Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | PRA Health Sciences, Inc. | ||
Entity Central Index Key | 1,613,859 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3 | ||
Entity Common Stock, Shares Outstanding | 63,790,933 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 192,229 | $ 144,623 |
Restricted cash | 661 | 4,715 |
Accounts receivable and unbilled services, net | 627,003 | 439,053 |
Prepaid expenses and other current assets | 55,580 | 35,367 |
Income taxes receivable | 1,551 | 979 |
Total current assets | 877,024 | 624,737 |
Fixed assets, net | 143,070 | 87,577 |
Goodwill | 1,512,424 | 971,980 |
Intangible assets, net | 783,836 | 473,976 |
Deferred tax assets | 8,939 | 6,568 |
Investment in unconsolidated joint ventures | 407 | 284 |
Deferred financing fees | 1,844 | 1,762 |
Other assets | 30,502 | 23,507 |
Total assets | 3,358,046 | 2,190,391 |
Current liabilities: | ||
Current portion of borrowings under credit facilities | 91,500 | 0 |
Current portion of long-term debt | 28,789 | 31,250 |
Accounts payable | 64,635 | 51,335 |
Accrued expenses and other current liabilities | 303,875 | 123,589 |
Income taxes payable | 13,606 | 25,524 |
Advanced billings | 469,211 | 332,501 |
Total current liabilities | 971,616 | 564,199 |
Deferred tax liabilities | 112,181 | 73,703 |
Long-term debt, net | 1,225,397 | 797,052 |
Other long-term liabilities | 112,371 | 26,185 |
Total liabilities | 2,421,565 | 1,461,139 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Issued and outstanding -- none | 0 | 0 |
Issued and outstanding -- 63,623,950 and 61,597,705 at December 31, 2017 and 2016, respectively | 636 | 616 |
Additional paid-in capital | 905,423 | 879,067 |
Accumulated other comprehensive loss | (136,470) | (224,686) |
Retained earnings | 161,182 | 74,255 |
Equity attributable to PRA Health Sciences, Inc. stockholders | 930,771 | 729,252 |
Noncontrolling interest | 5,710 | 0 |
Total stockholders' equity | 936,481 | 729,252 |
Total liabilities and stockholders' equity | $ 3,358,046 | $ 2,190,391 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 63,623,950 | 61,597,705 |
Common stock, shares outstanding (in shares) | 63,623,950 | 61,597,705 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Service revenue | $ 1,948,374,000 | $ 1,580,023,000 | $ 1,375,847,000 |
Reimbursement revenue | 311,015,000 | 231,688,000 | 238,036,000 |
Total revenue | 2,259,389,000 | 1,811,711,000 | 1,613,883,000 |
Operating expenses: | |||
Direct costs | 1,283,868,000 | 1,032,688,000 | 886,528,000 |
Reimbursable out-of-pocket costs | 311,015,000 | 231,688,000 | 238,036,000 |
Selling, general and administrative | 321,987,000 | 269,893,000 | 246,417,000 |
Transaction-related costs | 87,709,000 | 44,834,000 | 0 |
Depreciation and amortization | 78,227,000 | 69,506,000 | 77,952,000 |
Loss on disposal of fixed assets | 358,000 | 753,000 | 652,000 |
Income from operations | 176,225,000 | 162,349,000 | 164,298,000 |
Interest expense, net | (46,729,000) | (54,913,000) | (61,747,000) |
Loss on modification or extinguishment of debt | (15,023,000) | (38,178,000) | 0 |
Foreign currency (losses) gains, net | (39,622,000) | 24,029,000 | 14,048,000 |
Other (expense) income, net | (304,000) | 607,000 | (1,434,000) |
Income before income taxes and equity in income (losses) of unconsolidated joint ventures | 74,547,000 | 93,894,000 | 115,165,000 |
(Benefit from) provision for income taxes | (12,623,000) | 28,494,000 | 30,004,000 |
Income before equity in income (losses) of unconsolidated joint ventures | 87,170,000 | 65,400,000 | 85,161,000 |
Equity in income (losses) of unconsolidated joint ventures, net of tax | 123,000 | 2,775,000 | (3,396,000) |
Net income | 87,293,000 | 68,175,000 | 81,765,000 |
Net income attributable to noncontrolling interest | (366,000) | 0 | 0 |
Net income attributable to PRA Health Sciences, Inc. | $ 86,927,000 | $ 68,175,000 | $ 81,765,000 |
Net income per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ 1.39 | $ 1.12 | $ 1.36 |
Diluted (in dollars per share) | $ 1.32 | $ 1.06 | $ 1.29 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 62,437 | 60,759 | 59,965 |
Diluted (in shares) | 65,773 | 64,452 | 63,207 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 87,293 | $ 68,175 | $ 81,765 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 83,814 | (95,019) | (52,433) |
Unrealized gains (losses) on derivative instruments, net of income taxes of $96, $(622), and $(578) | 149 | (978) | (11,273) |
Reclassification adjustments: | |||
Losses on derivatives included in net income, net of income taxes, $2,699, $2,303, and $0 | 4,156 | 3,618 | 908 |
Comprehensive income (loss) | 175,412 | (24,204) | 18,967 |
Comprehensive income attributable to noncontrolling interest | (269) | 0 | 0 |
Comprehensive income (loss) attributable to PRA Health Sciences, Inc. | $ 175,143 | $ (24,204) | $ 18,967 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized (losses) gains on derivative instruments, tax | $ 96 | $ (622) | $ (578) |
Losses on derivatives included in net income, tax | $ 2,699 | $ 2,303 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings (Accumulated Deficit) | Noncontrolling Interest |
Balance (shares) at Dec. 31, 2014 | 59,814 | |||||
Balance at Dec. 31, 2014 | $ 676,815 | $ 598 | $ 821,411 | $ (69,509) | $ (75,685) | |
Statement of Changes in Stockholders' Equity | ||||||
Exercise of common stock options (shares) | 257 | |||||
Exercise of common stock options | 81 | $ 3 | 78 | |||
Issuance of common stock (shares) | 174 | |||||
Issuance of common stock | 1,583 | $ 1 | 1,582 | |||
Stock-based compensation expense | 5,276 | 5,276 | ||||
Net income | 81,765 | 81,765 | ||||
Other comprehensive loss, net of tax | (62,798) | (62,798) | ||||
Balance (shares) at Dec. 31, 2015 | 60,245 | |||||
Balance at Dec. 31, 2015 | 702,722 | $ 602 | 828,347 | (132,307) | 6,080 | |
Statement of Changes in Stockholders' Equity | ||||||
Exercise of common stock options (shares) | 1,303 | |||||
Exercise of common stock options | 655 | $ 13 | 642 | |||
Stock-based compensation - shares issued (shares) | 50 | |||||
Stock-based compensation - shares issued | $ 1 | |||||
Stock-based compensation expense | 49,233 | 49,232 | ||||
Income tax benefit from stock-based award activities | 846 | 846 | ||||
Net income | 68,175 | 68,175 | ||||
Other comprehensive loss, net of tax | (92,379) | (92,379) | ||||
Balance (shares) at Dec. 31, 2016 | 61,598 | |||||
Balance at Dec. 31, 2016 | 729,252 | $ 616 | 879,067 | (224,686) | 74,255 | |
Statement of Changes in Stockholders' Equity | ||||||
Exercise of common stock options (shares) | 1,904 | |||||
Exercise of common stock options | 8,091 | $ 19 | 8,072 | |||
Issuance of common stock (shares) | 5 | |||||
Issuance of common stock | 375 | $ 0 | 375 | |||
Stock-based compensation - shares issued (shares) | 117 | |||||
Stock-based compensation - shares issued | $ 1 | |||||
Stock-based compensation expense | 17,910 | 17,909 | ||||
Net income | 87,293 | 86,927 | $ 366 | |||
Other comprehensive loss, net of tax | 88,119 | 88,216 | (97) | |||
Non-controlling interest related to Takeda joint venture | 5,441 | 5,441 | ||||
Balance (shares) at Dec. 31, 2017 | 63,624 | |||||
Balance at Dec. 31, 2017 | $ 936,481 | $ 636 | $ 905,423 | $ (136,470) | $ 161,182 | $ 5,710 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 87,293 | $ 68,175 | $ 81,765 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 78,227 | 69,506 | 77,952 |
Amortization of debt issuance costs and discount | 2,108 | 4,433 | 5,983 |
Amortization of terminated interest rate swaps | 6,684 | 4,961 | 731 |
Stock-based compensation expense | 12,616 | 7,067 | 5,276 |
Non-cash transaction related stock-based compensation expense | 5,294 | 42,166 | 0 |
Unrealized foreign currency losses (gains) | 39,700 | (24,499) | (16,464) |
Loss on modification or extinguishment of debt | 15,023 | 38,178 | 0 |
Loss on disposal of fixed assets | 358 | 753 | 652 |
Change in acquisition-related contingent consideration | 74,969 | (527) | 89 |
Equity in (income) losses of unconsolidated joint ventures | (123) | (2,775) | 3,396 |
Unrealized loss on derivatives | 171 | 47 | 1,787 |
Excess tax benefit from stock-based compensation | 0 | (846) | 0 |
Deferred income taxes | (75,915) | (10,469) | (3,219) |
Other reconciling items | 592 | (652) | 443 |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | |||
Accounts receivable and unbilled services | (136,330) | (31,313) | (83,211) |
Prepaid expenses and other assets | 1,762 | (10,071) | (11,675) |
Accounts payable and other liabilities | 35,792 | (1,474) | 36,135 |
Income taxes | 10,640 | 7,308 | 9,958 |
Advanced billings | 61,547 | 79 | 42,830 |
Net cash provided by operating activities | 220,408 | 160,047 | 152,428 |
Cash flows from investing activities: | |||
Purchase of fixed assets | (61,318) | (33,143) | (32,814) |
Proceeds from the sale of fixed assets | 56 | 10 | 44 |
Cash paid for interest on interest rate swap | (874) | (913) | (302) |
Cash paid to terminate interest rate swaps | 0 | 0 | (32,907) |
Acquisition of Symphony Health Solutions Corporation, net of cash acquired | (521,182) | 0 | 0 |
Payment of Symphony Health Solutions Corporation contingent consideration | (67,781) | 0 | 0 |
Acquisition of Parallel 6, Inc., net of cash acquired | (38,859) | 0 | 0 |
Acquisition of Takeda PRA Development Center KK, net of cash acquired | 2,680 | 0 | 0 |
Acquisition of Takeda Pharmaceutical Data Services, Ltd., net of cash acquired | (142) | 0 | 0 |
Acquisition of Nextrials, Inc., net of cash acquired | 0 | (4,268) | 0 |
Acquisition of Value Health Solutions, Inc., net of cash acquired | 0 | (543) | |
Payment of ClinStar, LLC working capital settlement | 0 | 0 | (1,693) |
Distributions from unconsolidated joint ventures | 0 | 3,700 | 19,529 |
Contributions to unconsolidated joint ventures | 0 | 0 | (23,000) |
Net cash used in investing activities | (687,420) | (34,614) | (71,686) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 550,000 | 625,000 | 0 |
Repayment of long-term debt | (125,513) | (822,559) | (40,000) |
Proceeds from accounts receivable financing agreement | 20,000 | 120,000 | 0 |
Repayment on accounts receivable financing agreement | (20,000) | 0 | 0 |
Borrowings on line of credit | 121,500 | 110,000 | 90,000 |
Repayments of line of credit | (30,000) | (110,000) | (90,000) |
Payment of debt prepayment and debt extinguishment costs | (9,226) | (17,824) | 0 |
Payment for debt issuance costs | (6,588) | (7,713) | 0 |
Payment of common stock issuance costs | 0 | 0 | (525) |
Excess tax benefit from stock-based compensation | 0 | 846 | 0 |
Proceeds from stock option exercises | 7,236 | 655 | 81 |
Payment of acquisition-related contingent consideration | (400) | 0 | (2,000) |
Net cash provided by (used in) financing activities | 507,009 | (101,595) | (42,444) |
Effects of foreign exchange changes on cash, cash equivalents, and restricted cash | 3,555 | (625) | (3,702) |
Change in cash, cash equivalents, and restricted cash | 43,552 | 23,213 | 34,596 |
Cash, cash equivalents, and restricted cash, beginning of year | 149,338 | 126,125 | 91,529 |
Cash, cash equivalents, and restricted cash, end of year | $ 192,890 | $ 149,338 | $ 126,125 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business PRA Health Sciences, Inc. and its subsidiaries (collectively, 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. In September 2017, the Company completed the acquisition of Symphony Health Solutions Corporation, or Symphony Health, to better serve clients across their entire product lifecycle by (i) improving clinical trial design, recruitment, and execution; (ii) creating real-world data solutions based on the use of medicines by actual patients in normal situations; and (iii) increasing the efficiency of healthcare companies' commercial organizations through enhanced analytics and outsourcing services. The acquisition of Symphony Health was accounted for as a business combination and the acquired results of operations are included in the Company's consolidated financial information since the date of the acquisition. See Note 4 for additional information regarding the acquisition of Symphony Health. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Secondary Offerings During 2017 and 2016, Kohlberg Kravis Roberts & Co. L.P., or KKR, and certain executive officers of the Company sold a total of 10,000,000 and 17,500,000 shares, respectively, of the Company’s common stock as part of secondary offerings. The Company incurred professional fees in connection with the secondary offerings of $1.0 million and $1.3 million during years ended December 31, 2017 and 2016, respectively. The fees are included in transaction-related costs in the accompanying consolidated statement of operations. As of December 31, 2017 , KKR owned 20.7% of the Company’s outstanding common stock. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts and operations of the Company, its subsidiaries and investments in which the Company has control. Amounts pertaining to the non-controlling ownership interests held by third parties in the operating results and financial position of the Company’s majority-owned subsidiaries are reported as non-controlling interests. Intercompany accounts and transactions have been eliminated in consolidation. Variable Interest Entities Financial Accounting Standards Board’s, or FASB, accounting guidance concerning variable interest entities, or VIE, addresses the consolidation of 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 variable interest entity. Application of the VIE consolidation requirements may require the exercise of significant judgment by management. Takeda PRA Development Center KK The Company entered into a joint venture with Takeda Pharmaceutical Company Ltd. during 2017. For further discussion on the joint venture, refer to Note 4, Business Combinations. Accounts Receivable Financing Agreement 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 9, Revolving Credit Facilities and Long-Term Debt, for additional information regarding the accounts receivable financing agreement. Risks and Other Factors The Company’s revenues are dependent on research and development expenditures of the pharmaceutical and biotechnology industries. Any significant reduction in research and development expenditures by the pharmaceutical and biotechnology industries could have a material adverse effect on the Company and its results of operations. Clients of the Company generally may terminate contracts without cause upon 30 to 60 days’ notice. While the Company generally negotiates deposit payments and early termination fees up front, such terminations could significantly impact the future level of staff utilization and have a material adverse effect on the Company and the results of future operations. Use of Estimates The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. In particular, the Company’s primary method of revenue recognition requires estimates of costs to be incurred to fulfill existing long-term contract obligations. Actual results could differ from those estimates. Estimates are also used when accounting for certain items such as allowance for doubtful accounts, depreciation and amortization, asset impairment, certain acquisition-related assets and liabilities including contingent consideration, income taxes, fair market value determinations, and contingencies. Reportable Segments In conjunction with the acquisition of Symphony Health, the Company expanded its reporting segments. The Company is now managed through two reportable segments, Clinical Research and Data Solutions. Clinical Research, which primarily serves biopharmaceutical clients, provides outsourced clinical research and clinical trial related services. Data Solutions provides data and analytics, technology solutions and real-world insights and services to companies in the pharmaceutical industry. The Clinical Research segment is solely focused on the execution of clinical trials on a global basis. The Company has considered whether the delivery of the different types of capabilities in various stages of clinical development constitute separate products or lines of service in accordance with Accounting Standards Codification, or ASC, 280, “Segment Reporting,” or ASC 280, and has concluded that there are substantial similarities and overlaps in the capabilities delivered at each stage of clinical development, with the primary differences between the Early Development Services, or EDS, compared to the Product Registration, or PR, and Strategic Solutions, or SS, relating to the points during the life cycle of a clinical trial at which such capabilities are delivered. After review and analysis of the operating characteristics of each service offering and using the aggregation characteristics under ASC 280, the Company has concluded that the services provided are similar across most characteristics. The Company's operations consist of two reportable segments, which represents management's view of the Company's operations based on its management and internal reporting structure. The Company considered the guidance in ASC 350, “Intangibles—Goodwill and Other,” which notes that a reporting unit is an operating segment or one level below an operating segment. PR, EDS, and SS are the business units that are one level below the Company’s Clinical Research operating segment and the Company determined that they meet the definition of “components,” as discrete financial information exists and this information is regularly reviewed by management. The Data Solutions operating segment does not have any material components. Business Combinations Business combinations are accounted for using the acquisition method and, accordingly, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date of the acquisition. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired, including the amount assigned to identifiable intangible assets. Contingent Liabilities The Company provides for contingent liabilities when (1) it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and (2) the amount of the loss can be reasonably estimated. Disclosure in the notes to the consolidated financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. The Company expenses as incurred the costs of defending legal claims against the Company. Cash Equivalents The Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2017 and 2016 , substantially all of the Company’s cash and cash equivalents were held in or invested with large financial institutions. Certain bank deposits may at times be in excess of the Federal Deposit Insurance Corporation insurance limits. Restricted cash The Company receives cash advances from its customers to be used for the payment of investigator costs and other pass-through expenses. The terms of certain customer contracts require that such advances be maintained in separate escrow accounts; these accounts are not commingled with the Company’s cash and cash equivalents and are presented separately in the consolidated balance sheets as restricted cash. Additionally, as part of the acquisition of Nextrials, Inc., or Nextrials, the Company was required to transfer $0.5 million to an escrow account held by a subsidiary. These funds were distributed in 2017. