097 | ||
Wholly-owned Special Purpose Entity | ||||
Debt Instrument [Line Items] | ||||
Prepay notice, term | 1 day | |||
Termination or reduction to limit notice, term | 15 days | |||
Long-term Debt Acquired [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayments of long-term debt | 36,600 | |||
Secured Debt | Term Loan B due August 2024 | ||||
Debt Instrument [Line Items] | ||||
Repayments of long-term debt | 299,000 | |||
Secured Debt | Term Loan A due August 2022 | ||||
Debt Instrument [Line Items] | ||||
Repayments of long-term debt | 18,800 | |||
Secured Debt | Repricing Amendment, Term A Loan | ABR | ||||
Debt Instrument [Line Items] | ||||
Decrease to margin spread | 0.25% | |||
Secured Debt | Repricing Amendment, Term B Loan | ||||
Debt Instrument [Line Items] | ||||
Period from closing date in which prepayment premium is required for a repricing transaction | 6 months | |||
Secured Debt | Accounts receivable financing agreement due June 2020 | Accounts Receivable Securitization | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | 183,600 | |||
Secured Debt | Accounts receivable financing agreement due June 2020 | Wholly-owned Special Purpose Entity | Accounts Receivable Securitization | ||||
Debt Instrument [Line Items] | ||||
Remaining capacity available under accounts receivable financing agreement | 66,400 | |||
Maximum borrowing capacity under accounts receivable financing agreement | $ 250,000 | |||
Secured Debt | Accounts receivable financing agreement due June 2020 | Federal Funds Rate | Wholly-owned Special Purpose Entity | Accounts Receivable Securitization | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% |
Long-Term Debt Obligations - _2
Long-Term Debt Obligations - Schedule of Variable Rate Margins (Details) - Secured Debt | 9 Months Ended |
Sep. 30, 2018 | |
Repricing Amendment, Term A Loan | Base Rate [Member] | Minimum | |
Debt Instrument [Line Items] | |
Margin spread | 0.25% |
Repricing Amendment, Term A Loan | Base Rate [Member] | Maximum | |
Debt Instrument [Line Items] | |
Margin spread | 0.50% |
Repricing Amendment, Term A Loan | Eurocurrency Rate | Minimum | |
Debt Instrument [Line Items] | |
Margin spread | 1.25% |
Repricing Amendment, Term A Loan | Eurocurrency Rate | Maximum | |
Debt Instrument [Line Items] | |
Margin spread | 1.50% |
Repricing Amendment, Term B Loan | Base Rate [Member] | Minimum | |
Debt Instrument [Line Items] | |
Margin spread | 0.75% |
Repricing Amendment, Term B Loan | Base Rate [Member] | Maximum | |
Debt Instrument [Line Items] | |
Margin spread | 1.00% |
Repricing Amendment, Term B Loan | Eurocurrency Rate | Minimum | |
Debt Instrument [Line Items] | |
Margin spread | 1.75% |
Repricing Amendment, Term B Loan | Eurocurrency Rate | Maximum | |
Debt Instrument [Line Items] | |
Margin spread | 2.00% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($)interest_rate_swap | May 31, 2016USD ($) |
Derivative [Line Items] | |||
Number of new interest rate swaps | interest_rate_swap | 2 | ||
Interest Rate Swap | |||
Derivative [Line Items] | |||
Interest rate swaps, notional amount | $ 100,000,000 | $ 300,000,000 | |
Interest Rate Swap, expiring December 31, 2018 | |||
Derivative [Line Items] | |||
Interest rate swaps, notional amount | 1,070,000,000 | $ 1,220,000,000 | |
Interest Rate Swap, expiring June 30, 2021 | |||
Derivative [Line Items] | |||
Interest rate swaps, notional amount | $ 1,010,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments Derivative Financial Instruments - Interest Rate Swaps Designated as Hedging Instruments on Consolidated Balance Sheets (Details) - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Foreign Currency Exchange Rate Swap | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swaps - current | $ 138 | $ 0 |
Interest Rate Swap | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swaps - current | 1,640 | 916 |
