PRA Health Sciences (PRAH) 10-Q 29 Jul 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Document and Entity Information
Entity Registrant Name	PRA Health Sciences, Inc.
Entity Central Index Key	1,613,859
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		60,937,373
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 95,903	$ 121,065
Restricted cash	5,015	5,060
Accounts receivable and unbilled services, net	463,457	415,077
Other current assets	40,304	32,574
Total current assets	604,679	573,776
Fixed assets, net	87,974	80,691
Goodwill	991,886	1,014,798
Intangible assets, net	506,214	533,938
Other assets	27,827	25,540
Total assets	2,218,580	2,228,743
Current liabilities:
Accounts payable	54,713	57,096
Accrued expenses and other current liabilities	130,495	139,155
Advanced billings	337,487	333,729
Total current liabilities	522,695	529,980
Long-term debt, net	881,503	889,514
Other long-term liabilities	100,283	106,527
Total liabilities	1,504,481	1,526,021
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock, $0.01 par value, 1,000,000,000 authorized shares at June 30, 2016 and December 31, 2015; 60,914,218 and 60,245,009 issued and outstanding at June 30, 2016 and December 31, 2015, respectively	609	602
Additional paid-in capital	861,401	828,347
Accumulated other comprehensive loss	(176,692)	(132,307)
Retained earnings	28,781	6,080
Total stockholders' equity	714,099	702,722
Total liabilities and stockholders' equity	$ 2,218,580	$ 2,228,743

CONSOLIDATED CONDENSED BALANCE3

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
CONSOLIDATED CONDENSED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	60,914,218	60,245,009
Common stock, shares outstanding	60,914,218	60,245,009

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenue:
Service revenue	$ 394,249	$ 336,518	$ 766,569	$ 668,486
Reimbursement revenue	61,598	56,330	119,501	112,940
Total revenue	455,847	392,848	886,070	781,426
Operating expenses:
Direct costs	254,936	219,877	498,423	438,838
Reimbursable out-of-pocket costs	61,598	56,330	119,501	112,940
Selling, general and administrative	68,468	58,905	132,458	119,740
Transaction-related costs	2,869		31,785
Depreciation and amortization	17,585	19,220	34,538	38,455
Loss on disposal of fixed assets	43	195	71	195
Income from operations	50,348	38,321	69,294	71,258
Interest expense, net	(13,380)	(15,416)	(28,746)	(30,809)
Loss on extinguishment of debt			(21,485)
Foreign currency gains (losses), net	10,872	(3,966)	8,082	5,100
Other expense, net	(105)	(96)	(105)	(560)
Income before income taxes and equity in gains (losses) of unconsolidated joint ventures	47,735	18,843	27,040	44,989
Provision for income taxes	12,312	5,623	7,048	13,645
Income before equity in gains (losses) of unconsolidated joint ventures	35,423	13,220	19,992	31,344
Equity in gains (losses) of unconsolidated joint ventures, net of tax	3,247	(805)	2,709	(1,742)
Net income	$ 38,670	$ 12,415	$ 22,701	$ 29,602
Net income per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.64	$ 0.21	$ 0.38	$ 0.49
Diluted (in dollars per share)	$ 0.60	$ 0.20	$ 0.35	$ 0.47
Weighted average common shares outstanding:
Basic (in shares)	60,597	59,871	60,398	59,843
Diluted (in shares)	64,410	62,951	64,139	62,864

CONSOLIDATED CONDENSED STATEME5

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
Net income	$ 38,670	$ 12,415	$ 22,701	$ 29,602
Other comprehensive income (loss):
Foreign currency translation adjustments	(38,798)	30,233	(44,337)	(10,124)
Unrealized (losses) gains on derivative instruments, net of income tax expense (benefit) of $0, $0, $0, and ($700)	(428)	1,770	(2,070)	(4,468)
Reclassification adjustments:
Losses on derivatives included in net income, net of income taxes of $0, $0, $0, and $0	1,123	52	2,022	69
Comprehensive income (loss)	$ 567	$ 44,470	$ (21,684)	$ 15,079

CONSOLIDATED CONDENSED STATEME6

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
Unrealized (losses) gains on derivative instruments, tax	$ 0	$ 0	$ 0	$ (700)
Losses on derivatives included in net income, tax	$ 0	$ 0	$ 0	$ 0

CONSOLIDATED CONDENSED STATEME7

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 22,701	$ 29,602
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,538	38,455
Amortization of debt issuance costs and discount	2,343	3,286
Amortization of terminated interest rate swaps	2,022
Stock-based compensation	3,274	2,020
Non-cash transaction-related costs	29,421
Unrealized foreign currency gains	(8,851)	(8,079)
Loss on extinguishment of debt	3,661
Deferred income taxes	(9,696)	(2,395)
Equity in (gains) losses of unconsolidated joint ventures	(2,709)	1,742
Other reconciling items	121	1,401
Changes in operating assets and liabilities:
Accounts receivable, unbilled services, and advance billings	(47,447)	(65,550)
Other operating assets and liabilities	(22,604)	29,475
Net cash provided by operating activities	6,774	29,957
Cash flows from investing activities:
Purchase of fixed assets	(17,546)	(17,066)
Cash paid for interest on interest rate swap	(607)
Investment in unconsolidated joint venture		(3,000)
Proceeds from the sale of WuXiPRA	3,700
Acquisition of Value Health Solutions, Inc., net of cash acquired		(543)
Acquisition of Nextrials, Inc., net of cash acquired	(4,647)
Net cash used in investing activities	(19,100)	(20,609)
Cash flows from financing activities:
Proceeds from accounts receivable financing agreement	120,000
Repayment of senior notes	(133,559)
Repayment of term debt		(30,000)
Borrowings on line of credit	110,000	15,000
Repayments of line of credit	(110,000)	(15,000)
Payment of common stock issuance costs		(525)
Proceeds from stock options exercises	366	27
Payment of acquisition-related contingent consideration		(2,000)
Net cash used in financing activities	(13,193)	(32,498)
Effects of foreign exchange changes on cash and cash equivalents	357	(894)
Change in cash and cash equivalents	(25,162)	(24,044)
Cash and cash equivalents, beginning of period	121,065	85,192
Cash and cash equivalents, end of period	$ 95,903	$ 61,148
Non-cash investing activities:
Issuance of common stock for the acquisition of Value Health Solutions, Inc.		1,582