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands): December 31, 2017 2016 2015 Cash and cash equivalents $ 192,229 $ 144,623 $ 121,065 Restricted cash 661 4,715 5,060 Total cash, cash equivalents, and restricted cash $ 192,890 $ 149,338 $ 126,125 Accounts Receivable and Unbilled Services Accounts receivable represent amounts for which invoices have been sent to clients based upon contract terms. Unbilled services represent amounts earned for services that have been rendered but for which clients have not been billed and include reimbursement revenue. Unbilled services are generally billable upon submission of appropriate billing information, achievement of contract milestones or contract completion. Allowances for Doubtful Accounts The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company performs credit reviews of each customer, monitors collections and payments from customers, and determines the allowance based upon historical experience and specific customer collection issues. The Company ages billed accounts receivable and assesses exposure by customer type, by aged category, and by specific identification. After all attempts to collect a receivable have failed, the receivable is written off against the allowance or, to the extent unreserved, to bad debt expense. Advanced Billings Advanced billings represent amounts associated with services, reimbursement revenue and investigator fees that have been received but have not yet been earned or paid. Fixed Assets Fixed assets and software purchased or developed for internal use are recorded at cost and are depreciated on a straight-line basis over the following estimated useful lives: Furniture, fixtures and equipment 5-7 years Computer hardware and software 3-7 years Leasehold improvements Lesser of the life of the lease or useful life of the improvements Internal Use Software The Company accounts for internal use software in accordance with the guidance in ASC 350‑40, “Internal-Use Software," which require certain direct costs and interest costs incurred during the application stage of development to be capitalized and amortized over the useful life of the software. Derivative Financial Instruments The Company utilizes interest rate swaps to manage changes in market conditions related to debt obligations. All derivatives are measured at fair value and recognized as either assets or liabilities on the consolidated balance sheets. Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding effect on earnings. Changes in the fair value of derivatives that are designated and determined to be effective as part of a hedge transaction have no immediate effect on earnings and depending on the type of hedge, are recorded either as part of other comprehensive loss and will be included in earnings in the period in which earnings are affected by the hedged item, or are included in earnings as an offset to the earnings impact of the hedged item. Any ineffective portion of hedges is reported in earnings as it occurs. Amounts previously recorded in accumulated other comprehensive loss related to these interest rate swaps will be reclassified into earnings over the term of the previously hedged borrowing using the swaplet method. The Company has elected the accounting policy that cash flows associated with interest rate derivative contracts are classified as cash flows from investing activities. Contingent Consideration The consideration for the Company’s acquisitions may include potential future earn-out payments that are contingent upon the occurrence of particular events. These payments might be based on the achievement of future revenue or earnings milestones. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations, excluding adjustments that qualify as measurement period adjustments, are recognized within the Company’s consolidated statements of operations. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or probability of achieving certain revenue or earnings targets. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions or actual results could have a material impact on the amount of contingent consideration expense the Company records in any given period. During the fourth quarter of 2017, the Company made an accounting policy election to present changes in the fair value of contingent consideration as part of income from operations within transaction-related costs on the consolidated statements of operations. The change in fair value of contingent consideration for the years ended December 31, 2015 and 2016, totaled $0.1 million and $0.5 million , respectively, and were included in other (expense) income, net on the consolidated statements of operations. Due to the immaterial nature of the prior year balances, they were not reclassified to match the current year presentation. 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 December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Assets: Interest rate swap $ — $ 428 $ — $ 428 Marketable securities 393 — — 393 Total $ 393 $ 428 $ — $ 821 Liabilities: Contingent consideration $ — $ — $ 50,644 $ 50,644 Total $ — $ — $ 50,644 $ 50,644 The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of December 31, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ 590 $ — $ 590 Contingent consideration — — 2,754 2,754 Total $ — $ 590 $ 2,754 $ 3,344 The Company values contingent consideration using models that include significant unobservable Level 3 inputs, such as projected financial performance over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payments. Interest rate swaps are 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 following table summarizes the changes in Level 3 financial liabilities measured on a recurring basis (in thousands): Contingent consideration - Accrued expenses and other current liabilities Contingent consideration - Other long-term liabilities Balance at December 31, 2015 $ 999 $ — Initial estimate of Nextrials contingent consideration — 2,282 Revaluations included in earnings — (527 ) Reclassification adjustment 736 (736 ) Balance at December 31, 2016 1,735 1,019 Initial estimate of Symphony Health contingent consideration 90,394 18,390 Initial estimate of Parallel 6, Inc. contingent consideration — 8,350 Payments on Nextrials contingent consideration (400 ) — Payments on Symphony Health contingent consideration (67,788 ) — Measurement period adjustments 24,388 14,279 Changes in fair value included in earnings 66,363 8,606 Transfer out (114,692 ) — Balance at December 31, 2017 $ — $ 50,644 The $114.7 million transfer out represents the year-end 2017 earn-out payment to the sellers of Symphony Health that was calculated using observable inputs at December 31, 2017. The remaining $50.6 million balance at December 31, 2017, which was valued using a Monte Carlo simulation, relates to the 2018 earn-out payment to Symphony Health and is based on its future adjusted earnings before interest, taxes, depreciation and amortization, or Adjusted EBITDA. Key assumptions include (1) a discount rate of 8% , (2) a volatility rate of 32% , and (3) probability adjusted level of Adjusted EBITDA of $56.5 million for the year ended December 31, 2018. Refer to Note 4 for additional discussion of the Symphony Health acquisition. Non-recurring Fair Value Measurements Certain assets and liabilities are carried on the accompanying consolidated 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 December 31, 2017 , assets carried on the balance sheet and not remeasured to fair value on a recurring basis totaling approximately $2,296.3 million were identified as Level 3. These assets are comprised of goodwill of $1,512.4 million and identifiable intangible assets, net of $783.8 million . Refer to Note 9, Revolving Credit Facilities and Long-Term Debt, for additional information regarding the fair value of long-term debt balances. Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived asset groups, including furniture and equipment, computer hardware and software, leasehold improvements, and other finite-lived intangibles, when events or changes in circumstances occur that indicate the carrying value of the asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The Company’s primary measure of fair value is based on discounted cash flows. The measurement of impairment requires the Company to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. Goodwill and Other Intangibles Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if an event or circumstance indicates that an impairment loss may have been incurred. Separate intangible assets that have finite useful lives are amortized over their estimated useful lives or over the period in which economic benefit is received. The Company’s primary finite-lived intangibles are customer relationships, customer backlog, and acquired databases, which are amortized on an accelerated basis, which coincides with the period of economic benefit received by the Company. The Company reviews the carrying value of goodwill to determine whether impairment may exist on an annual basis or whenever it has reason to believe goodwill may not be recoverable. The annual impairment test of goodwill is performed during the fourth quarter of each fiscal year. The Company did not have an impairment for any of the years presented. When evaluating for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or indefinite-lived intangible asset is impaired. If the Company does not perform a qualitative assessment, or if it determines that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset exceeds its carrying amount, the Company will calculate the estimated fair value of the reporting unit or indefinite-lived intangible asset. The Company’s decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition. During 2017 , as part of the Company’s annual impairment analysis, the Company performed the qualitative assessment for all of its goodwill and indefinite-lived trade name intangible asset balances. If the Company does not perform a qualitative assessment, goodwill impairment is determined by the Company using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of each reporting unit, determined using various valuation techniques, with the primary technique being a discounted cash flow analysis, to its carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized. Revenue Recognition The Company generally enters into contracts with customers to provide services with payments based on either fixed-fee, time and materials, or fee-for-service arrangements. Revenue for services is recognized only after persuasive evidence of an arrangement exists, the sales price is determinable, services have been rendered, and collectability is reasonably assured. Once these criteria have been met, the Company recognizes revenue for the services provided on fixed-fee contracts in the Clinical Research segment based on the proportional performance methodology, which determines the proportion of outputs or performance obligations which have been completed or delivered compared to the total contractual outputs or performance obligations. To measure performance, the Company compares the contract costs incurred to estimated total contract costs through completion. As part of the client proposal and contract negotiation process, the Company develops a detailed project budget for the direct costs based on the scope of the work, the complexity of the study, the geographical location involved and the Company’s historical experience. The Company then establishes the individual contract pricing based on the Company’s internal pricing guidelines, discount agreements, if any, and negotiations with the client. The estimated total contract costs are reviewed and revised periodically throughout the lives of the contracts, with adjustments to revenue resulting from such revisions being recorded on a cumulative basis in the period in which the revisions are first identified. Contract costs consist primarily of direct labor and other project-related costs. The Company recognizes revenue for services provided on fixed-fee contracts in the Data Solutions segment either ratably as earned over the contract period, for subscription-based services, or upon delivery, for one-time delivery of data solutions or reports. Revenue from time and materials contracts is recognized as hours are incurred. Revenues and the related costs of fee-for-service contracts are recognized in the period in which services are performed. In the Clinical Research segment, a majority of contracts undergo modifications over the contract period and the Company’s contracts provide for these modifications. During the modification process, the Company recognizes revenue to the extent it incurs costs, provided client acceptance and payment is deemed reasonably assured. Volume discounts are offered to certain large customers based on annual volume thresholds. The Company records an estimate of the annual volume rebate as a reduction of revenue throughout the period based on the estimated total rebate to be earned for the period. Most contracts in the Clinical Research segment can be terminated by the client either immediately or after a specified period following notice. These contracts require the client to pay the Company the fees earned through the termination date, the fees and expenses to wind down the study, and, in some cases, a termination fee or some portion of the fees or profit that the Company could have earned under the contract if it had not been terminated early. Therefore, revenue recognized prior to cancellation generally does not require a significant adjustment upon cancellation. The Company's Data Solutions segment enters into contracts with some of its larger data suppliers that involve non-monetary terms. The Company will issue purchase credits to be used toward the data supplier's purchase of the Company's products, services or consulting. In exchange the Company receives monetary discounts on the data received from the data suppliers. The fair value of the revenue earned from the customer purchases is determined based on similar product offerings to other customers. At the end of the contract year, any unused purchase credits will be forfeited or carried over to the next contract year based on the terms of the data supplier contract. For the year ended December 31, 2017 , the Company recognized service in kind revenue of $5.8 million from these transactions, which is included in service revenue in the accompanying consolidated statements of operations. Reimbursement Revenue and Reimbursable Out-of-Pocket Costs The Company incurs out-of-pocket costs, in excess of contract amounts, which are reimbursable by its customers. The Company includes out-of-pocket costs both as reimbursement revenue and as reimbursable out-of-pocket costs in the consolidated statements of operations. As is customary in the industry, the Company routinely enters into separate agreements on behalf of its clients with independent physician investigators in connection with clinical trials. The funds received for investigator fees are netted against the related cost because such fees are the obligation of the Company’s clients, without risk or reward to the Company. The Company is not obligated either to perform the service or to pay the investigator in the event of default by the client. In addition, the Company does not pay the independent physician investigator until funds are received from the client. Total payments to investigators were $250.9 million , $249.6 million , and $208.0 million and for the years ended December 31, 2017 , 2016 , and 2015 , respectively. 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 December 31, 2017 , 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: Years Ended December 31, 2017 2016 2015 Customer A 10.3 % 11.0 % — Customer B — 10.4 % 10.7 % 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: December 31, 2017 2016 Customer A 11.5 % 12.0 % Foreign Currency The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the end of the period. Equity activities are translated at the spot rate effective at the date of the transaction. Revenue and expense accounts and cash flows of these operations are translated at average exchange rates prevailing during the period the transactions occurred. Translation gains and losses are included as an adjustment to the accumulated other comprehensive loss account in stockholders’ equity. Translation gains and losses from foreign currency transactions, such as those resulting from the settlement and revaluation of foreign receivables and payables, are included in the determination of net income. These amounts are included in foreign currency (losses) gains, net in the consolidated statements of operations. In addition, gains or losses related to the Company’s intercompany loans payable and receivable denominated in a foreign currency other than the subsidiary’s functional currency that are deemed to be of a long-term investment nature are remeasured to cumulative translation and recorded in accumulated other comprehensive loss in the consolidated balance sheets. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the fin |
Joint Ventures