Interest Rate Swap | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swaps - non-current | 3,365 | 1,263 |
Interest Rate Swap | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swaps - current | $ (1,028) | $ 0 |
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 | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Trading securities | $ 17,113 | $ 16,318 |
Derivative instruments | 5,143 | 2,179 |
Total assets | 22,256 | 18,497 |
Liabilities: | ||
Derivative instruments | 1,028 | |
Contingent obligations related to business combinations | 58,530 | 50,480 |
Total liabilities | 59,558 | 50,480 |
Level 1 | ||
Assets: | ||
Trading securities | 17,113 | 16,318 |
Derivative instruments | 0 | 0 |
Total assets | 17,113 | 16,318 |
Liabilities: | ||
Derivative instruments | 0 | |
Contingent obligations related to business combinations | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Trading securities | 0 | 0 |
Derivative instruments | 5,143 | 2,179 |
Total assets | 5,143 | 2,179 |
Liabilities: | ||
Derivative instruments | 1,028 | |
Contingent obligations related to business combinations | 0 | 0 |
Total liabilities | 1,028 | 0 |
Level 3 | ||
Assets: | ||
Trading securities | 0 | 0 |
Derivative instruments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Derivative instruments | 0 | |
Contingent obligations related to business combinations | 58,530 | 50,480 |
Total liabilities | $ 58,530 | $ 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 | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Balance at December 31, 2017 | $ 50,480 |
Additions | 4,353 |
Changes in fair value recognized in earnings | 3,697 |
Balance at September 30, 2018 | $ 58,530 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill and identifiable intangible assets | $ 5,540 | $ 5,580 |
7.5% Senior Unsecured Notes due 2024 | Unsecured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 7.50% |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
7.5% Senior Unsecured Notes due 2024 | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate | 7.50% | |
Level 2 | Carrying Value (a) | Term Loan A due August 2022 | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | $ 979,333 | $ 1,000,000 |
Level 2 | Carrying Value (a) | Term Loan B due August 2024 | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 1,249,673 | 1,548,149 |
Level 2 | Carrying Value (a) | 7.5% Senior Unsecured Notes due 2024 | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 439,604 | 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 | 981,250 | 1,000,000 |
Level 2 | Estimated Fair Value | Term Loan B due August 2024 | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 1,251,000 | 1,550,000 |
Level 2 | Estimated Fair Value | 7.5% Senior Unsecured Notes due 2024 | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 429,195 | $ 433,729 |
Restructuring and Other Costs -
Restructuring and Other Costs - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Employee Severance Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | $ 1.7 |
Facility Closure and Lease Termination Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 1.4 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 1 |
Consulting Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 3.2 |
InVentiv Merger | Employee Severance Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 13.2 |
InVentiv Merger | Facility Closure and Lease Termination Costs | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | 20.6 |
InVentiv Merger | Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges incurred | $ 0.5 |
Restructuring and Other Costs_2
Restructuring and Other Costs - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Reserve | ||||
Expenses incurred | $ 19,349 | $ 6,670 | $ 41,647 | $ 12,626 |
Other Costs | ||||
Restructuring Reserve | ||||
Other restructuring expenses, non-cash | 4,000 | |||
Business Restructuring Reserves | ||||