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Basis of Presentation
Basis of Presentation	(1) Basis of Presentation Unaudited Interim Financial Information The interim consolidated condensed financial statements include the accounts of PRA Health Sciences, Inc. and its subsidiaries, or the Company. These financial statements are prepared in conformity with U.S. generally accepted accounting principles, or GAAP, and are unaudited. In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The accompanying interim consolidated condensed financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The preparation of the interim consolidated condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated condensed financial statements and the reported amounts of revenues and claims and expenses during the reporting period. Actual results could differ from those estimates. The Company The Company is a full-service global contract research organization providing a broad range of product development services for pharmaceutical and biotechnology companies around the world. The Company’s integrated services include data management, statistical analysis, clinical trial management, and regulatory and drug development consulting. Variable Interest Entities Financial Accounting Standards Board, or FASB, accounting guidance concerning variable interest entities, or VIE, addresses the consolidation of a business enterprise to which the usual condition of consolidation (ownership of a majority voting interest) does not apply. This guidance focuses on controlling financial interests that may be achieved through arrangements that do not involve voting interests. The guidance requires an assessment of who the primary beneficiary is and whether the primary beneficiary should consolidate the VIE. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the variable interest entity that most significantly impacts the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Application of the VIE consolidation requirements may require the exercise of significant judgment by management. On March 22, 2016, the Company entered into a three-year accounts receivable financing agreement and related arrangements to securitize certain of its accounts receivable. Under the accounts receivable financing agreement, certain of the Company’s U.S. accounts receivable and unbilled services balances are sold by certain of its consolidated subsidiaries to another of its consolidated subsidiaries, a wholly-owned bankruptcy-remote special purpose entity, or SPE. The SPE in turn may borrow up to $140.0 million from a third party lender, secured by liens on the receivables and other assets of the SPE. The Company retains the servicing of the securitized accounts receivable portfolio and has a variable interest in the SPE by holding the residual equity. The Company determined that the SPE is a VIE and it is the primary beneficiary because (i) the Company’s servicing responsibilities for the securitized portfolio gives it the power to direct the activities that most significantly impact the performance of the VIE and (ii) its variable interest in the VIE gives it the obligation to absorb losses and the right to receive residual returns that could potentially be significant. As a result, the Company has consolidated the VIE within its financial statements. Refer to Note 8, Long-Term Debt , for additional information regarding the accounts receivable financing agreement. Recently Issued Accounting Pronouncements In May 2014, the FASB issued an Accounting Standards Update, or ASU, No. 2014-09, “Revenue from Contracts with Customers,” to clarify the principles of recognizing revenue and create common revenue recognition guidance between GAAP and International Financial Reporting Standards. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted only as of reporting periods beginning after December 15, 2016. The FASB issued ASU No. 2016-08, 2016-10, and 2016-12 in March, April, and May 2016, respectively, all of which amend the guidance in ASU No. 2014-09. ASU No. 2016-08 clarifies implementation guidance on principal versus agent considerations. ASU No. 2016-10 clarifies implementation guidance on identifying performance obligations and accounting for licenses of intellectual property. ASU No. 2016-12 does not change the core revenue recognition principles, but instead addresses certain issues identified in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, completed contracts and contract modifications at transition. The Company is currently assessing the potential impact of ASU No. 2014-09, 2016-08, 2016-10, and 2016-12 on the Company’s consolidated condensed financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which revises the accounting related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases with terms greater than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The provisions of ASU 2016-02 are effective for fiscal years beginning after December 15, 2018 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is currently assessing the potential impact of ASU No. 2016-02 on the Company’s consolidated condensed financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This update includes provisions intended to simplify various aspects of accounting for share-based compensation. ASU No. 2016-09 will take effect for public companies for the annual periods beginning after December 15, 2016. The adoption of this ASU is not expected to have a material effect on the consolidated condensed financial statements. Secondary Offerings In March and May 2016, KKR PRA Investors L.P., or KKR, and certain executive officers of the Company sold a total of 10,000,000 shares of the Company’s common stock as part of the secondary offerings, or, collectively, the Secondary Offerings. The Company incurred professional fees in connection with the Secondary Offerings of $0.3 million and $1.0 million during the three and six months ended June 30, 2016, respectively. The fees are included in transaction-related costs in the accompanying consolidated condensed statement of operations. As of June 30, 2016, KKR owned approximately 49.6% of the Company’s outstanding common stock.

Business Combinations

Business Combinations	6 Months Ended
	Jun. 30, 2016
Business Combination
Business Combinations	(2) Business Combination On March 18, 2016, the Company acquired all of the outstanding shares of Nextrials, Inc., or Nextrials, a developer of web-based software which integrates electronic health records with clinical trials, for $4.7 million in cash and contingent consideration in the form of potential earn-out payments of up to $3.0 million. Earn-out payments totaling $2.0 million and $1.0 million are contingent upon the achievement of project milestones and certain external software sales targets, respectively, during the 30-month period following closing. The Company recognized a liability of approximately $2.3 million as the estimated acquisition date fair value of the earn-out; $0.7 million is included in accrued expenses and other current liabilities and $1.6 million is included in other long-term liabilities in the consolidated condensed balance sheet as of June 30, 2016. The fair value of the contingent consideration was based on significant inputs not observed in the market and thus represented a Level 3 measurement. Changes in the fair value of the contingent consideration subsequent to the acquisition date are recognized in earnings in the period of the change. The fair value of the contingent consideration increased by $0.1 million for the three and six months ended June 30, 2016. With this acquisition, the Company expects to enhance its ability to serve customers throughout the clinical research process with technologies that include improved efficiencies by reducing study durations and costs through integrated operational management. The acquisition of Nextrials was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date. In connection with the acquisition, the Company recorded approximately $2.7 million of goodwill, which is not deductible for income tax purposes. The goodwill is attributable to the workforce of the acquired business and expected synergies with the Company’s existing information technology operations. Due to the timing of the acquisition, the valuation of net assets acquired has not been finalized and is expected to be completed by the end of September 2016, and in any case, no later than one year from the acquisition date in accordance with GAAP. The Company’s preliminary estimate of the purchase price allocation is as follows (in thousands): Purchase Weighted Price Amortization Allocation Period Cash and cash equivalents $ Accounts receivable Other current assets Property, plant and equipment Software intangible 5 years Accounts payable and accrued expenses ) Other long-term liabilities ) Estimated fair value of net assets acquired Purchase price, including contingent consideration and net of working capital settlement Total goodwill $ Pro forma information is not provided as the acquisition did not have a material effect on the Company’s consolidated results.