Joint Ventures | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Joint Ventures | Joint Ventures The Company entered into a joint venture with Takeda Pharmaceutical Company Ltd. during 2017. For further discussion on the joint venture, refer to Note 4, Business Combinations. On May 6, 2016, the Company and WuXi AppTec (Shanghai) Co., Ltd., or WuXi, finalized an agreement to dissolve the WuXiPRA 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 . As a result of the transaction, the Company recognized a $3.3 million gain on the sale, which is recorded in the equity in income (losses) of unconsolidated joint ventures in the accompanying consolidated statement of operations. During April 2015, prior to the dissolution of the WuXiPRA joint venture, both the Company and WuXi made a $3.0 million contribution to WuXiPRA to fund the joint venture’s working capital needs. The Company’s interest in WuXiPRA remained at 49% after the capital contribution. The Company recorded reductions to the investment balance of $0.7 million (excluding the gain on the sale) and $2.9 million during the years ended December 31, 2016 and 2015 , respectively, for the Company's equity in the venture’s net loss for the period, which is recorded in the equity in income (losses) of unconsolidated joint ventures, net of tax in the consolidated statement of operations. The investment was adjusted for the Company's equity in the venture’s net income (loss), cash contributions, distributions, and other adjustments required by the equity method of accounting. The Company entered into a joint venture agreement with A2 Healthcare Corporation (formerly part of Asklep, Inc.). The joint venture provides research and development outsourcing solutions in Japan to the biopharmaceutical and medical device industries. This joint venture is based in Tokyo, Japan and is owned by the Company ( 49% ) and Asklep ( 51% ). On October 17, 2014, the joint venture changed its name from RPS Asklep, Inc. to A2PRA Corporation, or A2PRA. The Company recorded changes to the investment balance totaling $0.1 million , $0.1 million , and $0.0 million during the years ended December 31, 2017 , 2016 , and 2015 , respectively, for the Company’s equity in the venture’s net income (loss) for the period, which is recorded in the equity in income (losses) of unconsolidated joint venture, net of tax in the Company's consolidated statement of operations. The investment will be adjusted for the Company’s equity in the venture’s net income (loss), cash contributions, distributions, and other adjustments required by the equity method of accounting. The investment in A2PRA totaled $0.4 million and $0.3 million at December 31, 2017 and 2016 , respectively. In August 2015, the Company and an affiliate of KKR entered into a joint venture. The joint venture was dissolved in December 2015. The purpose of the joint venture included, among other things, the evaluation of investments or acquisitions to enhance the strategic objectives of the Company. The joint venture was jointly owned by the Company ( 11% ) and KKR ( 89% ). The Company contributed $20.0 million to the joint venture in August 2015 and received $19.5 million in December 2015 when the joint venture was dissolved. The Company recorded the $0.5 million reduction to the investment balance in equity in income (losses) of unconsolidated joint ventures, net of tax in the consolidated statement of operations. The investment in the joint venture was adjusted for the Company’s equity in the venture’s net income (loss), cash contributions, distributions, and other adjustments required by the equity method of accounting. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Symphony Health Solutions, Inc. On September 6, 2017, the Company acquired all of the outstanding equity interest of Symphony Health, a provider of data and analytics to help professionals understand the full market lifecycle of products offered for sale by companies in the pharmaceutical industry, for $539.4 million in cash and contingent consideration, which was not capped, in the form of potential earn-out payments based on a multiple of future earnings for the twelve-month periods ending December 2017 and December 2018. With this acquisition, the Company expects to enhance its ability to serve customers throughout the clinical research process with technologies that provide data and analytics. The liability associated with the expected payment of the earn-out was preliminarily valued at $108.8 million at the acquisition date. During the fourth quarter of 2017, the Company recorded a measurement period adjustment to increase the fair value of the contingent consideration at the acquisition date to $147.5 million based on the Company's finalized assessment of earnings forecasts as of the acquisition date. This measurement period adjustment was reflected as a corresponding increase to goodwill as of the acquisition date. The fair value of the contingent consideration was determined by using a Monte Carlo simulation that includes significant unobservable inputs such as a risk-adjusted discount rate and projected future earnings over the earn-out periods. As the fair value was based on significant inputs not observed in the market and thus represented a Level 3 measurement. The Company reassesses the fair value of expected contingent consideration and the corresponding liability each reporting period using a Monte Carlo simulation, which is consistent with the initial measurement of the expected liability. Changes in the fair value of the contingent consideration subsequent to the acquisition date, excluding adjustments that qualify as measurement period adjustments, are recognized in earnings in the period of such change. The Company recorded $85.7 million to transaction-related costs in the consolidated statements of operations during the year ended December 31, 2017 , associated with changes in the fair value of the earn-out. The Company made a preliminary 2017 earn-out payment, totaling $67.8 million , to the former owners of Symphony Health during the fourth quarter of 2017. As of December 31, 2017 , the earn-out liability totaled $165.3 million ; $114.7 million is included in accrued expenses and other current liabilities and $50.6 million is included in other long-term liabilities in the consolidated balance sheet. During February 2018, the Company made the year-end 2017 earn-out payment, which totaled $114.7 million . The 2018 earn-out payment, which is based on 2018 earnings and is payable in the first quarter of 2019, could range from $0 to approximately $110.8 million . The acquisition of Symphony Health 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 $476.0 million of goodwill, which was assigned to the Data Solutions segment and 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 operations. The Company incurred $6.4 million in acquisition related costs that are included in transaction-related costs in the consolidated statements of 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 March 2018, 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 Price Allocation Weighted Amortization Period Cash and cash equivalents $ 26,297 Accounts receivable and unbilled services 39,132 Other current assets 23,726 Fixed assets 12,340 Customer relationships 190,100 10 years Database 137,100 3 years Tradename 2,000 2 years Accounts payable and accrued expenses (42,222 ) Advanced billings (65,968 ) Deferred tax liabilities (104,869 ) Other long-term liabilities (6,740 ) Estimated fair value of net assets acquired 210,896 Purchase price, including contingent consideration and working capital adjustment 686,877 Total goodwill $ 475,981 The results of operations for Symphony Health are included in the consolidated financial statements of the Company from the date of acquisition. During this period, Symphony Health's service revenues and net income totaled $90.5 million and $6.3 million , respectively. Since the acquisition date, goodwill decreased by $24.5 million . The change is primarily related to a $90.6 million increase in the allocation of the purchase price to acquired finite-lived intangible assets, offset by a $38.7 million measurement period adjustment to increase the fair value of the contingent consideration and a $29.8 million adjustment to the acquired income tax balances. The following unaudited pro-forma information assumes the acquisition of Symphony Health occurred as of the beginning of 2016. This pro-forma financial information is not necessarily indicative of operating results if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. December 31, (in thousands, except per share amounts) 2017 2016 Total revenue $ 2,408,770 $ 2,011,544 Net income attributable to PRA Health Sciences, Inc. 104,700 45,836 Net income per share: Basic $ 1.68 $ 0.75 Diluted $ 1.59 $ 0.71 The unaudited pro-forma financial information for the year ended December 31, 2017 includes the following non-recurring adjustments: • a $6.4 million increase to transaction-related costs incurred by the Company during the year ended December 31, 2017 attributable to the transaction, with a corresponding $2.5 million increase to the benefit from income taxes. • a $3.1 million increase to loss on the modification or extinguishment of long-term debt incurred by the Company during the year ended December 31, 2017 attributable to the above transaction, with a corresponding $1.2 million increase to the benefit from income taxes. Takeda Transactions On June 1, 2017, the Company acquired all of the outstanding shares of Takeda Pharmaceutical Data Services, Ltd., or TDS, from Takeda Pharmaceutical Company Ltd., or Takeda, for $0.7 million in cash. The Company recorded approximately $1.0 million of goodwill, which is assigned to the Clinical Research segment and is not deductible for income tax purposes. Pro-forma results of operations and a complete purchase price allocation have not been presented because the results of this acquisition did not have a material effect on the Company's consolidated financial statements. On June 1, 2017, the Company and Takeda also closed on a joint venture transaction that enables the Company to provide clinical trial delivery and pharmacovigilance services as a strategic partner of Takeda in Japan. The joint venture transaction was effectuated through the creation of a new legal entity, Takeda PRA Development Center KK, or the TDC joint venture. The Company paid $5.4 million for a 50% equity interest in the TDC joint venture, which represents 50% of the fair value of the net assets and workforce that Takeda contributed to the joint venture. The joint venture provides services including clinical trial monitoring, project management, regulatory strategy and submissions, data management, biostatistics, drug safety reporting, and medical monitoring. The Company is required to buy-out Takeda’s 50% interest in the TDC joint venture in two years. The Company also has an early buy-out option of Takeda’s 50% interest in December 2018, if both parties agree. The Company determined that the TDC joint venture is a VIE in which the Company is the primary beneficiary. Accordingly, the Company accounted for the $5.4 million contribution to the TDC joint venture as a business combination and consolidated the VIE in its financial statements with a noncontrolling interest for the 50% portion owned by Takeda. The assets acquired and the liabilities assumed have been recorded at their respective estimated fair values as of June 1, 2017. The Company recorded approximately $2.7 million of goodwill, which is assigned to the Clinical Research segment and is not deductible for income tax purposes. The goodwill is primarily attributable to the assembled workforce. The Company incurred $0.6 million in acquisition related costs that are included in selling, general and administrative expenses in the consolidated statements of operations. The Company’s fair value of the net assets acquired as part of the TDC joint venture transaction at the closing date of the business combination is as follows (in thousands): Purchase Price Allocation Cash and cash equivalents $ 8,120 Other current assets 1,671 Other non-current assets 799 Accounts payable and accrued expenses (2,380 ) Estimated fair value of net assets acquired 8,210 PRA purchase price 5,440 Fair value of Takeda's noncontrolling interest 5,440 Total goodwill $ 2,670 The Company has not disclosed post-acquisition or pro-forma revenue and earnings attributable to the TDC joint venture as they did not have a material effect on the Company’s consolidated financial statements. Parallel 6, Inc. On May 10, 2017, the Company acquired all of the outstanding equity interest of Parallel 6, Inc., or Parallel 6, a developer of technologies for improving patient enrollment, engagement, and management of clinical trials, for $39.0 million in cash and contingent consideration in the form of a potential earn-out payment of up to $10.0 million . The earn-out payment is contingent upon the achievement of certain external software sales targets during the 18 -month period following closing. With this acquisition, the Company expects to enhance its ability to serve customers throughout the clinical research process with technologies that provide improved efficiencies by reducing study durations and costs through integrated operational management. The fair value of the earn-out as of the acquisition date was $8.4 million , which was determined by using a Monte Carlo simulation that includes significant unobservable inputs such as a risk-adjusted discount rate and projected external software sales of Parallel 6 over the earn-out period. As the fair value was based on significant inputs not observed in the market and thus represented a Level 3 measurement. During the fourth quarter of 2017, the Company determined that the external software sales targets likely would not be met; therefore the Company released the $8.4 million contingent consideration liability, which is recorded within transaction-related costs in the consolidation statements of operations. The acquisition of Parallel 6 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 $32.5 million of goodwill, which was assigned to the Clinical Research segment and 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. The Company incurred $1.3 million in acquisition related costs that are included in selling, general and administrative expenses in the consolidated statements of operations. The Company’s purchase price allocation is as follows (in thousands): Purchase Price Allocation Weighted Amortization Period Cash and cash equivalents $ 132 Accounts receivable and unbilled services 929 Other current assets 26 Software intangible 15,500 5 years Other intangibles 920 5 years Accounts payable and accrued expenses (780 ) Advanced billings (692 ) Other long-term liabilities (1,148 ) Estimated fair value of net assets acquired 14,887 Purchase price, including contingent consideration 47,339 Total goodwill $ 32,452 Since the acquisition date, goodwill decreased by $1.2 million , primarily as a result of adjustments to acquired balances. The Company has not disclosed post-acquisition or pro-forma revenue and earnings attributable to Parallel 6 as they did not have a material effect on the Company’s consolidated financial statements. Acquisition of Nextrials 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 $4.8 million in cash and contingent consideration in the form of potential earn-out payments of up to $3.0 million . Earn-out payments of $2.0 million and $1.0 million were 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. The fair value was based on significant inputs not observed in the market and thus represented a Level 3 measurement. Changes in the fair value of the earn-out subsequent to the acquisition date were recognized in earnings in the period of the change. The Company made a payment of $0.4 million during the year ended December 31, 2017 as a result of the achievements of certain project milestones. During the fourth quarter of 2017, the Company determined that the remaining project milestone and external software sales targets likely would not be met; therefore, the Company released the remaining $1.4 million contingent consideration liability, which is recorded within transaction-related costs in the consolidated statements of operations. 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 $4.3 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. The Company’s purchase price allocation is as follows (in thousands): Purchase Weighted Cash and cash equivalents $ 94 Accounts receivable and unbilled services 211 Other current assets 96 Property, plant and equipment 111 Software intangible 5,574 5 years Accounts payable and accrued expenses (1,585 ) Other long-term liabilities (1,663 ) Estimated fair value of net assets acquired 2,838 Purchase price, including contingent consideration 7,145 Total goodwill $ 4,307 Since the acquisition date, goodwill increased by $2.0 million , primarily as a result of adjustments to the acquired income tax balances. Pro forma information is not provided as the acquisition did not have a material effect on the Company’s consolidated results. Acquisition of WuXiPRA’s Hong Kong Operations As noted in Note 3, the Company acquired WuXiPRA’s Hong Kong operations for $0.3 million when the joint venture was dissolved on May 6, 2016. The acquisition was accounted for as a business combination and, accordingly, the assets acquired and the liabilities assumed were recorded at their respective fair values as of the acquisition date. In connection with the acquisition, the Company recorded approximately $0.6 million of goodwill, which is attributable to the workforce of the acquired business. Pro forma information is not provided as the acquisition did not have a material effect on the Company’s consolidated results. Acquisition of VHS On June 8, 2015, the Company purchased the assets of Value Health Solutions Inc., or VHS, a software development firm, for $0.5 million in cash and 47,598 unregistered shares of the Company’s common stock with a fair market value of $1.6 million . In June 2017 an additional 4,998 shares of the Company's common stock with a fair market value of $0.4 million were issued to VHS in accordance with the asset purchase agreement. The asset purchase agreement also includes contingent consideration in the form of potential earn-out payments of up to $16.0 million . Earn-out payments of $1.0 million and $15.0 million are contingent upon the achievement of project milestones and certain external software sales targets, respectively, during the 48 -month period following closing. The Company recognized a liability of approximately $1.0 million as the estimated acquisition date fair value of the earn-out; this amount is included in the accrued expenses and other current liabilities in the consolidated balance sheet as of December 31, 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 were recognized in earnings in the period of the change. During the year ended December 31, 2017, the Company released the remaining $1.0 million contingent consideration liability, which is recorded within transaction-related costs in the consolidation statements of operations as the earn-out targets were not met. 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 VHS 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 $1.0 million of goodwill, which is 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. The Company’s purchase price allocation is as follows (in thousands): Purchase Price Allocation Weighted Amortization Period Software intangible $ 2,500 5 years Property, plant and equipment 43 Estimated fair value of net assets acquired 2,543 Purchase price, including contingent consideration 3,499 Total goodwill $ 956 Pro forma information is not provided as the acquisition did not have a material effect on the Company’s consolidated results. |
Accounts Receivable and Unbille