Restructuring Reserve | ||||
Balance at beginning of period | 16,793 | |||
Expenses incurred | 37,610 | |||
Cash payments made | (28,103) | |||
Balance at end of period | 26,300 | 26,300 | ||
Business Restructuring Reserves | Employee Severance Costs, Including Executive Transition Costs | ||||
Restructuring Reserve | ||||
Balance at beginning of period | 8,858 | |||
Expenses incurred | 14,829 | |||
Cash payments made | (18,208) | |||
Balance at end of period | 5,479 | 5,479 | ||
Business Restructuring Reserves | Facility Closure and Lease Termination Costs | ||||
Restructuring Reserve | ||||
Balance at beginning of period | 7,411 | |||
Expenses incurred | 18,633 | |||
Cash payments made | (5,301) | |||
Balance at end of period | 20,743 | 20,743 | ||
Business Restructuring Reserves | Other Costs | ||||
Restructuring Reserve | ||||
Balance at beginning of period | 524 | |||
Expenses incurred | 4,148 | |||
Cash payments made | (4,594) | |||
Balance at end of period | $ 78 | $ 78 |
Shareholders' Equity - Narrati
Shareholders' Equity - Narrative (Details) - USD ($) | 1 Months Ended | ||||
Apr. 30, 2018 | Mar. 31, 2018 | Sep. 30, 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) | 1,024,400 | 948,100 | |||
Stock repurchased, average price per share (USD per share) | $ 36.60 | $ 39.55 | |||
Stock repurchased, total purchase price | $ 37,500,000 | $ 37,500,000 | |||
Stock repurchase program, remaining authorization to repurchase | $ 175,000,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Non-vested at beginning of period (in shares) | shares | 907,580 |
Granted (in shares) | shares | 1,897,581 |
Vested (in shares) | shares | (242,315) |
Forfeited (in shares) | shares | (295,697) |
Non-vested at end of period (in shares) | shares | 2,267,149 |
Weighted Average Grant Date Fair Value | |
Non-vested at beginning of period (USD per share) | $ / shares | $ 49.30 |
Granted (USD per share) | $ / shares | 38.55 |
Vested (USD per share) | $ / shares | 48.53 |
Forfeited (USD per share) | $ / shares | 45.10 |
Non-vested at end of period (USD per share) | $ / shares | $ 40.93 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)trancheshares | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense related to unvested RSUs | $ | $ 67.4 |
Weighted average period for recognition | 2 years 2 months 12 days |
Number of shares granted (in shares) | 1,897,581 |
Performance-Based RSU Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted (in shares) | 198,382 |
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 - Su_2
Share-Based Compensation - Summary of Share-Based Compensation Expense Recognized in Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | $ 9,791 | $ 38,880 | $ 26,045 | $ 50,928 |
Direct costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 5,216 | 5,388 | 14,540 | 11,055 |
Selling, general, and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 4,575 | 2,165 | 11,414 | 8,546 |
Restructuring and other costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | 0 | 0 | 91 | 0 |
Transaction and integration-related expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based compensation expense | $ 0 | $ 31,327 | $ 0 | $ 31,327 |
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net loss | $ (10,394) | $ (147,998) | $ (21,386) | $ (123,422) |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
Effect of dilutive securities: | ||||
Stock options and other awards under deferred share-based compensation programs (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
Loss per share: | ||||
Basic (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Diluted (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Total common stock equivalents excluded from diluted earnings per share computation (in shares) | 1,956 | 1,660 | 2,432 | 1,763 |
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) | 335 | 126 | 1,224 | 488 |