Joint Ventures

Joint Ventures	6 Months Ended
	Jun. 30, 2016
Joint Ventures
Joint Ventures	(3) Joint Ventures On May 6, 2016, the Company and WuXi AppTec (Shanghai) Co., Ltd. (“WuXi”) finalized an agreement to dissolve the WuXiPRA Clinical Research (Shanghai) Co., Ltd. joint venture. Under the agreement, the Company sold its 49% portion of the joint venture located in mainland China for $4.0 million, which subsequently became a wholly owned subsidiary of WuXi. The portion of the joint venture located in Hong Kong became a wholly owned subsidiary of the Company and was acquired for $0.3 million. In addition, the Company retained its Strategic Solutions business in China and Hong Kong. Upon termination, the Company and WuXi formed a preferred provider relationship under which WuXi will provide full-service clinical trial services for global clinical trials subcontracted by the Company in China. As a result of the transaction, the Company recognized a $3.3 million gain on the sale, which is recorded in the equity in gains (losses) of unconsolidated joint ventures in the accompanying consolidated condensed statement of operations.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2016
Fair Value Measurements
Fair Value Measurements	(4) Fair Value Measurements The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described below. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: · Level 1 — Quoted prices in active markets for identical assets or liabilities. · Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. · Level 3 — Unobservable inputs that are supported by little or no market activity. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The carrying amount of financial instruments, including cash and cash equivalents, accounts receivable, unbilled services, accounts payable and advanced billings, approximate fair value due to the short maturities of these instruments . Recurring Fair Value Measurements The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of June 30, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ $ — $ Contingent consideration — — Total $ — $ $ $ The interest rate swap is measured at fair value using a market approach valuation technique. The valuation is based on an estimate of net present value of the expected cash flows using relevant mid-market observable data inputs and based on the assumption of no unusual market conditions or forced liquidation. The Company values contingent consideration, related to business combinations, using a weighted probability of potential payment scenarios discounted at rates reflective of the weighted average cost of capital for the businesses acquired. Key assumptions used to estimate the fair value of contingent consideration include operational milestones and the probability of achieving the specific milestones. The following table summarizes the changes in Level 3 financial liabilities measured on a recurring basis for the six months ended June 30, 2016 (in thousands): Contingent Consideration - Accrued expenses and other long-term liabilities Balance at December 31, 2015 $ Initial estimate of Nextrials contingent consideration Revaluations included in earnings Balance at June 30, 2016 $ Non-recurring Fair Value Measurements Certain assets and liabilities are carried on the accompanying consolidated condensed balance sheets at cost and are not remeasured to fair value on a recurring basis. These assets include finite-lived intangible assets which are tested when a triggering event occurs and goodwill and identifiable indefinite-lived intangible assets which are tested for impairment annually on October 1 or when a triggering event occurs. As of June 30, 2016, assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaling approximately $1,498.1 million were identified as Level 3. These assets are comprised of goodwill of $991.9 million and identifiable intangible assets, net of $506.2 million. Refer to Note 8, Long-Term Debt, for additional information regarding the fair value of long-term debt balances.

Concentration of Credit Risk

Concentration of Credit Risk	6 Months Ended
	Jun. 30, 2016
Concentration of Credit Risk
Concentration of Credit Risk	(5) Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable, and unbilled services. As of June 30, 2016, substantially all of the Company’s cash and cash equivalents were held in or invested with large financial institutions. Accounts receivable include amounts due from pharmaceutical and biotechnology companies. The Company establishes an allowance for potentially uncollectible receivables. In management’s opinion, there is no additional material credit risk beyond amounts provided for such losses. Service revenue from individual customers greater than 10% of consolidated service revenue in the respective periods was as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Customer A — % — % Customer C % — % — Accounts receivable and unbilled receivables from individual customers that were equal to or greater than 10% of consolidated accounts receivable and unbilled receivables at the respective dates were as follows: June 30, December 31, 2016 2015 Customer A % % Customer B — %

Accounts Receivable and Unbille

Accounts Receivable and Unbilled Services	6 Months Ended
	Jun. 30, 2016
Accounts Receivable and Unbilled Services
Accounts Receivable and Unbilled Services	(6) Accounts Receivable and Unbilled Services Accounts receivable and unbilled services include service revenue, reimbursement revenue, and amounts associated with work performed by investigators. Accounts receivable and unbilled services were as follows (in thousands): June 30, December 31, 2016 2015 Accounts receivable $ $ Unbilled services Less allowance for doubtful accounts ) ) Total accounts receivable and unbilled services, net $ $

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets
Goodwill and Intangible Assets	(7) Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Balance at December 31, 2015 $ Nextrials acquisition Currency translation ) Balance at June 30, 2016 $ There are no accumulated impairment charges as of June 30, 2016 and December 31, 2015. Intangible Assets Intangible assets consist of the following (in thousands): June 30, December 31, 2016 2015 Customer relationships $ $ Customer backlog Trade names (definite-lived) Patient list and other intangibles Non-competition agreements Total finite-lived intangible assets, gross Accumulated amortization ) ) Total finite-lived intangible assets, net Trade names (indefinite-lived) Total intangible assets, net $ $ Amortization expense was $11.7 million and $23.0 million for the three and six months ended June 30, 2016, respectively, and $14.1 million and $28.2 million for the three and six months ended June 30, 2015, respectively. The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): 2016 (remaining) $ 2017 2018 2019 2020 2021 and thereafter Total $ The estimated fair value of the Early Development Services, or EDS, reporting unit closely approximated its carrying value when the Company performed its annual goodwill impairment test during the fourth quarter of 2014. The Company made operational improvements during 2015 in order to improve the profitability of the EDS reporting unit. As a result of these changes, EDS saw growth in both backlog and new business awards that contributed to its improved financial performance during the year and led the Company to update its forecast for future periods. The Company considered all of these factors when it performed its most recent goodwill impairment test during the fourth quarter of 2015 and it was concluded that the estimated fair value of the EDS reporting unit exceeded its carrying value by $48.9 million or 23%. Any negative changes in assumptions on revenue, new business awards, cancellations, or the Company’s ability to improve operations while maintaining a competitive cost structure could adversely affect the fair value of EDS and result in significant goodwill impairment charges in subsequent quarters during 2016.