Accounts Receivable and Unbilled Services | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable and Unbilled Services | 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 (in thousands): December 31, 2017 2016 Accounts receivable $ 457,676 $ 284,647 Unbilled services 170,760 155,609 Total accounts receivable and unbilled services 628,436 440,256 Less allowance for doubtful accounts (1,433 ) (1,203 ) Total accounts receivable and unbilled services, net $ 627,003 $ 439,053 A rollforward of the allowance for doubtful accounts is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 1,203 $ 2,641 $ 1,819 Charged (credited) to income from operations 255 (652 ) 443 Write-offs, recoveries and the effects of foreign currency exchange (25 ) (786 ) 379 Ending balance $ 1,433 $ 1,203 $ 2,641 |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets The carrying amount of fixed assets is as follows (in thousands): December 31, 2017 2016 Leasehold improvements $ 49,548 $ 25,083 Computer hardware and software 139,861 92,095 Furniture and equipment 44,325 33,751 Total fixed assets 233,734 150,929 Accumulated depreciation (90,664 ) (63,352 ) Total fixed assets, net $ 143,070 $ 87,577 All fixed assets are included as collateral for the payment and performance in full of the term loans pledged by the Company and its subsidiaries. Depreciation expense was $29.0 million , $24.1 million , and $21.2 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill are as follows (in thousands): Clinical Research Data Solutions Consolidated Balance at December 31, 2015 $ 1,014,798 $ — $ 1,014,798 Acquisition of Nextrials 4,307 — 4,307 Acquisition of the WuXiPRA joint venture’s Hong Kong operations 570 — 570 Currency translation (47,695 ) — (47,695 ) Balance at December 31, 2016 971,980 — 971,980 Acquisition of Symphony Health — 475,981 475,981 Acquisition of Parallel 6 32,452 — 32,452 Acquisition of TDC joint venture 2,670 — 2,670 Acquisition of TDS 966 — 966 Currency translation 28,375 — 28,375 Balance at December 31, 2017 $ 1,036,443 $ 475,981 $ 1,512,424 There are no accumulated impairment charges as of December 31, 2017 and 2016 . Intangible Assets Intangible assets consist of the following (in thousands): December 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationships $ 565,638 $ (72,133 ) $ 493,505 $ 360,328 $ (44,886 ) $ 315,442 Customer backlog 123,746 (120,583 ) 3,163 119,223 (108,847 ) 10,376 Trade names (finite-lived) 28,558 (9,265 ) 19,293 25,740 (6,544 ) 19,196 Patient list and other intangibles 44,474 (24,226 ) 20,248 28,974 (18,442 ) 10,532 Database 137,100 (7,544 ) 129,556 — — — Non-competition agreements 2,767 (2,706 ) 61 2,737 (2,317 ) 420 Total finite-lived intangible assets 902,283 (236,457 ) 665,826 537,002 (181,036 ) 355,966 Trade names (indefinite-lived) 118,010 — 118,010 118,010 — 118,010 Total intangible assets $ 1,020,293 $ (236,457 ) $ 783,836 $ 655,012 $ (181,036 ) $ 473,976 The Company conducts its annual impairment test of indefinite‑lived intangibles during the fourth quarter of the fiscal year. For the periods ended December 31, 2017 , 2016 and 2015 , the Company concluded that the fair value of indefinite‑lived intangibles exceeded the carrying value and, therefore, no impairment exists. Amortization expense was $49.2 million , $45.4 million and $56.7 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Estimated amortization expense related to finite‑lived intangible assets for the next five years and thereafter is as follows (in thousands): 2018 $ 71,773 2019 69,130 2020 69,502 2021 64,380 2022 49,980 2023 and thereafter 341,061 Total $ 665,826 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2017 2016 Compensation, including bonuses, fringe benefits and payroll taxes $ 125,658 $ 86,160 Acquisition-related contingent considerations 114,692 1,735 Accrued data costs 15,669 — Other 44,591 32,078 Interest 3,265 3,616 Total accrued expenses and other current liabilities $ 303,875 $ 123,589 |
Revolving Credit Facilities and
Revolving Credit Facilities and Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facilities and Long-Term Debt | Revolving Credit Facilities and Long‑Term Debt Long‑term debt consists of the following (in thousands): December 31, 2017 2016 Term loans, first lien $ 1,140,927 $ 625,000 Senior notes — 91,441 Accounts receivable financing agreement 120,000 120,000 Total debt 1,260,927 836,441 Less current portion of long-term debt (28,789 ) (31,250 ) Total long-term debt 1,232,138 805,191 Less debt issuance costs and discount (6,741 ) (8,139 ) Total long-term debt, net $ 1,225,397 $ 797,052 Principal payments on long‑term debt are due as follows (in thousands): Current maturities of long-term debt: 2018 $ 28,789 2019 148,789 2020 28,789 2021 1,054,560 Total $ 1,260,927 2016 Credit Facilities On December 6, 2016, the Company through its wholly-owned subsidiary, Pharmaceutical Research Associates, Inc., entered into a credit agreement providing for senior secured credit facilities, or the 2016 Credit Facilities, totaling $750.0 million . The 2016 Credit Facilities were comprised of a $625.0 million first lien term loan due 2021, or the 2016 First Lien Term Loan, and a five -year $125.0 million revolving line of credit, or the 2016 Revolver. The proceeds from the 2016 Credit Facilities were used to repay the then outstanding 2013 First Lien Term Loan (defined below). In accordance with the guidance in ASC 470‑50, “Debt—Modifications and Extinguishments,” the debt repayment was accounted for as a partial debt extinguishment. The repayment resulted in a $16.7 million loss on extinguishment of debt, consisting of $15.8 million write-off of unamortized debt issuance costs and $0.9 million of fees associated with the transaction, which is included in loss on modification or extinguishment of debt in the consolidated statements of operations for the year ended December 31, 2016 . On September 6, 2017, the Company borrowed $550.0 million , or the Incremental Borrowing, pursuant to an incremental amendment to the credit agreement governing the 2016 Credit Facilities. The incremental borrowing provisions of the credit agreement allow for, among other things, additional borrowings in the event of a material acquisition by the Company. The proceeds of the Incremental Borrowing were primarily used to fund the acquisition of Symphony Health. In accordance with the guidance in FASB’s ASC 470-50, the Incremental Borrowing was accounted for as a debt modification. The Incremental Borrowing resulted in a $3.1 million loss on modification of debt, which consists of fees associated with the transaction for the year ended December 31, 2017 . On December 28, 2017, the Company amended the credit agreement governing the 2016 Credit Facilities, or the 2017 Refinancing, to refinance the 2016 First Lien Term Loan which reduced the interest rate margin and amended the payment schedule applicable to the 2016 First Lien Term Loan. The 2017 Refinancing also increased the Company's borrowing capacity under the 2016 Revolver from $125.0 million to $225.0 million and modified the definition of permitted investments and refreshed the capacity for incremental credit facilities under the Credit Agreement. In accordance with the guidance in ASC 470-50, the 2017 Refinancing was accounted for as a debt modification. As a result of the debt modification, the Company recognized a loss of modification of debt totaling $0.6 million , which was recorded during the year ended December 31, 2017. As collateral for borrowings under the 2016 Credit Facilities, the Company granted a pledge on primarily all of its assets, and the stock of wholly‑owned U.S. restricted subsidiaries. The Company is also subject to certain financial covenants, which require the Company to maintain certain debt‑to‑EBITDA and interest expense-to-EBITDA ratios. The 2016 Credit Facilities also contain covenants that, among other things, restrict the Company’s ability to create liens, make investments and acquisitions, incur or guarantee additional indebtedness, enter into mergers or consolidations and other fundamental changes, conduct sales and other dispositions of property or assets, enter into sale-leaseback transactions or hedge agreements, prepay subordinated debt, pay dividends or make other payments in respect of capital stock, change the line of business, enter into transactions with affiliates, enter into burdensome agreements with negative pledge clauses, and make subsidiary distributions. After giving effect to the applicable restrictions on the payment of dividends under the 2016 Credit Facilities, subject to compliance with applicable law, as of December 31, 2017 and December 31, 2016, all amounts in retained earnings were free of restriction and were 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 2016 Credit Facilities also contains customary representations, warranties, affirmative covenants, and events of default. 2016 First Lien Term Loan The 2016 First Lien Term Loan, including the Incremental Borrowing and as modified by the 2017 Refinancing, is a floating rate term loan with scheduled, fixed quarterly principal payments of $7.2 million to be made quarterly until September 30, 2021, with the remaining $1,033.0 million principal payment due at December 6, 2021. The variable interest rate is a rate equal to the London Interbank Offered Rate, or LIBOR, or the adjusted base rate, or ABR, at the election of the Company, plus a margin based on the ratio of total indebtedness to EBITDA. The margin ranges from 1.00% to 2.00% , in the case of LIBOR loans, and 0.00% to 1.00% , in the case of ABR loans. The Company has the option of 1 , 2 , 3 or 6 month base interest rates. As of December 31, 2017 and 2016, the weighted average interest rate on the first lien term loan was 3.45% and 2.70% , respectively. There are no prepayment penalties. 2016 Revolver The Company’s 2016 Revolver, as modified by the 2017 Refinancing, provides for $225.0 million of potential borrowings and expires on December 6, 2021. The interest rate on the 2016 Revolver is based on the LIBOR with a 0% LIBOR floor or ABR , at the election of the Company, plus an applicable margin based on the leverage ratio of the Company. The Company, at its discretion, may elect interest periods of 1 , 2 , 3 or 6 months. The Company is required to pay to the lenders a commitment fee for unused commitments of 0.2% to 0.4% based on the Company’s debt-to-EBITDA ratio. At December 31, 2017, the Company had $91.5 million in outstanding borrowings under the 2016 Revolver at a weighted average interest rate of 3.56% ; there were no outstanding borrowings under the 2016 Revolver at December 31, 2016. In the next twelve months, the Company has the ability and intends to repay the outstanding line of credit obligations; therefore, borrowings under the line of credit have been classified as a current liability. In addition, at December 31, 2017 and 2016, the Company had $4.9 million and $7.0 million , respectively, in letters of credit outstanding, which are secured by the 2016 Revolver. 2013 Credit Facilities In September 2013, the Company entered into senior secured credit facilities, or the 2013 Credit Facilities, for an aggregate principal amount of $825.0 million of first lien term loan, or 2013 First Lien Term Loan, and a $125.0 million revolving line of credit, or 2013 Revolver. In September 2013, the Company also issued $375.0 million in senior notes, or Senior Notes. The proceeds from the 2013 Credit Facilities and the Senior Notes issuances were used in conjunction with the acquisition by KKR, to fund the acquisition of RPS, repay existing debt, and pay for fees and expenses related to the aforementioned events. As collateral for borrowings under the 2013 Credit Facilities, the Company granted a pledge on primarily all of its assets, and the stock of designated subsidiaries. The Company was subject to certain financial covenants, which required the Company to maintain certain debt‑to‑EBITDA ratios. The 2013 Credit Facilities also contained covenants that, among other things, restricted 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. 2013 First Lien Term Loan The 2013 First Lien Term Loan was a floating rate term loan with scheduled, fixed quarterly principal payments of 0.25% of the original principal balance through September 2020. The voluntary prepayments made during 2014, using proceeds from the IPO, fully satisfied all required quarterly principal payments through maturity. The variable interest rate was based on the LIBOR , with a 1.0% LIBOR floor, plus an applicable margin of 3.5% . The applicable margin was dependent upon the Company’s debt to consolidated EBITDA ratio as defined in the 2013 Credit Facilities. The 2013 Credit Facilities required the Company to prepay outstanding term loans, subject to certain exceptions, with 50% of the Company's annual Excess Cash Flow, which percentage would be reduced to 25% if PRA achieves a debt‑to‑EBITDA ratio of less than or equal to 3.75 to 1.0, but greater than 3.25 to 1.0 on the date of prepayment for the most recent test period and no prepayment would be required if PRA achieves a debt‑to‑EBITDA ratio of less than or equal to 3.25 to 1.0 on the date of prepayment for the most recent test period, commencing in 2014. The Company had the option of 1 , 2 , 3 or 6 month base interest rates. There were no prepayment penalties. 2013 Revolver The Company’s 2013 Revolver provided for $125.0 million of potential borrowings and would have expired on September 23, 2018. The interest rate on the 2013 Revolver was based on the LIBOR plus an applicable rate, based on the leverage ratio of the Company. The Company, at its discretion, may have chosen interest periods of 1 , 2 , 3 or 6 months. In addition, the Company was 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. Senior Notes In September 2013, the Company issued $375 million of Senior Notes at a rate of 9.50% per year payable on April 1, and October 1 of each year, beginning April 1, 2014. The Senior Notes did not require principal payments and were set to mature on October 1, 2023. The Company could redeem the Senior Notes, in whole or in part, at any time prior to October 1, 2018 subject to a prepayment premium calculated in accordance with the Senior Notes indenture. From October 1, 2018 through October 1, 2019, the prepayment premium was 4.75% declining ratably to 0% beginning on October 1, 2021. In the event of a change in control, the Company could have been required to offer to repurchase the Senior Notes at a price equal to the outstanding principal balance and a 1% prepayment premium plus accrued and unpaid interest. The Senior Notes included covenants which place limitations on incurring additional indebtedness, selling certain assets, and making certain distributions. On March 17, 2016, the Company repurchased $133.6 million aggregate principal amount of its Senior Notes as part of a cash tender offer. In accordance with the guidance in ASC 470-50, the debt repurchase was accounted for as a partial debt extinguishment. The repurchase 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 cost and $0.4 million of fees associated with the transaction which is included in loss on modification or extinguishment of debt in the consolidated statement of operations during the year ended December 31, 2016 . On December 29, 2017, the Company redeemed the remaining $91.4 million aggregate principal amount of its Senior Notes. In accordance with the guidance in ASC 470-50, the debt redemption was accounted for as a debt extinguishment. The redemption resulted in an $11.3 million loss on extinguishment of debt, which consisted of a $9.2 million early payment premium and $2.1 million write-off of unamortized debt issuance cost which is included in loss on modification or extinguishment of debt in the consolidated statement of operations during the year ended December 31, 2017. 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 December 31, 2017 . The initial borrowings in 2016 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 December 31, 2017 and 2016, the weighted average interest rate on the accounts receivable financing agreement was 2.96% and 2.31%, respectively. 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 December 31, 2017 , there was $20.0 million of remaining capacity available under the accounts receivable financing agreement. Fair Value of Debt The estimated fair value of the Company’s debt and outstanding borrowings under its revolving credit facilities was $1,352.4 million and $844.2 million at December 31, 2017 and 2016, respectively. The fair value of the term loans, borrowings under credit facilities, and accounts receivable financing agreement which totaled $1,352.4 million and $678.7 million at December 31, 2017 and 2016, 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. The fair value of the Senior Notes totaled $99.2 million at December 31, 2016, 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. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 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 | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On September 23, 2013 and in connection with the acquisition of the Company by KKR, the Board of Directors approved the formation of the 2013 Stock Incentive Plan for Key Employees of Pinnacle Holdco Parent, Inc. and its subsidiaries, or the Plan. The Plan allowed for the issuance of stock options and other stock-based awards as permitted by applicable laws. The number of shares available for grant under the Plan is 12.5% of the outstanding shares at closing on a fully diluted basis. The Company rolled over 2,052,909 stock options under the Plan. The fair value of the options that were rolled over equaled the fair value of the options in the Predecessor Company and, therefore, there was no additional stock-based compensation expense recorded. All stock options granted under 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, calculated using the Finnerty Model, when determining the grant date value of these options. In conjunction with the secondary offerings during 2017 and 2016, 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 ASC 718, “Stock Compensation.” As a result of these modifications, the Company incurred approximately $3.7 million and $10.1 million of incremental compensation expense associated with service-based options during the years ended December 31, 2017 and 2016 , respectively, which is included in transaction-related costs in the accompanying consolidated statements of operations. On November 23, 2014 and in connection with the Company’s IPO, the Board of Directors approved the formation of the 2014 Omnibus Plan for Key Employees, or the 2014 Omnibus Plan. The 2014 Omnibus Plan allows for the issuance of stock options, stock appreciation rights, restricted shares and restricted stock units, other stock-based awards, and performance compensation awards as permitted by applicable laws. The number of shares available for grant under the 2014 Omnibus Plan is 3,200,000 . Generally, the Company grants stock options with exercise prices greater than or equal to the fair market value of the Company’s common stock on the date of grant. The stock option compensation cost calculated under the fair value approach is recognized on a pro-rata basis over the vesting period of the stock options (usually five years under the Plan and four years under the 2014 Omnibus Plan). Most stock option grants are subject to graded vesting as services are rendered and have a contractual life of ten years. The Board and the Compensation Committee have the discretion to determine different vesting schedules. 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” and “2.5x Options”). At the time of grant, no compensation expense was recorded as the 2.0x Options and 2.5x 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. The Company did not record compensation expense on the January 20, 2016 modification date as the Company determined the modification resulted in Type IV Improbable-to-Improbable modification as the secondary offering was deemed improbable since the event was outside of the Company’s control and could not be considered probable until the date it occurred. 