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) | 1,621 | 1,534 | 1,208 | 1,275 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 11,983 | $ 26,124 | $ 19,058 | $ 30,217 | |
Income (loss) before provision for income taxes | 1,589 | $ (121,874) | (2,328) | $ (93,205) | |
Gross unrecognized tax benefits | 19,700 | 19,700 | $ 43,700 | ||
Decrease in unrecognized tax benefits, audit settlements and remeasurement of acquired positions | (24,000) | ||||
Decrease in tax expense, audit settlements | 1,400 | ||||
Decrease in unrecognized tax benefits, next 12 months | $ 100 | 100 | |||
Tax cuts and jobs act, provisional Transition Tax expense | $ 63,100 | ||||
Tax cuts and jobs act, Transition Tax expense | $ 61,500 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Capitalized Costs and Related Amortization (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized costs incurred to obtain or fulfill contracts with customers | $ 19,003 | $ 19,003 |
Amortization of capitalized costs | $ 5,209 | $ 12,911 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
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 | $ 5,220 | $ 5,220 |
Revenue recognized, included in contract liabilities balance at beginning of period | 363.7 | 481.8 |
Increase (decrease) in revenue recognized, allocated to performance obligation partially satisfied in previous periods | $ 2.9 | $ (6.1) |
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 C_5
Revenue from Contracts with Customers - Adjustments to Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 132,402 | $ 321,262 | $ 321,262 |
Restricted cash | 2,202 | 714 | 714 |
Accounts receivable billed, net | 656,682 | 642,985 | 642,985 |
Accounts receivable unbilled | 347,894 | 220,359 | 373,003 |
Contract assets | 136,824 | 94,567 | 0 |
Prepaid expenses and other current assets | 80,418 | 103,667 | 84,215 |
Total current assets | 1,356,422 | 1,383,554 | 1,422,179 |
Property and equipment, net | 175,128 | 180,412 | 180,412 |
Goodwill | 4,352,825 | 4,292,571 | 4,292,571 |
Intangible assets, net | 1,189,665 | 1,286,050 | 1,286,050 |
Deferred income tax assets | 32,702 | 26,016 | 20,159 |
Other long-term assets | 102,951 | 97,097 | 84,496 |
Total assets | 7,209,693 | 7,265,700 | 7,285,867 |
Current liabilities: | |||
Accounts payable | 82,204 | 58,575 | 58,575 |
Accrued liabilities | 527,225 | 549,914 | 500,303 |
Contract liabilities | 709,027 | 593,345 | 559,270 |
Current portion of capital lease obligations | 16,603 | 16,414 | 16,414 |
Current portion of long-term debt | 62,050 | 25,000 | 25,000 |
Total current liabilities | 1,397,109 | 1,243,248 | 1,159,562 |
Capital lease obligations, non-current | 21,568 | 20,376 | 20,376 |
Long-term debt, non-current | 2,775,631 | 2,945,934 | 2,945,934 |
Deferred income tax liabilities | 58,612 | 29,452 | 37,807 |
Other long-term liabilities | 123,745 | 102,926 | 99,609 |
Total liabilities | 4,376,665 | 4,341,936 | 4,263,288 |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 1,032 | 1,044 | 1,044 |
Additional paid-in capital | 3,390,734 | 3,414,389 | 3,414,389 |
Accumulated other comprehensive loss, net of tax | (53,735) | (22,385) | (22,385) |
Accumulated deficit | (505,003) | (469,284) | (370,469) |
Total shareholders' equity | 2,833,028 | 2,923,764 | 3,022,579 |
Total liabilities and shareholders' equity | 7,209,693 | 7,265,700 | 7,285,867 |
As Reported | |||
Current assets: | |||
Cash and cash equivalents | 132,402 | 321,262 | |
Restricted cash | 2,202 | 714 | |
Accounts receivable billed, net | 656,682 | 642,985 | |
Accounts receivable unbilled | 496,003 | 373,003 | |
Contract assets | 0 | 0 | |
Prepaid expenses and other current assets | 62,638 | 84,215 | |
Total current assets | 1,349,927 | 1,422,179 | |
Property and equipment, net | 175,128 | 180,412 | |
Goodwill | 4,352,825 | 4,292,571 | |
Intangible assets, net | 1,189,665 | 1,286,050 | |
Deferred income tax assets | 27,047 | 20,159 | |