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2016
Long-Term Debt
Long-Term Debt	(8) Long-Term Debt Long-term debt consists of the following (in thousands): June 30, December 31, 2016 2015 Term loans, first lien $ $ Senior notes Accounts receivable financing agreement — Less debt issuances costs and discount ) ) Total long-term debt, net $ $ Principal payments on long-term debt are due as follows (in thousands): 2016 (remaining) $ — 2017 — 2018 — 2019 2020 2021 and thereafter Total $ As collateral for borrowings under the credit agreement, or 2013 Credit Agreement, the Company granted a pledge on primarily all of its assets, and the stock of designated subsidiaries. The Company is subject to certain financial covenants, which require the Company to maintain certain debt-to-EBITDA ratios. The 2013 Credit Agreement also contains covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens, make investments, loans, guarantees or advances, make restricted junior payments, including dividends, redemptions of capital stock and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, enter into sale and leaseback transactions or engage in certain transactions with affiliates and otherwise restrict certain corporate activities. After giving effect to the applicable restrictions on the payment of dividends under the 2013 Credit Agreement, subject to compliance with applicable law, as of June 30, 2016 and December 31, 2015, there was approximately $14.4 million and $3.0 million, respectively, free of restriction, which was available for the payment of dividends. The Company does not expect to pay dividends in the foreseeable future. The Company does not expect these covenants to restrict its liquidity, financial condition or access to capital resources in the foreseeable future. The 2013 Credit Agreement also contains customary representations, warranties, affirmative covenants, and events of default. Revolving Credit Facilities The Company’s revolving credit facilities provide for $125.0 million of potential borrowings and expire on September 23, 2018. The interest rate on the revolving credit facilities is based on LIBOR plus an applicable rate, based on the leverage ratio of the Company. The Company, at its discretion, may choose interest periods of 1, 2, 3 or 6 months. In addition, the Company is required to pay to the lenders a commitment fee of 0.5% quarterly for unused commitments on the revolver, subject to a step-down to 0.375% based upon achievement of a certain leverage ratio. At June 30, 2016 and December 31 , 2015, the Company had no outstanding borrowings under the revolving credit facilities. In addition, at June 30, 2016 and December 31 , 2015, the Company had $4.0 million and $4.4 million, respectively, in letters of credit outstanding, which are secured by the revolving credit facilities. Senior Notes On March 17, 2016, the Company repaid $133.6 million aggregate principal amount of its 9.5% senior notes due 2023, or Senior Notes, as part of a cash tender offer. In accordance with the guidance in FASB’s Accounting Standards Codification, or ASC, No. 470-50, “Debt—Modifications and Extinguishments,” the debt repayment was accounted for as a partial debt extinguishment. The repayment resulted in a $21.5 million loss on extinguishment of debt, which consists of a $17.4 million early tender premium, a $3.7 million write-off of unamortized debt issuance costs and $0.4 million of fees associated with the transaction for the six months ended June 30, 2016. Accounts Receivable Financing Agreement In March 2016, the Company entered into a $140.0 million accounts receivable financing agreement, of which $120.0 million was outstanding as of June 30, 2016. The borrowings were used to repay amounts outstanding on the Company’s revolving credit facility that were used to fund the cash tender offer for the Senior Notes. Loans under the accounts receivable financing agreement accrue interest at either a reserve-adjusted LIBOR or a base rate, plus 1.6%. The Company may prepay loans upon one business day prior notice and may terminate the accounts receivable financing agreement with 15 days’ prior notice. As of June 30, 2016, the weighted average interest rate on the accounts receivable financing agreement was 2.23%. The accounts receivable financing agreement contains various customary representations and warranties and covenants, and default provisions which provide for the termination and acceleration of the commitments and loans under the agreement in circumstances including, but not limited to, failure to make payments when due, breach of representations, warranties or covenants, certain insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness. The accounts receivable financing agreement terminates on March 22, 2019, unless terminated earlier pursuant to its terms. At June 30, 2016, there was $20.0 million of remaining capacity available under the accounts receivable financing agreement. Fair Value of Debt The estimated fair value of borrowings under credit facilities and long-term debt was $906.5 million and $924.9 million at June 30, 2016 and December 31, 2015, respectively. The fair value of the Senior Notes, which totaled $99.2 million and $246.2 million at June 30, 2016 and December 31, 2015, respectively, was determined based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions. The fair value of the term loans, borrowings under credit facilities, and accounts receivable financing agreement which totaled $807.3 million and $678.7 million at June 30, 2016 and December 31, 2015, respectively, was determined based on Level 3 inputs, which is primarily based on rates at which the debt is traded among financial institutions adjusted for the Company’s credit standing.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity
Stockholders' Equity	(9) Stockholders’ Equity Authorized Shares The Company is authorized to issue up to one billion shares of common stock, with a par value of $0.01. The Company is authorized to issue up to one hundred million shares of preferred stock, with a par value of $0.01.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2016
Stock-Based Compensation
Stock-Based Compensation	(10) Stock-Based Compensation The Company granted 349,000 service-based options and 47,987 restricted stock awards, or RSAs, with a total grant date fair value of $5.2 million and $2.1 million, respectively, during the six months ended June 30, 2016. Aggregated information regarding the Company’s option plans is summarized below: Wtd. Average Remaining Options Wtd. Average Exercise Price Contractual Life (in years) Intrinsic Value (millions) Outstanding at December 31, 2015 $ $ Granted $ Exercised ) Expired/forfeited ) Outstanding at June 30, 2016 $ $ Exercisable at June 30, 2016 $ $ The Company’s RSAs and restricted stock units or, RSUs, collectively RSAs/RSUs, activity in 2016 is as follows: Awards Wtd. Average Grant-Date Fair Value Intrinsic Value (millions) Unvested at December 31, 2015 $ $ Granted Vested ) Unvested at June 30, 2016 $ $ Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Direct costs $ $ $ $ Selling, general and administrative Transaction-related costs — — Total stock-based compensation expense $ $ $ $ All stock options granted under the 2013 Stock Incentive Plan for Key Employees of PRA Health Sciences, Inc. and its Subsidiaries, or the Plan, are subject to transfer restrictions of the stock option’s underlying shares once vested and exercised. This lack of marketability was included as a discount when calculating the grant date value of these options. In conjunction with the Secondary Offerings, the transfer restrictions on a portion of such shares issuable upon exercise of vested options granted under the Plan were released. The release of the transfer restrictions is considered a modification under FASB’s ASC Topic 718, Stock Compensation. As a result of these modifications, the Company incurred approximately $1.9 million and $4.9 million of incremental compensation expense associated with service-based options during the three and six months ended June 30, 2016, respectively, which is included in transaction-related costs in the accompanying consolidated condensed statement of operations. In December 2013, the Company granted certain employees market-based options under the Plan that vest only upon the achievement of a specified internal rate of return from a liquidity event (“2.0x Options”). At the time of grant, no compensation expense was recorded as the 2.0x Options vest upon a liquidity event, which is not considered probable until the date it occurs. On January 20, 2016, the Compensation Committee of the Board of Directors adopted a resolution to adjust the vesting criteria for all 2.0x Options granted and still outstanding on such date. Under the revised vesting criteria, the 2.0x Options vest upon the announcement of a secondary offering. This modification resulted in Type IV Improbable-to-Improbable modification. Since the secondary offering was deemed improbable due to the fact that it is outside of the Company’s control and cannot be considered probable until the date it occurs, no compensation expense was recognized on the January 20, 2016 modification date. On March 2, 2016, the Company announced a secondary offering of shares by KKR and certain management stockholders, and it became probable that the 2.0x Options would vest. In total, 835,551 2.0x Options held by current employees were modified. As a result of this modification, and the modifications associated with the transfer restrictions releases noted above, the Company incurred approximately $0.7 million and $24.5 million of incremental compensation expense associated with the 2.0x Options during the three and six months ended June 30, 2016, respectively, which is included in transaction-related costs in the accompanying consolidated condensed statement of operations.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Taxes
Income Taxes	(11) Income Taxes The Company’s effective income tax rate was 26.1% and 30.3% for the six months ended June 30, 2016 and 2015, respectively. The variation between the Company’s effective income tax rate and the U.S. statutory rate of 35% for the six months ended June 30, 2016 is primarily due to (i) income from foreign subsidiaries being taxed at rates lower than the U.S. statutory rate and (ii) the favorable impact of research and development tax credits. GAAP requires a two-step approach when evaluating uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence demonstrates that it is more likely than not that the position will be sustained upon audit, including resolution of any related appeals or litigation processes. The second step is to quantify the amount of tax benefit to recognize as the amount that is cumulatively more than 50% likely to be realized upon ultimate settlement with the taxing authorities. As of June 30, 2016, the Company’s liability for unrecognized tax benefits was $11.3 million. If any portion of this $11.3 million is recognized that impacts the effective tax rate, the Company will then include that portion in the computation of its effective tax rate. Although the ultimate timing of the resolution of audits is highly uncertain, the Company believes it is reasonably possible that approximately $0.2 million of gross unrecognized tax benefits will change in the next 12 months as a result of pending audit settlements or statute of limitations expirations. The Company files U.S. federal, U.S. state, and foreign tax returns. For U.S. federal purposes, the Company is generally no longer subject to tax examinations for years ended December 31, 2011 and prior. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for years prior to 2011. For foreign purposes, the Company is generally no longer subject to examination for tax periods 2008 and prior. Certain carryforward tax attributes generated in prior years remain subject to examination and adjustment.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies
Commitments and Contingencies	(12) Commitments and Contingencies Legal Proceedings The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions. Although the outcome of such claims is uncertain, management believes that these legal proceedings will not have a material adverse effect on the financial condition or results of future operations of the Company. The Company is currently a party to litigation with the City of Sao Paulo, Brazil. The dispute relates to whether the export of services provided by the Company is subject to a local tax on services. The Company has not recorded a liability associated with the claim, which totaled $4.7 million at June 30, 2016, given that it is not deemed probable the Company will incur a loss related to this case. However, a deposit totaling $4.7 million has been made to the Brazilian court in order to annul the potential tax obligation and to avoid the accrual of additional interest and penalties. This balance is recorded in other assets on the consolidated condensed balance sheet. During June 2015, the Judiciary Court of Justice of the State of Sao Paulo ruled in the favor of the Company, however, the judgment was appealed by the City of Sao Paulo. The Company expects to recover the full amount of the deposit when the case is final.