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. Due to the modification of the terms of the 2.0x Options, the Company calculated the fair value of these options using the Black-Scholes option pricing model with the following assumptions: expected life of 2.92 years; risk-free rate of 1.04% ; volatility of 45% ; dividend yield of 0% ; and a Finnerty discount of approximately 16% . 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 $0.8 million and $25.7 million of incremental compensation expense associated with the 2.0x Options during the years ended December 31, 2017 and 2016, respectively, which is included in transaction-related costs in the accompanying consolidated statements of operations. On November 16, 2016, the 2.5x Options vested upon the achievement of a specified internal rate of return and multiple on invested capital in connection with the closing of a secondary offering of shares by KKR. In total, 809,755 2.5x Options held by current employees vested. The Company incurred approximately $0.8 million and $6.4 million of incremental compensation expense associated with the vesting and transfer restriction release of the 2.5x Options during the years ended December 31, 2017 and 2016, respectively, which is included in transaction-related costs in the accompanying consolidated statements of operations. As of December 31, 2017 , there was $59.4 million of unrecognized compensation cost related to unvested stock-based compensation, which is expected to be recognized over a weighted average period of 2 years. The total fair value of options vested during the years ended December 31, 2017 , 2016 and 2015 was $5.2 million , $27.3 million and $3.1 million , respectively. Aggregated information regarding the Company’s option plans is summarized below: Options Wtd. Average Exercise Price Wtd. Average Remaining Contractual Life Intrinsic Value (in millions) Outstanding at December 31, 2016 5,507,347 $ 15.38 6.7 $ 218.9 Granted 1,921,000 75.21 Exercised (1) (2,094,886 ) 10.19 Expired/forfeited (87,836 ) 28.47 Outstanding at December 31, 2017 5,245,625 $ 39.14 7.6 $ 272.4 Exercisable at December 31, 2017 2,247,920 $ 14.12 6.0 $ 173.0 (1) During the year ended December 31, 2017, of the 2,094,886 shares exercised, 190,683 were withheld from the option holders to cover the exercise price of the options being exercised. The weighted average fair value of service-based options granted was $25.24 , $15.57 and $10.87 during the years ended December 31, 2017 , 2016 and 2015 , respectively. Selected information regarding the Company’s stock options as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Exercise Price Number of Options Wtd Average Remaining Life (in Years) Wtd. Average Exercise Price Number of Options Wtd. Average Remaining Life (in Years) Wtd. Average Exercise Price $ 2.94 27,304 5.0 $ 2.94 27,304 5.0 $ 2.94 $ 11.73 - 16.42 2,441,121 5.9 $ 11.89 1,971,291 5.9 $ 11.82 $ 25.35 - 74.13 1,058,700 8.1 $ 42.93 249,325 7.4 $ 33.51 $ 75.01 - 83.37 1,718,500 9.7 $ 76.08 — — $ — The Company recorded a receivable of $2.7 million from the Company's brokerage services provider associated with certain stock option exercises, which was included in the "Prepaid expenses and other current assets" line item on the accompanying consolidated balance sheets as of December 31, 2017. The full amount was received in January 2018. Restricted Stock Awards and Units The Company’s RSAs/RSUs will settle in shares of the Company’s common stock on the applicable vesting date. RSAs/RSUs granted to employees vest 100% on the third anniversary of the date of grant. RSAs/RSUs granted to the Company's non-employee directors vest 50% on the first anniversary of the date of grant and 50% on the second anniversary of the date of grant. Activity related to the Company’s RSAs/RSUs in 2017 is as follows: Awards Wtd. Average Grant-Date Fair Value Intrinsic Value (millions) Unvested at December 31, 2016 188,590 $ 32.63 $ 10.4 Granted 140,044 64.18 Expired/Forfeited (12,000 ) 32.81 Vested (7,096 ) 38.80 Unvested at December 31, 2017 309,538 $ 46.76 $ 28.2 Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Years Ended December 31, 2017 2016 2015 Direct costs $ 3,552 $ 1,813 $ 1,218 Selling, general and administrative 9,064 5,254 4,058 Transaction-related costs 5,294 42,166 — Total stock-based compensation expense $ 17,910 $ 49,233 $ 5,276 Employee Stock Purchase Plan In April 2017, the Board of Directors approved the PRA Health Sciences, Inc. 2017 Employee Stock Purchase Plan, or ESPP, which was approved by the Company’s shareholders on June 1, 2017. The ESPP allows eligible employees to authorize payroll deductions of up to 15% of their base salary or wages to be applied toward the purchase of shares of the Company’s common stock on the last trading day of the offering period. Participating employees will purchase shares of the Company's common stock at a discount of up to 15% on the lesser of the closing price of the Company's common stock on the NASDAQ Global Select Market (i) on the first trading day of the offering period or (ii) the last day of any offering period. The aggregate number of shares of the Company’s common stock that may be issued under the ESPP may not exceed three million shares and no one employee may purchase any shares under the ESPP having a collective fair market value greater than $25,000 in any one calendar year. Offering periods under the ESPP will generally be in six month increments, commencing on January 1 and July 1 of each calendar year with the compensation committee having the right to establish different offering periods. The Company's first offering period will commence on January 1, 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before income taxes and equity in income (losses) of unconsolidated joint ventures are as follows (in thousands): Years Ended December 31, 2017 2016 2015 Domestic $ (52,083 ) $ (61,226 ) $ (23,400 ) Foreign 126,630 155,120 138,565 $ 74,547 $ 93,894 $ 115,165 The components of the (benefit from) provision for income taxes were as follows (in thousands): Years Ended December 31, 2017 2016 2015 Current: Federal $ 30,084 $ 151 $ 1,132 State 2,607 1,842 1,507 Foreign 30,601 36,970 30,584 Total current income tax expense 63,292 38,963 33,223 Deferred: Federal (70,041 ) (2,230 ) (1,349 ) State (1,203 ) (451 ) 1,564 Foreign (4,671 ) (7,788 ) (3,434 ) Total deferred income tax benefit (75,915 ) (10,469 ) (3,219 ) Total income tax expense (benefit) $ (12,623 ) $ 28,494 $ 30,004 Income taxes computed at the statutory U.S. federal income tax rate of 35.0% are reconciled to the benefit from income taxes as follows: Years Ended December 31, 2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % Federal tax rate change (56.0 )% — % — % State income taxes, net of federal benefit (5.5 )% 0.3 % 2.0 % Tax on foreign earnings: Foreign rate differential (20.3 )% (17.7 )% (13.6 )% Foreign earnings taxed in the U.S. 60.7 % 17.5 % 7.3 % Foreign dividends 5.2 % — % — % Non-U.S. research and development credits (3.3 )% (3.9 )% (4.4 )% Stock-based compensation (39.9 )% 1.9 % 0.2 % Nondeductible contingent consideration 35.4 % — % — % Valuation allowance (28.0 )% — % — % Change in liability for uncertain tax positions (3.2 )% — % (0.6 )% Nondeductible expenses 2.2 % 0.1 % 0.3 % Other 0.8 % (2.9 )% (0.1 )% Effective income tax rate (16.9 )% 30.3 % 26.1 % Components of the deferred tax assets and liabilities were as follows (in thousands): December 31, 2017 2016 Net operating loss carryforwards $ 48,603 $ 29,470 Accruals and reserves 15,943 12,986 Equity based compensation 7,447 17,392 Prepaid expenses and other 13,492 25,232 Deferred and unbilled revenue 24,937 25,718 Tax credits 15,111 5,295 125,533 116,093 Valuation allowance (25,226 ) (21,689 ) Total deferred tax assets (net of valuation allowance) 100,307 94,404 Identified intangibles (190,115 ) (148,576 ) Depreciable, amortizable and other property (13,434 ) (12,963 ) Deferred tax liabilities (203,549 ) (161,539 ) Net deferred tax liability $ (103,242 ) $ (67,135 ) Long-term deferred tax asset $ 8,939 $ 6,568 Long-term deferred tax liability $ (112,181 ) $ (73,703 ) The Company’s foreign subsidiaries are taxed separately in their respective jurisdictions. As of December 31, 2017 , the Company has cumulative foreign net operating loss carryforwards of approximately $7.4 million . In addition, the Company has federal net operating loss carryforwards of approximately $165.6 million and state net operating loss carryforwards of approximately $506.8 million . The carryforward periods for the Company’s net operating losses vary from five years to an indefinite number of years depending on the jurisdiction. The Company’s ability to offset future taxable income with net operating loss carryforwards may be limited in certain instances, including changes in ownership. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has calculated our best estimate of the impact of the Act in our year end income tax provision in accordance with our understanding of the Act and guidance under SAB 118 available as of the date of this filing and as a result has recorded $0.2 million as additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred tax assets, deferred tax liabilities, and U.S. uncertain tax positions, based on the rates at which they are expected to reverse in the future, was a benefit of $41.7 million . The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was $77.6 million based on cumulative foreign earnings of $392.5 million . The Company also recorded a provisional tax benefit of $35.7 million related to the utilization of foreign tax credits against the one-time transition tax. In addition, the Company has recorded a valuation allowance against an estimated $12.8 million of excess foreign tax credits related to the transition tax inclusion. The Company is continuing to analyze the overall impact of the transition tax inclusion, including its foreign tax credit limitation position and will update the provisional estimate as it completes its analysis during the measurement period. Due to the complexity of the new law, the Company is still in the process of investigating the related accounting implications. Specifically, for the Global Intangible Low Tax Income (“GILTI”) tax the Company intends to make an accounting policy decision around whether to account for GILTI as a period cost in the relevant period, or to record deferred taxes related to the basis in the Company’s foreign subsidiaries once additional guidance is available for assessment. The Company also has federal and state income tax credit carryforwards available to potentially offset future federal and state income tax of $12.8 million and $1.9 million , respectively. The federal credits expiring in ten years. The state credits begin expiring in 2022 . The Company has provided a full valuation allowance against the benefits of these credits. In determining the extent to which a valuation allowance for deferred tax assets is required, the Company evaluates all available evidence including projections of future taxable income, carry back opportunities, reversal of certain deferred tax liabilities, and other tax‑planning strategies. The valuation allowance at December 31, 2017 relates to the U.S. foreign tax credit carryforwards, certain foreign net operating losses, state net operating losses and state tax credit carryforwards. As of December 31, 2017, the Company has a U.S. net federal deferred tax liability. The Company has concluded that it no longer requires a valuation allowance that existed at the beginning of the year on its net federal deferred tax assets. As such, the valuation allowance of $21.2 million has been released during the year ended December 31, 2017. A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 12,432 $ 11,729 $ 16,207 Additions based on tax positions related to current year 1,641 1,196 1,333 Additions for income tax positions of prior years 400 542 95 Impact of changes in exchange rates 427 (127 ) (594 ) Impact of change in federal tax rate (3,536 ) — — Settlements with tax authorities (108 ) (559 ) — Reductions for income tax positions for prior years (3,174 ) (349 ) (4,308 ) Reductions due to lapse of applicable statute of limitations (171 ) — (1,004 ) Ending balance $ 7,911 $ 12,432 $ 11,729 As of December 31, 2017 , 2016 , and 2015 , the total gross unrecognized tax benefits were $7.9 million , $12.4 million , and $11.7 million , respectively. As of December 31, 2017 , the total amount of gross unrecognized tax benefits which, if recognized, would impact the Company’s effective tax rate is $7.9 million . The Company anticipates changes in total unrecognized tax benefits due to the expiration of statute of limitations within the next 12 months and an income tax audit resolution. Specifically, adjustments related to transfer pricing and foreign tax exposures are expected to be resolved in various jurisdictions. A reasonable estimate of the change in the total gross unrecognized tax benefit expected to be recognized as a result is $0.5 million as of the balance sheet date. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income tax expense. The Company recorded a decrease of $0.8 million , an increase of $0.1 million , and a decrease of $0.1 million during the years ended December 31, 2017 , 2016 and 2015, respectively. As of December 31, 2017 , the Company has a total of $1.6 million recognized on uncertain tax positions. To the extent interest and penalties are not incurred with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction in income tax expense. The Company has analyzed filing positions in all of the significant federal, state and foreign jurisdictions where the Company is required to file income tax returns. The only periods subject to examination by the major tax jurisdictions where the Company does business are the 2009 through 2016 tax years. As of December 31, 2017, there are no untaxed undistributed earnings of its foreign subsidiaries. This is due to the U.S. Tax Cuts and Jobs Act enacted December 22, 2017 that requires all untaxed foreign earnings to be currently taxed in the 2017 U.S. federal income tax return. With respect to the previously taxed income, as of December 31, 2017, an asset of $1.0 million was recorded for the effect of repatriating a portion of those foreign earnings. Aside from the portion expected to be actually repatriated in future years the Company has not provided for U.S. federal and foreign withholding taxes on those previously taxed earnings of its foreign subsidiaries. The Company is in the process of evaluating the impact of the new U.S. tax law on its permanent reinvestment assertion. No additional U.S. federal income taxes or foreign withholding taxes have been provided on accumulated earnings of foreign subsidiaries deemed to have been repatriated as part of the one-time transition tax. The Company's evaluation of the impact of the new U.S. tax law on its permanent reinvestment assertion is expected to be completed within the one-year measurement period as allowed by SAB 118. A rollforward of the deferred tax asset valuation allowance accounts is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 21,689 $ 23,205 $ 16,142 Additions - excess benefit offset to NOL change 12,623 — — Additions - purchase accounting 219 — — Additions - other comprehensive income — — 3,892 Additions - charged to expense 12,863 3,421 3,770 Additions - U.S. federal tax rate change 1,330 — — Deductions - charged to expense (including translation adjustments) (23,498 ) (4,937 ) (599 ) Ending balance $ 25,226 $ 21,689 $ 23,205 The valuation allowance at December 31, 2017 is primarily related to U.S. foreign tax credit carryforwards, state loss carryforwards, state credit carryforwards, and loss carryforwards in various foreign jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases office space under operating lease agreements expiring at various times through 2036. The Company has sublease agreements for certain facilities to reduce rent expense and accommodate expansion needs. The subleases expire at various times through 2022. The Company also leases certain office equipment under the terms of operating leases expiring at various times through 2023. Rent expense under operating leases, net of sublease rental income, was $37.0 million , $31.9 million and $30.1 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future minimum lease commitments on non‑cancelable operating leases are as follows (in thousands): Years Ended December 31, Leases Sublease Rental Income Net Total 2018 $ 44,071 $ (181 ) $ 43,890 2019 38,871 (125 ) 38,746 2020 35,494 (125 ) 35,369 2021 31,783 (124 ) 31,659 2022 25,970 (41 ) 25,929 2022 and thereafter 110,394 — 110,394 Total $ 286,583 $ (596 ) $ 285,987 Employment Agreements The Company has entered into employment and non‑compete agreements with certain management employees. In the event of termination of employment for certain instances, employees will receive severance payments for base salary and benefits for a specified period ( six months for vice presidents, nine months for senior vice presidents and twelve months for executive vice presidents, the president and chief executive officer). Each employment agreement also contains provisions that restrict the employee’s ability to compete directly with the Company for a comparable period after employment terminates. In addition, stock option grant agreements for these employees provide the Company with the right to repurchase from the employee, or the employee with the right to sell to the Company, stock owned by the employee in certain limited instances of termination. 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 $5.2 million at December 31, 2017 , given that it is not deemed probable the Company will incur a loss related to this case. However, a deposit totaling $5.2 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 balance sheets. In 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 settled. In September 2017, a judge from the Superior Court of Justice of Brazil denied relief to the City of Sao Paulo's appeal and upheld the lower court's ruling in the favor of the Company for the years 2005 to 2012, and in the period from January to October 2013. The judge from the Superior Court of Justice of Brazil also ruled that the Company must appeal the lower court's verdict for October 2013 and the subsequent periods as the Judiciary Court of Justice of the State of Sao Paulo only reviewed the facts that pertained to the period before October 2013. Insurance The Company currently maintains insurance for risks associated with the operation of its business, provision of professional services, and ownership of property. These policies provide coverage for a variety of potential losses, including, without limitation, loss or damage to property, bodily injury, general commercial liability, professional errors and omissions, and medical malpractice. The Company’s retentions and deductibles associated with these insurance policies range up to a maximum of $0.5 million . Employee Health Insurance The Company is self‑insured for health insurance for employees within the United States. The Company maintains stop‑loss insurance on a “claims made” basis for expenses in excess of $0.3 million per member per year. As of December 31, 2017 and 2016 , the Company maintained a reserve of approximately $5.0 million and $4.1 million , respectively, included in accrued expense and other current liabilities on the consolidated balance sheets, to cover open claims and estimated claims incurred but not reported. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company is exposed to certain risks relating to its 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 also employed an interest rate cap that would have compensated the Company if variable interest rates had risen above a pre-determined rate. The Company’s interest rate contracts are designated as hedging instruments. On October 2, 2013, the Company entered into interest rate swap agreements with an aggregate notional principal amount of $620.0 million , or the 2013 Swaps. The interest rate swaps were set to begin on September 23, 2015. The interest rate swaps were to be used to hedge the Company’s variable rate debt. The interest rate swaps had maturity dates ranging from one to five years. During the third quarter of 2015, the Company paid $32.9 million to terminate the 2013 Swaps. Amounts previously recorded in accumulated other comprehensive loss related to these interest rate swaps, totaling $29.6 million , are being reclassified into earnings over the term of the previously hedged borrowing using the swaplet method. For the terminated swaps, the Company reclassified $6.3 million , $4.7 million and $0.7 previously recorded in accumulated other comprehensive loss into interest expense during the years ended December 31, 2017 , 2016 and 2015 , respectively. Subsequent to the termination of all existing interest rate swaps, the Company entered into a new interest rate swap agreement with a notional principal amount of $250.0 million and a fixed three month LIBOR of 1.48% , or the 2015 Swap. The interest rate swap began on September 23, 2015 and will mature on September 23, 2018 . The interest rate swap is being used to hedge the Company’s variable rate debt. In conjunction with the closing of the 2016 Credit Facilities in December 2016, the 2015 Swap was amended to modify the fixed rate, repricing dates and embedded floor, or the Modified 2015 Swap. The Company re-designated the Modified 2015 Swap against the refinanced debt under the 2016 Credit Facilities. As a result of the re-designation, all amounts previously recorded in accumulated other comprehensive loss related to the 2015 Swap, totaling $0.8 million , were frozen and are being amortized into earnings over the term of the previously hedged borrowing using the swaplet method. The Company reclassified $0.4 million previously recorded in accumulated other comprehensive loss into interest expense associated with the 2015 Swap during the year ended December 31, 2017 . The closing of the 2016 Credit Facilities did not impact the amortization of the losses frozen in accumulated other comprehensive loss associated with the 2013 Swaps. The following table presents the notional amounts and fair values (determined using level 2 inputs) of the Company’s derivatives as of December 31, 2017 and 2016 (in thousands): Balance Sheet Classification December 31, 2017 December 31, 2016 Notional amount Asset/(Liability) Notional amount Asset/(Liability) Derivatives in an asset position: Other current assets $ 250,000 $ 428 $ — $ — Derivatives in a liability position: Other long-term liabilities — — 250,000 (590 ) 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 the consolidated balance sheets, 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 the Company's derivatives on the consolidated statements of operations and comprehensive (loss) income (in thousands): Years Ended December 31, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2017 2016 2015 Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives $ 245 $ (1,600 ) $ (11,851 ) Amount of loss recognized in other (expense) income, net on derivatives (ineffective portion) — 1 (444 ) Amount of loss recognized in other (expense) income, net on derivatives (no longer qualify for hedge accounting) — — (1,137 ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives (6,855 ) (5,921 ) (908 ) The Company expects that $6.3 million of unrealized losses will be reclassified out of accumulated other comprehensive loss and into interest expense, net over the next 12 months. In January 2018, the Company entered into two new interest rate derivative agreements. Refer to Note 22 for further details. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined contribution or profit sharing style plans are offered in Australia, Belgium, Germany, Hong Kong, India, Israel, Japan, the Netherlands, New Zealand, the Philippines, South Africa, Spain, Sweden, Thailand, and the United Kingdom. In some cases these plans are required by local laws or regulations. The Company maintains 401(k) plans in the United States, which cover substantially all employees of its U.S. subsidiaries. The Company matches participant's contributions at varying amounts, subject to a maximum contribution of 6% of the participant's compensation. The employer contributions to the 401(k) plans were approximately $11.9 million , $9.9 million and $6.6 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. As a result of the Takeda transactions during 2017, the Company maintains defined benefit pension plans sponsored by certain TDC and TDS subsidiaries in Japan and Germany. The funded status of the defined benefit pension plans, which represents the difference between the projected benefit obligation and the fair value of plan assets, is calculated on a plan-by-plan basis. The funded status of the plan in Japan, which covers approximately 130 employees, totaled $0.8 million at December 31, 2017 and was recorded in other assets on the consolidated balance sheets. The unfunded status of the plan in Germany, which covers eight employees, totaled $0.7 million at December 31, 2017 and was recorded in other long-term liabilities on the consolidated balance sheets. Additional disclosures regarding these defined benefit pension plans have been excluded due to their immateriality. The Company did not have defined benefit pension plans prior to 2017. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Below is a summary of the components of accumulated other comprehensive (loss) income (in thousands): Foreign Currency Translation Derivative Instruments Total Balance at December 31, 2014 $ (53,639 ) $ (15,870 ) $ (69,509 ) Other comprehensive loss before reclassifications, net of tax (52,433 ) (11,273 ) (63,706 ) Reclassification adjustments, net of tax — 908 908 Balance at December 31, 2015 (106,072 ) (26,235 ) (132,307 ) Other comprehensive loss before reclassifications, net of tax (95,019 ) (978 ) (95,997 ) Reclassification adjustments, net of tax — 3,618 3,618 Balance at December 31, 2016 (201,091 ) (23,595 ) (224,686 ) Other comprehensive income before reclassifications, net of tax 83,911 149 84,060 Reclassification adjustments, net of tax — 4,156 4,156 Balance at December 31, 2017 $ (117,180 ) $ (19,290 ) $ (136,470 ) Foreign Currency Translation The change in the foreign currency translation adjustment during the year ended December 31, 2017 was primarily due to the movements in the British pound, or GBP, Euro, or EUR, Canadian dollar, or CAD, and Russian ruble, or RUB, exchange rates against the U.S. dollar, or USD. The USD depreciated by 9.3% , 13.7% , 7.1% and 6.2% versus the GBP, EUR, CAD and RUB respectively, during the year ended December 31, 2017 . The movement in the GBP, EUR, CAD and RUB represented $46.0 million , $31.0 million , $3.5 million and $1.9 million , respectively, of the $83.9 million income recorded to accumulated other comprehensive loss during the year ended December 31, 2017 . The change in the foreign currency translation adjustment during the year ended December 31, 2016 was primarily due to the movements in the GBP, EUR, CAD, and RUB, exchange rates against the USD. The USD strengthened by 16.7% and 3.6% versus the GBP and EUR, respectively, during the year ended December 31, 2016 , and the USD depreciated by 3.1% and 19.5% against the CAD and RUB, respectively, during the same period. The movement in the GBP and EUR represented $90.2 million and $8.4 million , respectively, of the $95.0 million loss recorded to accumulated other comprehensive loss during the year ended December 31, 2016 . The overall change was partially offset by gains in the CAD and RUB, representing $1.1 million and $4.0 million of the adjustment, respectively. The change in the foreign currency translation adjustment during the year ended December 31, 2015 was primarily due to the movements in the GBP, EUR, and CAD exchange rates against the USD. The USD strengthened by 4.6% , 10.1% , and 16.1% against the GBP, EUR, and CAD, respectively. The movement of the GBP, EUR, and CAD represented $25.8 million , $16.4 million , and $7.1 million , respectively, of the $52.4 million loss recorded to accumulated other comprehensive loss during the year ended December 31, 2015 . Derivative Instruments See Note 15 for further information on changes to accumulated other comprehensive income related to the derivative instruments. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 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): Years Ended December 31, 2017 2016 2015 Basic weighted average common shares outstanding 62,437 60,759 59,965 Effect of dilutive stock options and RSAs/RSUs 3,336 3,693 3,242 Diluted weighted average common shares outstanding 65,773 64,452 63,207 Anti-dilutive shares 741 305 115 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. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table presents the Company’s supplemental cash flow information (in thousands): Years Ended December 31, 2017 2016 2015 Cash paid during the period for: Income taxes, net of refunds $ 47,829 $ 27,644 $ 17,148 Interest 48,330 48,156 54,632 Non-cash investing and financing activities: Issuance of common stock for the acquisition of Value Health Solutions, Inc. 369 — 1,582 Accrued fixed assets purchases 3,962 2,644 2,733 Cashless exercises of stock options 13,252 9,456 1,672 Additionally, the acquisition date fair value of contingent consideration liabilities recorded during the year ended December 31, 2017 totaled $155.8 million . Refer to Note 2 - Significant Accounting Polices and Note 4 - Business Combinations for further information. |
Operations by Geographic Area
Operations by Geographic Area | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Operations by Geographic Area | Operations by Geographic Area The table below presents certain enterprise‑wide information about the Company’s operations by geographic area for the years ended December 31, 2017 , 2016 and 2015 . The Company attributes revenues to geographical locations based upon where the services are performed. The Company’s operations within each geographical region are further broken down to show each country which accounts for 10% or more of the totals (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Americas: United States $ 1,310,772 $ 1,063,625 $ 898,637 Other 42,227 33,320 32,802 Americas 1,352,999 1,096,945 931,439 Europe, Africa, and Asia-Pacific United Kingdom 479,623 394,363 364,476 Netherlands 79,555 68,118 57,739 Other 36,197 20,597 22,193 Europe, Africa, and Asia-Pacific 595,375 483,078 444,408 Total service revenue 1,948,374 1,580,023 1,375,847 Reimbursement revenues 311,015 231,688 238,036 Total revenue $ 2,259,389 $ 1,811,711 $ 1,613,883 December 31, 2017 2016 Long-lived assets: Americas: United States $ 107,952 $ 60,462 Other 1,714 802 Americas 109,666 61,264 Europe, Africa, and Asia-Pacific United Kingdom 4,182 3,569 Netherlands 15,876 13,313 Other 13,346 9,431 Europe, Africa, and Asia-Pacific 33,404 26,313 Total long-lived assets $ 143,070 $ 87,577 Segments Historically, the Company has had one reportable segment. In conjunction with the acquisition of Symphony Health, the Company expanded its reporting segments. The Company is now managed through two reportable segments, (i) Clinical Research and (ii) Data Solutions. In accordance with the provisions of ASC 280, "Segment Reporting", the Company's chief operating decision-maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. • Clinical Research Segment : The Clinical Research segment, which primarily serves biopharmaceutical clients, provides outsourced clinical research and clinical trial related services. • Data Solutions Segment : The Data Solutions segment provides data and analytics, technology solutions and real-world insights and services primarily to the Company’s life science clients. The Company's chief operating decision maker uses gross profit as the primary measure of each segment's operating results in order to allocate resources and in assessing the Company's performance. Reimbursement revenue and reimbursable out-of-pocket costs are not allocated to the Company's segments. Asset information by segment is not presented, as this measure is not used by the chief operating decision maker to assess the Company's performance. The Company’s reportable segment information is presented below (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Clinical Research $ 1,857,876 $ 1,580,023 $ 1,375,847 Data Solutions 90,498 — — Total service revenue 1,948,374 1,580,023 1,375,847 Direct costs: Clinical Research 1,231,690 1,032,688 886,528 Data Solutions 52,178 — — Total direct costs 1,283,868 1,032,688 886,528 Gross profit: Clinical Research 626,186 547,335 489,319 Data Solutions 38,320 — — Total gross profit $ 664,506 $ 547,335 $ 489,319 Less expenses not allocated to segments: Selling, general and administrative 321,987 269,893 246,417 Transaction-related costs 87,709 44,834 — Depreciation and amortization 78,227 69,506 77,952 Loss on disposal of fixed assets, net 358 753 652 Consolidated income from operations 176,225 162,349 164,298 Interest expense, net (46,729 ) (54,913 ) (61,747 ) Loss on modification or extinguishment of debt (15,023 ) (38,178 ) — Foreign currency (losses) gains, net (39,622 ) 24,029 14,048 Other (expense) income, net (304 ) 607 (1,434 ) Consolidated income before income taxes and equity in income (losses) of unconsolidated joint ventures $ 74,547 $ 93,894 $ 115,165 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company entered into a joint venture with an affiliate of KKR during 2015. The joint venture was dissolved during the same year. For further discussion on the related party transaction, refer to Note 3. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segments | Operations by Geographic Area The table below presents certain enterprise‑wide information about the Company’s operations by geographic area for the years ended December 31, 2017 , 2016 and 2015 . The Company attributes revenues to geographical locations based upon where the services are performed. The Company’s operations within each geographical region are further broken down to show each country which accounts for 10% or more of the totals (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Americas: United States $ 1,310,772 $ 1,063,625 $ 898,637 Other 42,227 33,320 32,802 Americas 1,352,999 1,096,945 931,439 Europe, Africa, and Asia-Pacific United Kingdom 479,623 394,363 364,476 Netherlands 79,555 68,118 57,739 Other 36,197 20,597 22,193 Europe, Africa, and Asia-Pacific 595,375 483,078 444,408 Total service revenue 1,948,374 1,580,023 1,375,847 Reimbursement revenues 311,015 231,688 238,036 Total revenue $ 2,259,389 $ 1,811,711 $ 1,613,883 December 31, 2017 2016 Long-lived assets: Americas: United States $ 107,952 $ 60,462 Other 1,714 802 Americas 109,666 61,264 Europe, Africa, and Asia-Pacific United Kingdom 4,182 3,569 Netherlands 15,876 13,313 Other 13,346 9,431 Europe, Africa, and Asia-Pacific 33,404 26,313 Total long-lived assets $ 143,070 $ 87,577 Segments Historically, the Company has had one reportable segment. In conjunction with the acquisition of Symphony Health, the Company expanded its reporting segments. The Company is now managed through two reportable segments, (i) Clinical Research and (ii) Data Solutions. In accordance with the provisions of ASC 280, "Segment Reporting", the Company's chief operating decision-maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. • Clinical Research Segment : The Clinical Research segment, which primarily serves biopharmaceutical clients, provides outsourced clinical research and clinical trial related services. • Data Solutions Segment : The Data Solutions segment provides data and analytics, technology solutions and real-world insights and services primarily to the Company’s life science clients. The Company's chief operating decision maker uses gross profit as the primary measure of each segment's operating results in order to allocate resources and in assessing the Company's performance. Reimbursement revenue and reimbursable out-of-pocket costs are not allocated to the Company's segments. Asset information by segment is not presented, as this measure is not used by the chief operating decision maker to assess the Company's performance. The Company’s reportable segment information is presented below (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Clinical Research $ 1,857,876 $ 1,580,023 $ 1,375,847 Data Solutions 90,498 — — Total service revenue 1,948,374 1,580,023 1,375,847 Direct costs: Clinical Research 1,231,690 1,032,688 886,528 Data Solutions 52,178 — — Total direct costs 1,283,868 1,032,688 886,528 Gross profit: Clinical Research 626,186 547,335 489,319 Data Solutions 38,320 — — Total gross profit $ 664,506 $ 547,335 $ 489,319 Less expenses not allocated to segments: Selling, general and administrative 321,987 269,893 246,417 Transaction-related costs 87,709 44,834 — Depreciation and amortization 78,227 69,506 77,952 Loss on disposal of fixed assets, net 358 753 652 Consolidated income from operations 176,225 162,349 164,298 Interest expense, net (46,729 ) (54,913 ) (61,747 ) Loss on modification or extinguishment of debt (15,023 ) (38,178 ) — Foreign currency (losses) gains, net (39,622 ) 24,029 14,048 Other (expense) income, net (304 ) 607 (1,434 ) Consolidated income before income taxes and equity in income (losses) of unconsolidated joint ventures $ 74,547 $ 93,894 $ 115,165 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) The following table summarizes the Company’s unaudited quarterly results of operations (in thousands, except per share data: 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Service revenue $ 427,080 $ 457,942 $ 494,550 $ 568,802 Reimbursement revenue 60,680 75,782 87,459 87,094 Total revenue 487,760 533,724 582,009 655,896 Income from operations (1) 49,986 