Other long-term assets | 93,085 | 84,496 | |
Total assets | 7,187,677 | 7,285,867 | |
Current liabilities: | |||
Accounts payable | 82,204 | 58,575 | |
Accrued liabilities | 479,118 | 500,303 | |
Contract liabilities | 600,871 | 559,270 | |
Current portion of capital lease obligations | 16,603 | 16,414 | |
Current portion of long-term debt | 62,050 | 25,000 | |
Total current liabilities | 1,240,846 | 1,159,562 | |
Capital lease obligations, non-current | 21,568 | 20,376 | |
Long-term debt, non-current | 2,775,631 | 2,945,934 | |
Deferred income tax liabilities | 67,914 | 37,807 | |
Other long-term liabilities | 120,387 | 99,609 | |
Total liabilities | 4,226,346 | 4,263,288 | |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | |
Common stock | 1,032 | 1,044 | |
Additional paid-in capital | 3,390,734 | 3,414,389 | |
Accumulated other comprehensive loss, net of tax | (55,585) | (22,385) | |
Accumulated deficit | (374,850) | (370,469) | |
Total shareholders' equity | 2,961,331 | 3,022,579 | |
Total liabilities and shareholders' equity | $ 7,187,677 | $ 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 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 C_6
Revenue from Contracts with Customers - Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 1,114,918 | $ 822,328 | $ 3,244,644 | $ 1,595,381 |
Selling, general, and administrative | 96,943 | 88,855 | 296,420 | 176,320 |
Restructuring and other costs | 19,349 | 6,670 | 41,647 | 12,626 |
Transaction and integration-related expenses | 18,561 | 84,340 | 61,804 | 108,081 |
Depreciation | 17,639 | 14,049 | 53,224 | 26,279 |
Amortization | 50,395 | 51,383 | 150,333 | 70,309 |
Total operating expenses | 1,075,101 | 911,216 | 3,163,930 | 1,639,267 |
Income (loss) from operations | 39,817 | (88,888) | 80,714 | (43,886) |
Other expense, net: | ||||
Interest income | 1,004 | 501 | 3,498 | 765 |
Interest expense | (33,097) | (27,432) | (97,727) | (33,818) |
Loss on extinguishment of debt | (1,789) | (102) | (3,914) | (102) |
Other (expense) income, net | (4,346) | (5,953) | 15,101 | (16,164) |
Total other expense, net | (38,228) | (32,986) | (83,042) | (49,319) |
Income (loss) before provision for income taxes | 1,589 | (121,874) | (2,328) | (93,205) |
Income tax expense | (11,983) | (26,124) | (19,058) | (30,217) |
Net loss | $ (10,394) | $ (147,998) | $ (21,386) | $ (123,422) |
Earnings (loss) per share attributable to common shareholders: | ||||
Basic (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Diluted (USD per share) | $ (0.10) | $ (1.70) | $ (0.21) | $ (1.90) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
Diluted (in shares) | 103,012 | 87,152 | 103,453 | 65,097 |
ASC 605 As Adjusted | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 1,120,355 | $ 3,286,417 | ||
Selling, general, and administrative | 97,737 | 298,266 | ||
Restructuring and other costs | 19,349 | 41,647 | ||
Transaction and integration-related expenses | 18,561 | 61,804 | ||
Depreciation | 17,639 | 53,224 | ||
Amortization | 50,395 | 150,333 | ||
Total operating expenses | 1,075,773 | 3,171,919 | ||
Income (loss) from operations | 44,582 | 114,498 | ||
Other expense, net: | ||||
Interest income | 1,004 | 3,498 | ||
Interest expense | (33,097) | (97,727) | ||
Loss on extinguishment of debt | (1,789) | (3,914) | ||
Other (expense) income, net | (4,346) | 15,101 | ||
Total other expense, net | (38,228) | (83,042) | ||
Income (loss) before provision for income taxes | 6,354 | 31,456 | ||
Income tax expense | (8,129) | (21,505) | ||
Net loss | $ (1,775) | $ 9,951 | ||
Earnings (loss) per share attributable to common shareholders: | ||||
Basic (USD per share) | $ (0.02) | $ 0.10 | ||
Diluted (USD per share) | $ (0.02) | $ 0.10 | ||
Weighted average common shares outstanding: | ||||
Basic (in shares) | 103,012 | 103,453 | ||
Diluted (in shares) | 103,012 | 104,661 | ||