Derivatives

Derivatives	6 Months Ended
	Jun. 30, 2016
Derivatives
Derivatives	(13) Derivatives The Company is exposed to certain risks relating to our ongoing business operations. The primary risk that the Company seeks to manage by using derivative instruments is interest rate risk. Accordingly, the Company has instituted interest rate hedging programs that are accounted for in accordance with ASC 815, “Derivatives and Hedging.” The interest rate hedging program is a cash flow hedge program designed to minimize interest rate volatility. The Company swaps the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount, at specified intervals. The Company’s interest rate contracts are designated as hedging instruments. The following table presents the notional amounts and fair values (determined using level 2 inputs) of our derivatives as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Balance Sheet Classification Notional amount Asset/ (Liability) Notional amount Asset/ (Liability) Derivatives in an asset position: Interest rate swap Other assets $ — $ — $ $ Derivatives in a liability position: Interest rate swap Other long-term liabilities ) — — The Company records the effective portion of any change in the fair value of derivatives designated as hedging instruments under ASC 815 to other accumulated comprehensive loss in our consolidated condensed balance sheet, net of deferred taxes, and will later reclassify into earnings when the hedged item affects earnings or is no longer expected to occur. Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately. For other derivative contracts that do not qualify or no longer qualify for hedge accounting, changes in the fair value of the derivatives are recognized in earnings each period. The table below presents the effect of our derivatives on the consolidated condensed statements of operations and comprehensive loss for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2016 2015 2016 2015 Amount of pre-tax (loss) gain recognized in other comprehensive loss on derivatives $ ) $ $ ) $ ) Amount of loss recognized in other expense, net on derivatives (ineffective portion) — ) — ) Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting) — ) — ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives ) ) ) ) The Company expects that $5.7 million of unrealized losses will be reclassified out of accumulated other comprehensive loss and into interest expense, net over the next 12 months.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2016
Related Party Transactions
Related Party Transactions	(14) Related Party Transactions At June 30, 2016 and December 31, 2015, KKR held $11.8 million and $14.7 million, respectively, in first lien term debt.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Jun. 30, 2016
Accumulated Other Comprehensive Loss.
Accumulated Other Comprehensive Loss	(15) Accumulated Other Comprehensive Loss Below is a summary of the components of accumulated other comprehensive loss (in thousands): Foreign Currency Translation Derivative Instruments Total Balance at December 31, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassifications, net of tax ) ) ) Reclassification adjustments, net of tax — Balance at June 30, 2016 $ ) $ ) $ ) The change in our foreign currency translation adjustment was due primarily to the movements in the British Pound exchange rates against the U. S. Dollar. The U. S. Dollar strengthened by 10.6% versus the British Pound between December 31, 2015 and June 30, 2016. The movement in the British Pound represented $50.8 million out of the $44.3 million foreign currency translation adjustment during the six months ended June 30, 2016. The remaining foreign currency translation adjustment is attributable to the U. S. Dollar’s depreciation against other major world-wide currencies, including the Euro and Russian Ruble.

Net Income Per Share

Net Income Per Share	6 Months Ended
	Jun. 30, 2016
Net Income Per Share
Net Income (Loss) Per Share	(16) Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the applicable period. Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive common shares, which, in the Company’s case, includes shares issuable under the stock option and incentive award plan. The following table reconciles the basic to diluted weighted average shares outstanding (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding Effect of dilutive stock options and RSAs/RSUs Diluted weighted average common shares outstanding Anti-dilutive shares The anti-dilutive shares disclosed above were calculated using the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of RSAs/RSUs, reduced by the repurchase of shares with the proceeds from the assumed exercises, and unrecognized compensation expense for outstanding awards.