64,850 57,776 3,613 Provision for (benefit from) income taxes (2) 7,883 10,193 (18,241 ) (12,458 ) Income (loss) before equity in gains of unconsolidated joint ventures (3) 25,182 29,632 48,582 (16,226 ) Equity in gains of unconsolidated joint ventures 42 26 24 31 Net income (loss) 25,224 29,658 48,606 (16,195 ) Net (income) loss attributable to non-controlling interests — (112 ) (401 ) 147 Net income (loss) attributable to PRA Health Sciences, Inc. 25,224 29,546 48,205 (16,048 ) Comprehensive income (loss) 42,552 63,892 75,348 (6,380 ) Comprehensive income (loss) attributable to noncontrolling interest — (50 ) (373 ) 154 Comprehensive income (loss) attributable to PRA Health Sciences, Inc. $ 42,552 $ 63,842 $ 74,975 $ (6,226 ) Basic earnings (loss) per share (4) $ 0.41 $ 0.47 $ 0.77 $ (0.25 ) Diluted earnings (loss) per share (4) $ 0.39 $ 0.45 $ 0.73 $ (0.25 ) 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Service revenue $ 372,320 $ 394,249 $ 399,841 $ 413,613 Reimbursement revenue 57,903 61,598 53,414 58,773 Total revenue 430,223 455,847 453,255 472,386 Income from operations (5) 18,946 50,348 54,814 38,241 (Benefit from) provision for income taxes (5,264 ) 12,312 10,821 10,625 (Losses) income before equity in (losses) gains of unconsolidated joint ventures (6) (15,431 ) 35,423 31,416 13,992 Equity in (losses) gains of unconsolidated joint ventures (538 ) 3,247 33 33 Net (loss) income (15,969 ) 38,670 31,449 14,025 Comprehensive (loss) income $ (22,251 ) $ 567 $ 21,982 $ (24,502 ) Basic (losses) earnings per share (4) $ (0.27 ) $ 0.64 $ 0.52 $ 0.23 Diluted (losses) earnings per share (4) $ (0.27 ) $ 0.60 $ 0.49 $ 0.22 (1) During the three months ended December 31, 2017, the Company recorded $75.0 million of transaction-related costs associated with the change in fair value of contingent consideration. During the three months ended September 30, 2017, transaction-related costs consisted of $6.4 million of fees incurred in connection with the acquisition of Symphony Health, $5.3 million of stock-based compensation expense related to the release of the transfer restrictions on vested options, and $1.0 million of third-party fees incurred in connection with the August 2017 secondary offering; these amounts were offset by a $1.0 million adjustment to the change in fair value of contingent consideration. As discussed in Note 2 - Significant Accounting Policies, the Company made an accounting policy election to present changes in the fair value of contingent consideration as part of income from operations during the fourth quarter of 2017. As a result, the Company reclassified $0.1 million of costs in both the three months ended March 31, 2017 and June 30, 2017, as well as a $1.0 million benefit during the three month ended September 30, 2017, into income from operations. (2) During the three months ended September 30, 2017 and December 31, 2017, the Company recorded a benefit from income taxes of $18.2 million and $12.5 million , respectively. The benefit was due primarily to (i) the benefit realized from the tax deduction of stock awards in excess of the amount recognized in the financial statements per guidance under ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, (ii) the release of the valuation allowance against the federal net deferred tax assets, and additionally during the three months ended December 31, 2017 (iii) the U.S. federal rate decrease effect on an overall net deferred tax liability due to the recent law changes in the Tax Cuts and Jobs Act. (3) During the three months ended September 30, 2017 and December 31, 2017, the Company recorded a loss on extinguishment of debt of $3.1 million and $11.9 million , respectively. The loss on extinguishment of debt recorded during the three months ended September 30, 2017 related to the Incremental Borrowings on the Company’s term debt. The loss on extinguishment of debt recorded during the three months ended December 31, 2017 related to the refinancing of the Company’s 2016 Credit Facilities and the redemption of the Company's Senior Notes. Refer to Note 9, Current Borrowings and Long-Term Debt, for additional information regarding the items noted above. (4) The sum of the quarterly per share amounts may not equal per share amounts reported for year‑to‑date periods. This is due to changes in the number of weighted average shares outstanding and the effects of rounding for each period. (5) Transaction-related costs for the three months ended March 31, 2016, June 30, 2016 and December 31, 2016 were $28.9 million , $2.9 million and $13.0 million , respectively. There were no transaction-related costs for the three months ended September 30, 2016. Transaction-related costs primarily relate to costs incurred in connection with the March, May and November 2016 secondary offerings and receivables financing agreement. These costs include $42.2 million of non-cash stock-based compensation expense and $2.7 million of third-party fees. (6) During the three months ended March 31, 2016 and December 31, 2016, the Company recorded a loss on extinguishment of debt of $21.5 million and $16.7 million , respectively. The loss on extinguishment of debt recorded during the three months ended March 31, 2016 related to the cash tender offer on the Company’s Senior Notes. The loss on extinguishment of debt recorded during the three months ended December 31, 2016 related to the refinancing of the Company’s 2013 Credit Facilities. Refer to Note 9, Current Borrowings and Long-Term Debt, for additional information regarding the cash tender on the Senior Notes and the 2013 Credit Facilities refinancing. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 5, 2018, the Company entered into two new interest rate swaps in order to minimize its exposure to variable rate debt and also to replace interest rate swaps maturing in September 2018. The first interest rate swap has an aggregate notional amount of $375.0 million , an effective date of January 8, 2018, and a maturity date of December 6, 2020. The second interest rate swap has an aggregate notional amount of $250.0 million , an effective date of September 6, 2018, and a maturity date of September 6, 2020. In February 2018, the Company made an earn-out payment of $114.7 million to the former shareholders of Symphony Health. For further discussion of the earn-out liability, refer to Note 4 - Business Combinations. |
Significant Accounting Polici32
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts and operations of the Company, its subsidiaries and investments in which the Company has control. Amounts pertaining to the non-controlling ownership interests held by third parties in the operating results and financial position of the Company’s majority-owned subsidiaries are reported as non-controlling interests. Intercompany accounts and transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities Financial Accounting Standards Board’s, or FASB, accounting guidance concerning variable interest entities, or VIE, addresses the consolidation of 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 variable interest entity. Application of the VIE consolidation requirements may require the exercise of significant judgment by management. Takeda PRA Development Center KK The Company entered into a joint venture with Takeda Pharmaceutical Company Ltd. during 2017. For further discussion on the joint venture, refer to Note 4, Business Combinations. Accounts Receivable Financing Agreement 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 9, Revolving Credit Facilities and Long-Term Debt, for additional information regarding the accounts receivable financing agreement. |
Risks and Other Factors | Risks and Other Factors The Company’s revenues are dependent on research and development expenditures of the pharmaceutical and biotechnology industries. Any significant reduction in research and development expenditures by the pharmaceutical and biotechnology industries could have a material adverse effect on the Company and its results of operations. Clients of the Company generally may terminate contracts without cause upon 30 to 60 days’ notice. While the Company generally negotiates deposit payments and early termination fees up front, such terminations could significantly impact the future level of staff utilization and have a material adverse effect on the Company and the results of future operations. |
Use of Estimates | Use of Estimates The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. In particular, the Company’s primary method of revenue recognition requires estimates of costs to be incurred to fulfill existing long-term contract obligations. Actual results could differ from those estimates. Estimates are also used when accounting for certain items such as allowance for doubtful accounts, depreciation and amortization, asset impairment, certain acquisition-related assets and liabilities including contingent consideration, income taxes, fair market value determinations, and contingencies. |
Reportable Segments | Reportable Segments In conjunction with the acquisition of Symphony Health, the Company expanded its reporting segments. The Company is now managed through two reportable segments, Clinical Research and Data Solutions. Clinical Research, which primarily serves biopharmaceutical clients, provides outsourced clinical research and clinical trial related services. Data Solutions provides data and analytics, technology solutions and real-world insights and services to companies in the pharmaceutical industry. The Clinical Research segment is solely focused on the execution of clinical trials on a global basis. The Company has considered whether the delivery of the different types of capabilities in various stages of clinical development constitute separate products or lines of service in accordance with Accounting Standards Codification, or ASC, 280, “Segment Reporting,” or ASC 280, and has concluded that there are substantial similarities and overlaps in the capabilities delivered at each stage of clinical development, with the primary differences between the Early Development Services, or EDS, compared to the Product Registration, or PR, and Strategic Solutions, or SS, relating to the points during the life cycle of a clinical trial at which such capabilities are delivered. After review and analysis of the operating characteristics of each service offering and using the aggregation characteristics under ASC 280, the Company has concluded that the services provided are similar across most characteristics. The Company's operations consist of two reportable segments, which represents management's view of the Company's operations based on its management and internal reporting structure. The Company considered the guidance in ASC 350, “Intangibles—Goodwill and Other,” which notes that a reporting unit is an operating segment or one level below an operating segment. PR, EDS, and SS are the business units that are one level below the Company’s Clinical Research operating segment and the Company determined that they meet the definition of “components,” as discrete financial information exists and this information is regularly reviewed by management. The Data Solutions operating segment does not have any material components. |
Business Combinations | Business Combinations Business combinations are accounted for using the acquisition method and, accordingly, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date of the acquisition. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired, including the amount assigned to identifiable intangible assets. Contingent Consideration The consideration for the Company’s acquisitions may include potential future earn-out payments that are contingent upon the occurrence of particular events. These payments might be based on the achievement of future revenue or earnings milestones. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations, excluding adjustments that qualify as measurement period adjustments, are recognized within the Company’s consolidated statements of operations. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or probability of achieving certain revenue or earnings targets. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions or actual results could have a material impact on the amount of contingent consideration expense the Company records in any given period. |
Contingent Liabilities | Contingent Liabilities The Company provides for contingent liabilities when (1) it is probable that an asset has been impaired or a liability has been incurred at the date of the consolidated financial statements and (2) the amount of the loss can be reasonably estimated. Disclosure in the notes to the consolidated financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. The Company expenses as incurred the costs of defending legal claims against the Company. |
Cash Equivalents | Cash Equivalents The Company considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2017 and 2016 , substantially all of the Company’s cash and cash equivalents were held in or invested with large financial institutions. Certain bank deposits may at times be in excess of the Federal Deposit Insurance Corporation insurance limits. |
Restricted Cash | Restricted cash The Company receives cash advances from its customers to be used for the payment of investigator costs and other pass-through expenses. The terms of certain customer contracts require that such advances be maintained in separate escrow accounts; these accounts are not commingled with the Company’s cash and cash equivalents and are presented separately in the consolidated balance sheets as restricted cash. |
Accounts Receivable and Unbilled Services | Accounts Receivable and Unbilled Services Accounts receivable represent amounts for which invoices have been sent to clients based upon contract terms. Unbilled services represent amounts earned for services that have been rendered but for which clients have not been billed and include reimbursement revenue. Unbilled services are generally billable upon submission of appropriate billing information, achievement of contract milestones or contract completion. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company performs credit reviews of each customer, monitors collections and payments from customers, and determines the allowance based upon historical experience and specific customer collection issues. The Company ages billed accounts receivable and assesses exposure by customer type, by aged category, and by specific identification. After all attempts to collect a receivable have failed, the receivable is written off against the allowance or, to the extent unreserved, to bad debt expense. |
Advanced Billings | Advanced Billings Advanced billings represent amounts associated with services, reimbursement revenue and investigator fees that have been received but have not yet been earned or paid. |
Fixed Assets | Fixed Assets Fixed assets and software purchased or developed for internal use are recorded at cost and are depreciated on a straight-line basis over the following estimated useful lives: Furniture, fixtures and equipment 5-7 years Computer hardware and software 3-7 years Leasehold improvements Lesser of the life of the lease or useful life of the improvements |
Internal Use Software | Internal Use Software The Company accounts for internal use software in accordance with the guidance in ASC 350‑40, “Internal-Use Software," which require certain direct costs and interest costs incurred during the application stage of development to be capitalized and amortized over the useful life of the software. |
Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes interest rate swaps to manage changes in market conditions related to debt obligations. All derivatives are measured at fair value and recognized as either assets or liabilities on the consolidated balance sheets. Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding effect on earnings. Changes in the fair value of derivatives that are designated and determined to be effective as part of a hedge transaction have no immediate effect on earnings and depending on the type of hedge, are recorded either as part of other comprehensive loss and will be included in earnings in the period in which earnings are affected by the hedged item, or are included in earnings as an offset to the earnings impact of the hedged item. Any ineffective portion of hedges is reported in earnings as it occurs. Amounts previously recorded in accumulated other comprehensive loss related to these interest rate swaps will be reclassified into earnings over the term of the previously hedged borrowing using the swaplet method. The Company has elected the accounting policy that cash flows associated with interest rate derivative contracts are classified as cash flows from investing activities. |
Fair Value Measurements | 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived asset groups, including furniture and equipment, computer hardware and software, leasehold improvements, and other finite-lived intangibles, when events or changes in circumstances occur that indicate the carrying value of the asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The Company’s primary measure of fair value is based on discounted cash flows. The measurement of impairment requires the Company to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if an event or circumstance indicates that an impairment loss may have been incurred. Separate intangible assets that have finite useful lives are amortized over their estimated useful lives or over the period in which economic benefit is received. The Company’s primary finite-lived intangibles are customer relationships, customer backlog, and acquired databases, which are amortized on an accelerated basis, which coincides with the period of economic benefit received by the Company. The Company reviews the carrying value of goodwill to determine whether impairment may exist on an annual basis or whenever it has reason to believe goodwill may not be recoverable. The annual impairment test of goodwill is performed during the fourth quarter of each fiscal year. The Company did not have an impairment for any of the years presented. When evaluating for impairment, the Company may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or indefinite-lived intangible asset is impaired. If the Company does not perform a qualitative assessment, or if it determines that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset exceeds its carrying amount, the Company will calculate the estimated fair value of the reporting unit or indefinite-lived intangible asset. The Company’s decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition. During 2017 , as part of the Company’s annual impairment analysis, the Company performed the qualitative assessment for all of its goodwill and indefinite-lived trade name intangible asset balances. If the Company does not perform a qualitative assessment, goodwill impairment is determined by the Company using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of each reporting unit, determined using various valuation techniques, with the primary technique being a discounted cash flow analysis, to its carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized. |