Service revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 1,114,918 | $ 592,207 | $ 3,244,644 | $ 1,102,372 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 539,570 | 405,798 | 1,619,620 | 722,643 |
Service revenue | ASC 605 As Adjusted | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 787,502 | 2,344,021 | ||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 539,239 | 1,624,249 | ||
Reimbursable out-of-pocket expenses | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 0 | 230,121 | 0 | 493,009 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 332,644 | $ 230,121 | 940,882 | $ 493,009 |
Reimbursable out-of-pocket expenses | ASC 605 As Adjusted | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 332,853 | 942,396 | ||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | $ 332,853 | $ 942,396 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 132,402 | $ 321,262 | $ 321,262 |
Restricted cash | 2,202 | 714 | 714 |
Accounts receivable billed, net | 656,682 | 642,985 | 642,985 |
Accounts receivable unbilled | 347,894 | 220,359 | 373,003 |
Contract assets | 136,824 | 94,567 | 0 |
Prepaid expenses and other current assets | 80,418 | 103,667 | 84,215 |
Total current assets | 1,356,422 | 1,383,554 | 1,422,179 |
Property and equipment, net | 175,128 | 180,412 | 180,412 |
Goodwill | 4,352,825 | 4,292,571 | 4,292,571 |
Intangible assets, net | 1,189,665 | 1,286,050 | 1,286,050 |
Deferred income tax assets | 32,702 | 26,016 | 20,159 |
Other long-term assets | 102,951 | 97,097 | 84,496 |
Total assets | 7,209,693 | 7,265,700 | 7,285,867 |
Current liabilities: | |||
Accounts payable | 82,204 | 58,575 | 58,575 |
Accrued liabilities | 527,225 | 549,914 | 500,303 |
Contract liabilities | 709,027 | 593,345 | 559,270 |
Current portion of capital lease obligations | 16,603 | 16,414 | 16,414 |
Current portion of long-term debt | 62,050 | 25,000 | 25,000 |
Total current liabilities | 1,397,109 | 1,243,248 | 1,159,562 |
Capital lease obligations, non-current | 21,568 | 20,376 | 20,376 |
Long-term debt, non-current | 2,775,631 | 2,945,934 | 2,945,934 |
Deferred income tax liabilities | 58,612 | 29,452 | 37,807 |
Other long-term liabilities | 123,745 | 102,926 | 99,609 |
Total liabilities | 4,376,665 | 4,341,936 | 4,263,288 |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 1,032 | 1,044 | 1,044 |
Additional paid-in capital | 3,390,734 | 3,414,389 | 3,414,389 |
Accumulated other comprehensive loss, net of tax | (53,735) | (22,385) | (22,385) |
Accumulated deficit | (505,003) | (469,284) | (370,469) |
Total shareholders' equity | 2,833,028 | 2,923,764 | 3,022,579 |
Total liabilities and shareholders' equity | 7,209,693 | $ 7,265,700 | 7,285,867 |
ASC 605 As Adjusted | |||
Current assets: | |||
Cash and cash equivalents | 132,402 | 321,262 | |
Restricted cash | 2,202 | 714 | |
Accounts receivable billed, net | 656,682 | 642,985 | |
Accounts receivable unbilled | 496,003 | 373,003 | |
Contract assets | 0 | 0 | |
Prepaid expenses and other current assets | 62,638 | 84,215 | |
Total current assets | 1,349,927 | 1,422,179 | |
Property and equipment, net | 175,128 | 180,412 | |
Goodwill | 4,352,825 | 4,292,571 | |
Intangible assets, net | 1,189,665 | 1,286,050 | |
Deferred income tax assets | 27,047 | 20,159 | |
Other long-term assets | 93,085 | 84,496 | |
Total assets | 7,187,677 | 7,285,867 | |
Current liabilities: | |||
Accounts payable | 82,204 | 58,575 | |
Accrued liabilities | 479,118 | 500,303 | |
Contract liabilities | 600,871 | 559,270 | |
Current portion of capital lease obligations | 16,603 | 16,414 | |
Current portion of long-term debt | 62,050 | 25,000 | |
Total current liabilities | 1,240,846 | 1,159,562 | |
Capital lease obligations, non-current | 21,568 | 20,376 | |
Long-term debt, non-current | 2,775,631 | 2,945,934 | |
Deferred income tax liabilities | 67,914 | 37,807 | |
Other long-term liabilities | 120,387 | 99,609 | |
Total liabilities | 4,226,346 | 4,263,288 | |