Business Combination (Tables)

Business Combination (Tables)	6 Months Ended
	Jun. 30, 2016
Business Combination
Schedule of purchase price allocation	The Company’s preliminary estimate of the purchase price allocation is as follows (in thousands): Purchase Weighted Price Amortization Allocation Period Cash and cash equivalents $ Accounts receivable Other current assets Property, plant and equipment Software intangible 5 years Accounts payable and accrued expenses ) Other long-term liabilities ) Estimated fair value of net assets acquired Purchase price, including contingent consideration and net of working capital settlement Total goodwill $

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Measurements
Summary of the fair value of financial assets and liabilities measured on a recurring basis	The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of June 30, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ $ — $ Contingent consideration — — Total $ — $ $ $
Summary of the changes in Level 3 financial assets and liabilities measured on a recurring basis	The following table summarizes the changes in Level 3 financial liabilities measured on a recurring basis for the six months ended June 30, 2016 (in thousands): Contingent Consideration - Accrued expenses and other long-term liabilities Balance at December 31, 2015 $ Initial estimate of Nextrials contingent consideration Revaluations included in earnings Balance at June 30, 2016 $

Concentration of Credit Risk (T

Concentration of Credit Risk (Tables)	6 Months Ended
	Jun. 30, 2016
Service revenue
Concentration risk
Schedule of concentration of risk by risk factor	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Customer A — % — % Customer C % — % —
Accounts receivable and unbilled receivables
Concentration risk
Schedule of concentration of risk by risk factor	June 30, December 31, 2016 2015 Customer A % % Customer B — %

Accounts Receivable and Unbil27

Accounts Receivable and Unbilled Services (Tables)	6 Months Ended
	Jun. 30, 2016
Accounts Receivable and Unbilled Services
Schedule of accounts receivable and unbilled services	Accounts receivable and unbilled services were as follows (in thousands): June 30, December 31, 2016 2015 Accounts receivable $ $ Unbilled services Less allowance for doubtful accounts ) ) Total accounts receivable and unbilled services, net $ $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets
Schedule of changes in the carrying amount of goodwill	The changes in the carrying amount of goodwill are as follows (in thousands): Balance at December 31, 2015 $ Nextrials acquisition Currency translation ) Balance at June 30, 2016 $
Schedule of intangible assets	Intangible assets consist of the following (in thousands): June 30, December 31, 2016 2015 Customer relationships $ $ Customer backlog Trade names (definite-lived) Patient list and other intangibles Non-competition agreements Total finite-lived intangible assets, gross Accumulated amortization ) ) Total finite-lived intangible assets, net Trade names (indefinite-lived) Total intangible assets, net $ $
Schedule of estimated future amortization expense	The estimated future amortization expense of finite-lived intangible assets is expected to be as follows (in thousands): 2016 (remaining) $ 2017 2018 2019 2020 2021 and thereafter Total $

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Long-Term Debt
Schedule of long-term debt	Long-term debt consists of the following (in thousands): June 30, December 31, 2016 2015 Term loans, first lien $ $ Senior notes Accounts receivable financing agreement — Less debt issuances costs and discount ) ) Total long-term debt, net $ $
Schedule of principal payments on long-term debt due	Principal payments on long-term debt are due as follows (in thousands): 2016 (remaining) $ — 2017 — 2018 — 2019 2020 2021 and thereafter Total $

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2016
Stock-Based Compensation
Summary of stock option activity	Wtd. Average Remaining Options Wtd. Average Exercise Price Contractual Life (in years) Intrinsic Value (millions) Outstanding at December 31, 2015 $ $ Granted $ Exercised ) Expired/forfeited ) Outstanding at June 30, 2016 $ $ Exercisable at June 30, 2016 $ $
Schedule of RSA/RSU activity	Awards Wtd. Average Grant-Date Fair Value Intrinsic Value (millions) Unvested at December 31, 2015 $ $ Granted Vested ) Unvested at June 30, 2016 $ $
Schedule of stock-based compensation expense	Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Direct costs $ $ $ $ Selling, general and administrative Transaction-related costs — — Total stock-based compensation expense $ $ $ $

Derivatives (Tables)

Derivatives (Tables)	6 Months Ended
	Jun. 30, 2016
Derivatives
Schedule of notional amounts and fair values (determined using level 2 inputs) of derivatives	The following table presents the notional amounts and fair values (determined using level 2 inputs) of our derivatives as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Balance Sheet Classification Notional amount Asset/ (Liability) Notional amount Asset/ (Liability) Derivatives in an asset position: Interest rate swap Other assets $ — $ — $ $ Derivatives in a liability position: Interest rate swap Other long-term liabilities ) — —
Schedule of the effect of derivatives on the condensed consolidated statements of operations and comprehensive loss	The table below presents the effect of our derivatives on the consolidated condensed statements of operations and comprehensive loss for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2016 2015 2016 2015 Amount of pre-tax (loss) gain recognized in other comprehensive loss on derivatives $ ) $ $ ) $ ) Amount of loss recognized in other expense, net on derivatives (ineffective portion) — ) — ) Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting) — ) — ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives ) ) ) )

Accumulated Other Comprehensi32

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Jun. 30, 2016
Accumulated Other Comprehensive Loss.
Summary of components of accumulated other comprehensive loss	Below is a summary of the components of accumulated other comprehensive loss (in thousands): Foreign Currency Translation Derivative Instruments Total Balance at December 31, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassifications, net of tax ) ) ) Reclassification adjustments, net of tax — Balance at June 30, 2016 $ ) $ ) $ )

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Net Income Per Share
Schedule of weighted average basic and diluted common shares	The following table reconciles the basic to diluted weighted average shares outstanding (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Basic weighted average common shares outstanding Effect of dilutive stock options and RSAs/RSUs Diluted weighted average common shares outstanding Anti-dilutive shares

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Millions	Mar. 22, 2016	Jun. 30, 2016	May 31, 2016	Jun. 30, 2016
Common stock
Percentage of common stock owned by KKR				49.60%
Secondary Offerings | Common stock
Stock issued (in shares)			10,000,000
Professional Fees		$ 0.3		$ 1
Accounts Receivable Financing Agreement
Term of accounts receivable financing agreement and related arrangements to securitize accounts receivable	3 years
Maximum borrowing capacity	$ 140

Business Combination (Details)

Business Combination (Details) - USD ($) $ in Thousands	Mar. 18, 2016	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Preliminary estimate of purchase price allocation
Total goodwill		$ 991,886	$ 991,886	$ 1,014,798
Nextrials, Inc
Business Combination
Acquisition of business	$ 4,700
Potential contingent earn-out payments	3,000
Potential contingent earn-out payments based on milestones	2,000
Potential contingent earn-out payments based on sales targets	$ 1,000
Earn-out period for contingent consideration	30 months
Goodwill not deductible for tax purposes	$ 2,700
Preliminary estimate of purchase price allocation
Cash and cash equivalents	94
Accounts receivable	211
Other current assets	96
Property, plant and equipment	111
Accounts payable and accrued expenses	(1,385)
Other long-term liabilities	(11)
Estimated fair value of net assets acquired	4,690
Purchase price, including contingent consideration	7,345
Total goodwill	2,655
Nextrials, Inc | Level 3
Business Combination
Contingent liability recognized	2,300
Contingent liability, current		700	700
Contingent liability, noncurrent		1,600	1,600
Increase in fair value of contingent consideration		$ 100	$ 100
Nextrials, Inc | Software intangible
Preliminary estimate of purchase price allocation
Software intangible	$ 5,574
Weighted Amortization Period	5 years

Joint Ventures (Details)

Joint Ventures (Details) - USD ($) $ in Thousands	May 06, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Joint Ventures
Proceeds from the sale of WuXiPRA				$ 3,700
Gain on sale of interest in joint venture		$ 3,247	$ (805)	$ 2,709	$ (1,742)
CHINA
Joint Ventures
Equity interest percentage of ownership	49.00%
Proceeds from the sale of WuXiPRA	$ 4,000
HONG KONG
Joint Ventures
Payments to Acquire Businesses, Gross	300
PRA-WuXi Joint Venture
Joint Ventures
Gain on sale of interest in joint venture	$ 3,300

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring $ in Thousands	Jun. 30, 2016USD ($)
Liabilities:
Total	$ 5,376
Interest rate swap
Liabilities:
Total	2,042
Contingent consideration
Liabilities:
Total	3,334
Level 2
Liabilities:
Total	2,042
Level 2 | Interest rate swap
Liabilities:
Total	2,042
Level 3
Liabilities:
Total	3,334
Level 3 | Contingent consideration
Liabilities:
Total	$ 3,334

Fair Value Measurements - Level

Fair Value Measurements - Level 3 (Details) - Recurring - Level 3 - Contingent consideration $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Changes in the fair value of the Company's Level 3 financial liabilities
Beginning balance	$ 999
Initial estimate of Nextrials contingent consideration	2,282
Revaluations included in earnings	53
Ending balance	$ 3,334

Fair Value Measurements - Non-r

Fair Value Measurements - Non-recurring Fair Value Measurements (Details) - Nonrecurring - Level 3 $ in Millions	Jun. 30, 2016USD ($)
Assets fair value measurements
Assets fair value	$ 1,498.1
Goodwill	991.9
Identifiable intangible assets	$ 506.2

Concentration of Credit Risk (D

Concentration of Credit Risk (Details) - Customer Concentration Risk	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Service revenue | Customer A
Concentration risk
Concentration risk percentage		10.30%		10.90%
Service revenue | Customer C
Concentration risk
Concentration risk percentage	11.00%		10.30%
Accounts receivable and unbilled receivables | Customer A
Concentration risk
Concentration risk percentage			11.70%		13.40%
Accounts receivable and unbilled receivables | Customer B
Concentration risk
Concentration risk percentage					10.10%

Accounts Receivable and Unbil41

Accounts Receivable and Unbilled Services (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts Receivable and Unbilled Services
Accounts receivable	$ 322,496	$ 290,963
Unbilled services	142,847	126,755
Total accounts receivable, gross	465,343	417,718
Less allowance for doubtful accounts	(1,886)	(2,641)
Total accounts receivable and unbilled services, net	$ 463,457	$ 415,077

Goodwill and Intangible Asset42

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Changes in carrying amount of goodwill
Balance at the beginning of the period			$ 1,014,798
Nextrials acquisition			2,655
Currency translation			(25,567)
Balance at the end of the period	$ 991,886		991,886
Accumulated impairment charges	0		0		$ 0
Intangible Assets
Total finite-lived intangible assets, gross	551,048		551,048		560,342
Accumulated amortization	(162,844)		(162,844)		(144,414)
Total finite-lived intangible assets, net	388,204		388,204		415,928
Trade names (indefinite-lived)	118,010		118,010		118,010
Total intangible assets, net	506,214		506,214		533,938
Amortization expense	11,700	$ 14,100	23,000	$ 28,200
Estimated future amortization expense:
2016 (remaining)	22,682		22,682
2,017	36,010		36,010
2,018	31,794		31,794
2,019	26,440		26,440
2,020	25,172		25,172
2021 and thereafter	246,106		246,106
Total finite-lived intangible assets, net	388,204		388,204		415,928
Customer relationships
Intangible Assets
Total finite-lived intangible assets, gross	370,575		370,575		380,721
Customer backlog
Intangible Assets
Total finite-lived intangible assets, gross	123,055		123,055		127,871
Trade names (definite-lived)
Intangible Assets
Total finite-lived intangible assets, gross	25,728		25,728		25,693
Patient list and other intangibles
Intangible Assets
Total finite-lived intangible assets, gross	28,974		28,974		23,400
Non-competition agreements
Intangible Assets
Total finite-lived intangible assets, gross	$ 2,716		$ 2,716		2,657
Early Development Services
Goodwill Impairment Testing
Reporting Unit, Amount of Fair Value in Excess of Carrying Amount					$ 48,900
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount					23.00%

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 17, 2016	Jun. 30, 2016	Mar. 22, 2016	Dec. 31, 2015
Long-term debt
Long-term Debt, Gross		$ 900,441		$ 914,000
Less debt issuance costs and discount		(18,938)		(24,486)
Total long-term debt, net		881,503		889,514
Amounts free of restrictions available for cash dividends or stock repurchases		14,400		3,000
Repayment of principal		133,559
Loss on extinguishment of debt		21,485
Estimated fair value of borrowings under credit facilities and long-term debt		906,500		924,900
Principal payments on long-term debt
2,019		120,000
2,020		689,000
2021 and thereafter		91,441
Level 3
Long-term debt
Fair value of the term loans, borrowings under credit facilities, and accounts receivable financing agreement		807,300		678,700
First lien term debt
Long-term debt
Long-term Debt, Gross		689,000		689,000
Senior Notes
Long-term debt
Long-term Debt, Gross		91,441		225,000
Repayment of principal	$ 133,600
Interest rate (as a percent)	9.50%
Loss on extinguishment of debt	$ 21,500
Prepayment penalty	17,400
Write-off of unamortized debt issuance costs	3,700
Debt Repayment Transaction Fees	$ 400
Senior Notes | Level 2
Long-term debt
Fair value of Senior Notes		99,200		246,200
Accounts Receivable Financing Agreement
Long-term debt
Long-term Debt, Gross		120,000
Maximum borrowing capacity			$ 140,000
Outstanding borrowings		$ 120,000
Applicable margin on variable rate basis (as a percent)		1.60%
Notice Period for Terminating Loans Under Securitization		15 days
Weighted average interest rate (as a percent)		2.23%
Remaining borrowing capacity		$ 20,000
Revolving Credit Facility
Long-term debt
Maximum borrowing capacity		$ 125,000
Variable rate basis		LIBOR
Interest period, option one		1 month
Interest period, option two		2 months
Interest period, option three		3 months
Interest period, option four		6 months
Commitment fee (as a percent)		0.50%
Step-down commitment fee based upon achievement of a certain leverage ratio (as a percent)		0.375%
Outstanding borrowings		$ 0		0
Outstanding letters of credit		$ 4,000		$ 4,400