Shareholders' equity: | |||
Preferred stock | 0 | 0 | |
Common stock | 1,032 | 1,044 | |
Additional paid-in capital | 3,390,734 | 3,414,389 | |
Accumulated other comprehensive loss, net of tax | (55,585) | (22,385) | |
Accumulated deficit | (374,850) | (370,469) | |
Total shareholders' equity | 2,961,331 | 3,022,579 | |
Total liabilities and shareholders' equity | $ 7,187,677 | $ 7,285,867 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,114,918 | $ 822,328 | $ 3,244,644 | $ 1,595,381 |
Selling, general, and administrative expenses | 96,943 | 88,855 | 296,420 | 176,320 |
Operating income (loss) | 39,817 | (88,888) | 80,714 | (43,886) |
Share-based compensation expense | 9,791 | 38,880 | 26,045 | 50,928 |
Restructuring and other costs | 19,349 | 6,670 | 41,647 | 12,626 |
Transaction and integration-related expenses | 18,561 | 84,340 | 61,804 | 108,081 |
Asset impairment charges | 0 | 30,000 | 0 | 30,000 |
Direct costs | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | 5,216 | 5,388 | 14,540 | 11,055 |
Selling, general, and administrative expenses | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | 4,575 | 2,165 | 11,414 | 8,546 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Selling, general, and administrative expenses | 85,889 | 77,255 | 261,132 | 149,321 |
Operating income (loss) | 162,031 | 114,542 | 437,550 | 241,463 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Selling, general, and administrative expenses | 6,479 | 9,435 | 23,874 | 18,453 |
Restructuring and other costs | 19,349 | 6,670 | 41,647 | 12,626 |
Transaction and integration-related expenses | 18,561 | 84,340 | 61,804 | 108,081 |
Asset impairment charges | 0 | 30,000 | 0 | 30,000 |
Depreciation and amortization | 68,034 | 65,432 | 203,557 | 96,588 |
Corporate | Direct costs | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | 5,216 | 5,388 | 14,540 | 11,055 |
Corporate | Selling, general, and administrative expenses | ||||
Segment Reporting Information [Line Items] | ||||
Share-based compensation expense | 4,575 | 2,165 | 11,414 | 8,546 |
Clinical Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Selling, general, and administrative expenses | 63,707 | 59,142 | 197,764 | 131,208 |
Operating income (loss) | 122,238 | 88,766 | 334,568 | 215,190 |
Commercial Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Selling, general, and administrative expenses | 22,182 | 18,113 | 63,368 | 18,113 |
Operating income (loss) | 39,793 | 25,776 | 102,982 | 26,273 |
Service revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,114,918 | 592,207 | 3,244,644 | 1,102,372 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 539,570 | 405,798 | 1,619,620 | 722,643 |
Service revenue | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,114,918 | 592,207 | 3,244,644 | 1,102,372 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 534,354 | 400,410 | 1,605,080 | 711,588 |
Service revenue | Clinical Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 819,203 | 432,780 | 2,389,955 | 937,781 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 352,049 | 284,872 | 1,063,019 | 591,383 |
Service revenue | Commercial Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 295,715 | 159,427 | 854,689 | 164,591 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 182,305 | 115,538 | 542,061 | 120,205 |
Reimbursable out-of-pocket expenses | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 230,121 | 0 | 493,009 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 332,644 | 230,121 | 940,882 | 493,009 |
Reimbursable out-of-pocket expenses | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 332,644 | 0 | 940,882 | 0 |
Reimbursable out-of-pocket expenses | Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 230,121 | 0 | 493,009 |
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 0 | 230,121 | 0 | 493,009 |