Stockholders' Equity (Details)

Stockholders' Equity (Details) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Stockholders' Equity
Common stock, shares authorized	1,000,000,000	1,000,000,000
Par value of share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Restricted Stock Awards (RSAs)
Stock-Based Compensation
Restricted stock awards granted in period	47,987
Total grant date fair value of awards granted	$ 2.1
Employee stock option
Stock-Based Compensation
Stock options granted (in shares)	349,000
Total grant date fair value of awards granted	$ 5.2
Options
Outstanding at beginning of period (in shares)	6,839,129
Granted (in shares)	349,000
Exercised (in shares)	(702,608)
Expired/forfeited (in shares)	(171,175)
Outstanding at end of period (in shares)	6,314,346	6,839,129
Exercisable (in shares)	3,099,755
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 11.39
Granted (in dollars per share)	43.78
Exercised (in dollars per share)	5.72
Expired/forfeited (in dollars per share)	14.84
Outstanding at end of period (in dollars per share)	13.72	$ 11.39
Exercisable (in dollars per share)	$ 8.91
Other disclosures:
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6 years 9 months 18 days	6 years 9 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	5 years 7 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 178.1	$ 231.7
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 101.8

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Awards and Units (Details) - RSAs and RSUs - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Stock-Based Compensation
Outstanding at beginning of period (in dollars per share)	143,984
Granted (in shares)	47,987
Vested	(1,812)
Outstanding at end of period (in dollars per share)	190,159
Weighted Average Grant-Date Fair Value
Outstanding at beginning of period (in dollars per share)	$ 28.42
Granted (in dollars per share)	43.28
Vested	27.60
Outstanding at end of period (in dollars per share)	$ 32.17
Intrinsic Value
Outstanding at end of period	$ 7.9	$ 6.5

Stock-Based Compensation - St47

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($)	Mar. 02, 2016	Jan. 20, 2016	Dec. 31, 2013	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock options, RSAs and RSUs
Stock-based compensation
Compensation expense				$ 4,364,000	$ 1,245,000	$ 32,695,000	$ 2,020,000
Stock options, RSAs and RSUs | Direct Costs
Stock-based compensation
Compensation expense				453,000	251,000	881,000	427,000
Stock options, RSAs and RSUs | Selling, general, and administrative expenses
Stock-based compensation
Compensation expense				1,317,000	$ 994,000	2,393,000	$ 1,593,000
Stock options, RSAs and RSUs | Transaction-Related Costs
Stock-based compensation
Compensation expense				2,594,000		29,421,000
2013 Plan | Stock options, RSAs and RSUs | Transaction-Related Costs
Stock-based compensation
Compensation expense				1,900,000		4,900,000
2013 Plan | Employee stock option | Market-based options
Stock-based compensation
Compensation expense		$ 0	$ 0
Number of stock options modified	835,551
2013 Plan | Employee stock option | Market-based options | Transaction-Related Costs
Stock-based compensation
Compensation expense associated with modification				$ 700,000		$ 24,500,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Income Taxes
Effective income tax rate (as a percent)	26.10%	30.30%
U.S. statutory rate (as a percent)	35.00%
Liability for unrecognized tax benefits	$ 11.3
Amount of gross unrecognized tax benefits that will change in the next 12 months as a result of pending audit settlements or statute of limitations expirations	$ 0.2

Commitments and Contingencies (

Commitments and Contingencies (Details) - Tax related claim on export of services provided $ in Millions	Jun. 30, 2016USD ($)
Commitments and Contingencies
Amount of tax claimed to be due in litigation	$ 4.7
Other assets
Commitments and Contingencies
Deposit made to Brazilian court in tax litigation	$ 4.7

Derivatives - Hedging Instrumen

Derivatives - Hedging Instruments (Details) - Interest rate swap - Designated as hedging instruments - Level 2 - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other assets
Derivatives in an asset position:
Notional amount		$ 250,000
Asset		$ 28
Other long-term liabilities
Derivatives in a liability position:
Notional amount	$ 250,000
Liability	$ (2,042)

Derivatives - Cash Flow Hedging

Derivatives - Cash Flow Hedging Instruments (Details) - Cash flow hedging - Interest rate contracts - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Effect of derivatives on the consolidated statements of operations and comprehensive income (loss)
Amount of pre-tax loss recognized in other comprehensive loss on derivatives	$ (428)	$ 1,770	$ (2,070)	$ (5,168)
Amount of loss recognized in other expense, net on derivatives (ineffective portion)		(29)		(85)
Amount of loss recognized in other expense, net on derivatives (no longer qualify for hedge accounting)		(20)		(509)
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives	$ (1,123)	$ (52)	(2,022)	$ (69)
Unrealized losses expected to be reclassified out of accumulated other comprehensive (loss) income into interest expense over the next 12 months			$ 5,700

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
KKR | First lien term debt
Related Party Transactions
First lien term debt held by related parties	$ 11.8	$ 14.7

Accumulated Other Comprehensi53

Accumulated Other Comprehensive Loss (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Summary of components of accumulated other comprehensive loss
Beginning balance	$ (132,307)
End balance	(176,692)
Foreign Currency Translation
Summary of components of accumulated other comprehensive loss
Beginning balance	(106,072)
Other comprehensive loss before reclassifications, net of tax	(44,337)
End balance	(150,409)
Foreign Currency Translation | British Pound
Summary of components of accumulated other comprehensive loss
Other comprehensive loss before reclassifications, net of tax	$ 50,800
Change in valuation of U.S. Dollar during the peiod (as a percent)	10.60%
Derivative Instruments
Summary of components of accumulated other comprehensive loss
Beginning balance	$ (26,235)
Other comprehensive loss before reclassifications, net of tax	(2,070)
Reclassification adjustments, net of tax	2,022
End balance	(26,283)
Accumulated Other Comprehensive Loss
Summary of components of accumulated other comprehensive loss
Beginning balance	(132,307)
Other comprehensive loss before reclassifications, net of tax	(46,407)
Reclassification adjustments, net of tax	2,022
End balance	$ (176,692)

Net Income Per Share (Details)

Net Income Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reconciliation of basic to diluted weighted average shares outstanding
Basic weighted average common shares outstanding	60,597	59,871	60,398	59,843
Effect of dilutive stock options and RSAs/RSUs	3,813	3,080	3,741	3,021
Diluted weighted average common shares outstanding	64,410	62,951	64,139	62,864
Anti-dilutive shares	347	55	291	38