Reimbursable out-of-pocket expenses | Clinical Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | 281,209 | 0 | 794,604 | 0 |
Reimbursable out-of-pocket expenses | Commercial Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Direct costs (exclusive of depreciation and amortization) and Reimbursable out-of-pocket expenses | $ 51,435 | $ 0 | $ 146,278 | $ 0 |
Operations by Geographic Loca_3
Operations by Geographic Location - Total Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues by Geographic Location | ||||
Revenue | $ 1,114,918 | $ 822,328 | $ 3,244,644 | $ 1,595,381 |
United States | Geographic Concentration Risk | Net Service Revenue | ||||
Revenues by Geographic Location | ||||
Concentration risk percentage | 64.40% | 62.60% | 64.90% | 58.70% |
Service revenue | ||||
Revenues by Geographic Location | ||||
Revenue | $ 1,114,918 | $ 592,207 | $ 3,244,644 | $ 1,102,372 |
Service revenue | North America | ||||
Revenues by Geographic Location | ||||
Revenue | 761,414 | 386,466 | 2,219,725 | 676,759 |
Service revenue | United States | ||||
Revenues by Geographic Location | ||||
Revenue | 718,000 | 370,500 | 2,104,800 | 646,800 |
Service revenue | Europe, Middle East, and Africa | ||||
Revenues by Geographic Location | ||||
Revenue | 232,916 | 135,347 | 693,874 | 295,452 |
Service revenue | Asia-Pacific | ||||
Revenues by Geographic Location | ||||
Revenue | 97,726 | 56,421 | 269,353 | 98,862 |
Service revenue | Latin America | ||||
Revenues by Geographic Location | ||||
Revenue | 22,862 | 13,973 | 61,692 | 31,299 |
Reimbursable out-of-pocket expenses | ||||
Revenues by Geographic Location | ||||
Revenue | $ 0 | $ 230,121 | $ 0 | $ 493,009 |
Operations by Geographic Loca_4
Operations by Geographic Location - Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 175,128 | $ 180,412 | $ 180,412 |
North America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 129,588 | 136,101 | |
United States | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 123,500 | 128,500 | |
Europe, Middle East, and Africa | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 28,871 | 25,517 | |
Asia-Pacific | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | 12,862 | 14,700 | |
Latin America | |||
Long-Lived Assets by Geographic Location | |||
Total property and equipment, net | $ 3,807 | $ 4,094 |
Concentration of Credit Risk -
Concentration of Credit Risk - Concentration of Cash Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Concentration Risk [Line Items] | |||||
Cash and cash equivalents | $ 132,402 | $ 132,402 | $ 321,262 | $ 321,262 | |
Geographic Concentration Risk | Cash and Cash Equivalents | Non-US | |||||
Concentration Risk [Line Items] | |||||
Cash and cash equivalents | $ 77,500 | $ 77,500 | $ 192,000 | ||
Concentration risk percentage | 59.00% | 60.00% | |||
Customer Concentration Risk | Total consolidated service revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12.00% | 10.00% | 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) - Affiliated Entity $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)Counterparty | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Counterparty | Sep. 30, 2017USD ($) | |
Related Party Transaction [Line Items] | ||||
Incurred professional services costs, related party | $ 1.6 | $ 0.2 | $ 2.8 | $ 0.2 |
Related party transactions, number of counterparties | Counterparty | 2 | 2 | ||
Liabilities, related party | $ 1 | $ 1 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Self-insurance reserves | $ 17,200 | $ 16,600 |
Recurring | ||
Loss Contingencies [Line Items] | ||
Contingent obligations related to business combinations | 58,530 | 50,480 |
InVentiv Merger | Recurring | ||
Loss Contingencies [Line Items] | ||
Contingent obligations related to business combinations | 54,100 | $ 50,500 |
Kinapse Acquisition | ||
Loss Contingencies [Line Items] | ||
Contingent obligations related to business combinations | $ 4,500 |