Revenue Recognition | Revenue Recognition The Company generally enters into contracts with customers to provide services with payments based on either fixed-fee, time and materials, or fee-for-service arrangements. Revenue for services is recognized only after persuasive evidence of an arrangement exists, the sales price is determinable, services have been rendered, and collectability is reasonably assured. Once these criteria have been met, the Company recognizes revenue for the services provided on fixed-fee contracts in the Clinical Research segment based on the proportional performance methodology, which determines the proportion of outputs or performance obligations which have been completed or delivered compared to the total contractual outputs or performance obligations. To measure performance, the Company compares the contract costs incurred to estimated total contract costs through completion. As part of the client proposal and contract negotiation process, the Company develops a detailed project budget for the direct costs based on the scope of the work, the complexity of the study, the geographical location involved and the Company’s historical experience. The Company then establishes the individual contract pricing based on the Company’s internal pricing guidelines, discount agreements, if any, and negotiations with the client. The estimated total contract costs are reviewed and revised periodically throughout the lives of the contracts, with adjustments to revenue resulting from such revisions being recorded on a cumulative basis in the period in which the revisions are first identified. Contract costs consist primarily of direct labor and other project-related costs. The Company recognizes revenue for services provided on fixed-fee contracts in the Data Solutions segment either ratably as earned over the contract period, for subscription-based services, or upon delivery, for one-time delivery of data solutions or reports. Revenue from time and materials contracts is recognized as hours are incurred. Revenues and the related costs of fee-for-service contracts are recognized in the period in which services are performed. In the Clinical Research segment, a majority of contracts undergo modifications over the contract period and the Company’s contracts provide for these modifications. During the modification process, the Company recognizes revenue to the extent it incurs costs, provided client acceptance and payment is deemed reasonably assured. Volume discounts are offered to certain large customers based on annual volume thresholds. The Company records an estimate of the annual volume rebate as a reduction of revenue throughout the period based on the estimated total rebate to be earned for the period. Most contracts in the Clinical Research segment can be terminated by the client either immediately or after a specified period following notice. These contracts require the client to pay the Company the fees earned through the termination date, the fees and expenses to wind down the study, and, in some cases, a termination fee or some portion of the fees or profit that the Company could have earned under the contract if it had not been terminated early. Therefore, revenue recognized prior to cancellation generally does not require a significant adjustment upon cancellation. |
Reimbursement Revenue and Reimbursable Out-of-Pocket Costs | Reimbursement Revenue and Reimbursable Out-of-Pocket Costs The Company incurs out-of-pocket costs, in excess of contract amounts, which are reimbursable by its customers. The Company includes out-of-pocket costs both as reimbursement revenue and as reimbursable out-of-pocket costs in the consolidated statements of operations. As is customary in the industry, the Company routinely enters into separate agreements on behalf of its clients with independent physician investigators in connection with clinical trials. The funds received for investigator fees are netted against the related cost because such fees are the obligation of the Company’s clients, without risk or reward to the Company. The Company is not obligated either to perform the service or to pay the investigator in the event of default by the client. In addition, the Company does not pay the independent physician investigator until funds are received from the client. |
Concentration of Credit Risk | 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 December 31, 2017 , 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. |
Foreign Currency | Foreign Currency The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the end of the period. Equity activities are translated at the spot rate effective at the date of the transaction. Revenue and expense accounts and cash flows of these operations are translated at average exchange rates prevailing during the period the transactions occurred. Translation gains and losses are included as an adjustment to the accumulated other comprehensive loss account in stockholders’ equity. Translation gains and losses from foreign currency transactions, such as those resulting from the settlement and revaluation of foreign receivables and payables, are included in the determination of net income. These amounts are included in foreign currency (losses) gains, net in the consolidated statements of operations. In addition, gains or losses related to the Company’s intercompany loans payable and receivable denominated in a foreign currency other than the subsidiary’s functional currency that are deemed to be of a long-term investment nature are remeasured to cumulative translation and recorded in accumulated other comprehensive loss in the consolidated balance sheets. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for future deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, a valuation allowance is established to reduce the deferred tax asset to the amount that is more likely than not to be realized. Deferred tax liabilities are recognized for future taxable temporary differences. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in time may change based on the outcome of tax audits, as well as changes to, or further interpretations of, regulations. Income tax expense is adjusted in the period in which these events occur, and these adjustments are included in the Company’s consolidated statement of operations. If such changes take place, there is a risk that the Company’s effective tax rate may increase or decrease in any period. A company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. |
Stock-Based Compensation | Stock-Based Compensation The primary type of stock-based compensation utilized by the Company is stock options. Stock options are awards which allow the employee to purchase shares of the Company’s stock at a fixed price. The Company measures compensation cost at the grant date, based on fair value of the award, and recognizes it as expense over the employees’ requisite service period. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant. The expected life represents the period of time the grants are expected to be outstanding. The Company uses the historical volatilities of a selected peer group as it does not have sufficient history to estimate the volatility of its common share price. The Company calculates expected volatility based on reported data for selected reasonably similar publicly traded companies for which the historical information is available. For the purpose of identifying peer companies, the Company considers characteristics such as industry, length of trading history, similar vesting terms and in-the-money option status. Due to the absence of an active market for the Company’s common shares prior to the Company’s IPO, the fair value of the Company's common shares for purposes of determining the exercise price for award grants was determined in good faith by the Company’s Board of Directors, or Board, with the assistance and upon the recommendation of management based on a number of market factors, including: the common shares underlying the award involved illiquid securities in a private company; results of operations and financial position; and the market performance of publicly traded companies compared to the Company. The Company accounts for its stock-based compensation for restricted share awards and restricted share units, or collectively, RSAs/RSUs, based on the closing market price of the Company’s common stock on the trading day immediately prior to the grant date |
Net Income (Loss) Per Share | Net Income Per Share The calculation of net income per share, or EPS, is based on the weighted average number of common shares or common stock equivalents outstanding during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per share and is included in the calculation of diluted earnings per share, unless the effect of inclusion would be anti-dilutive. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs relating to the Company’s long-term debt are recorded as a direct reduction of long-term debt; these costs are deferred and amortized to interest expense using the effective interest method, over the respective terms of the related debt. Debt issuance costs relating to the Company’s revolving credit facilities are recorded as an asset; these costs are deferred and amortized to interest expense using the straight-line method. |
Compensated Absences | Compensated Absences The Company accrues for the costs of compensated absences to the extent that the employee’s right to receive payment relates to service already rendered, the obligation vests or accumulates, payment is probable and the amount can be reasonably estimated. The Company’s policies related to compensated absences vary by jurisdiction and obligations are recorded net of estimated forfeiture due to turnover when reasonably predictable. |
Operating Leases | Operating Leases The Company records rent expense for operating leases, some of which have escalating rent over the term of the lease, on a straight-line basis over the initial effective lease term. The Company begins depreciation on the date of initial possession, which is generally when the Company enters the space and begins to make improvements in preparation for its intended use. Some of the Company’s facility leases provide for concessions by the landlords, including payments for leasehold improvements considered tenant assets, free rent periods, and other lease inducements. The Company reflects these concessions as deferred rent in the accompanying consolidated financial statements. The Company accounts for the difference between rent expense and rent paid as deferred rent. For tenant allowances for improvements considered to be tenant assets, rent holidays and other lease incentives, the Company records a deferred rent liability at the inception of the lease term and amortizes the deferred rent over the term of the lease as a reduction to rent expense. For tenant allowances considered to be property owner assets, the payment is treated as a reimbursement for the cost of the lessor asset. |
Recently Implemented Accounting Standards | Recently Implemented Accounting Standards In March 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or 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. In addition, ASU No. 2016-09 went into effect for public companies for annual periods beginning after December 15, 2016. The Company adopted this ASU beginning with the first quarter of 2017. The adoption of this ASU had the following effects on the consolidated financial statements: Income taxes - The standard requires excess tax benefits and tax deficiencies to be recorded as income tax benefit or expense in the statement of operations. The Company applied the modified retrospective adoption approach beginning in 2017 and recorded a cumulative-effect adjustment to retained earnings and reduced its deferred tax liabilities by $12.6 million with an offsetting increase to the valuation allowance of $12.6 million . As such, the net impact to retained earnings was zero . This adjustment relates to tax assets that had previously arisen from tax deductions for equity compensation expenses that were greater than the compensation recognized for financial reporting. During the year ended December 31, 2017, the Company recorded $33.7 million in 2017 excess tax benefits associated with equity awards within (benefit from) provision for income taxes on the consolidated statement of operations. Forfeitures – The standard provides an accounting policy election to account for forfeitures as they occur. The Company made this accounting policy election and the modified retrospective adoption for this component of the standard did not have a material impact on its financial statements. Statements of Cash Flows - Cash flows related to excess tax benefits are no longer separately classified as a financing activity apart from other income tax cash flows. The Company adopted this component of the standard on a prospective basis. Earnings Per Share - The Company uses the treasury stock method to compute diluted earnings per share, unless the effect would be anti-dilutive. Under this method, the Company is no longer required to estimate the tax rate and apply it to the dilutive share calculation for determining the dilutive earnings per share. The Company adopted this component of the standard on a prospective basis. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers” (ASC 606). The new revenue standard establishes a single revenue recognition model for recognizing contracts from customers. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method. The Company will adopt the new standard effective January 1, 2018 using the modified retrospective transition method. Under this approach, the cumulative earnings effect of adoption of ASC 606 applied to all open contracts will be recorded as an adjustment to opening retained earnings as of January 1, 2018. For the Clinical Research segment, the identification of the number of performance obligations implicit within an arrangement is critical to the application of ASC 606. Currently, the Company considers investigator fees and reimbursable out-of-pocket costs distinct from the service portion of the arrangements. Investigator fees have historically been netted against the related costs and out-of-pocket costs are recognized as revenue and expense to the extent incurred. With the adoption of ASC 606, the Company’s long-term arrangements currently accounted for using the proportional performance method will be considered a single performance obligation which requires the inclusion of investigator fees and out-of-pocket costs in both the contract revenue value and in the cost used to measure performance. Upon adoption of ASC 606, total revenue will be presented as one line item in the consolidated statements of operations. Total revenue will now include service revenue, out-of-pocket costs, and investigator fees that were previously recorded net of the associated cost. As a result of the change in presentation for investigator fees, total revenue and total costs will materially increase. The inclusion of investigator fees and out-of-pocket costs in the measurement of progress under these contracts as part of one performance obligation may create a timing difference between amounts the Company is entitled to receive in reimbursement for costs incurred and the amount of revenue recognized related to such costs on individual projects. This represents a change from current accounting treatment. The magnitude of this timing item compared to current accounting is dependent on the relative size and progress of the direct service portion of the arrangement compared to the progress of the investigator fees and reimbursable out-of-pocket costs relative to their respective forecasted costs over the life of the project. The Company is finalizing its assessment of the cumulative impact but anticipates a material deferral of revenue to be recorded as a cumulative adjustment upon adoption. The accounting for contracts within the Data Solutions segment and for short-term contracts within the Clinical Research segment is expected to remain materially consistent with the current accounting treatment. 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 statement of operations. The provisions of ASU No. 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 has established an implementation team to assist with the adoption of the new standard. The evaluation and implementation process is ongoing and is expected to continue through 2018 as the Company performs an analysis of its lease portfolio to identify potential differences from its current accounting policies, and as it reviews the business processes, systems and controls required to support recognition and disclosure under the new standard. 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. |
Significant Accounting Polici33
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands): December 31, 2017 2016 2015 Cash and cash equivalents $ 192,229 $ 144,623 $ 121,065 Restricted cash 661 4,715 5,060 Total cash, cash equivalents, and restricted cash $ 192,890 $ 149,338 $ 126,125 |
Schedule of estimated useful lives of fixed assets | Fixed assets and software purchased or developed for internal use are recorded at cost and are depreciated on a straight-line basis over the following estimated useful lives: Furniture, fixtures and equipment 5-7 years Computer hardware and software 3-7 years Leasehold improvements Lesser of the life of the lease or useful life of the improvements |
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 December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Assets: Interest rate swap $ — $ 428 $ — $ 428 Marketable securities 393 — — 393 Total $ 393 $ 428 $ — $ 821 Liabilities: Contingent consideration $ — $ — $ 50,644 $ 50,644 Total $ — $ — $ 50,644 $ 50,644 The following table summarizes the fair value of the Company’s financial assets and liabilities that are measured on a recurring basis as of December 31, 2016 (in thousands): Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ 590 $ — $ 590 Contingent consideration — — 2,754 2,754 Total $ — $ 590 $ 2,754 $ 3,344 |
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 (in thousands): Contingent consideration - Accrued expenses and other current liabilities Contingent consideration - Other long-term liabilities Balance at December 31, 2015 $ 999 $ — Initial estimate of Nextrials contingent consideration — 2,282 Revaluations included in earnings — (527 ) Reclassification adjustment 736 (736 ) Balance at December 31, 2016 1,735 1,019 Initial estimate of Symphony Health contingent consideration 90,394 18,390 Initial estimate of Parallel 6, Inc. contingent consideration — 8,350 Payments on Nextrials contingent consideration (400 ) — Payments on Symphony Health contingent consideration (67,788 ) — Measurement period adjustments 24,388 14,279 Changes in fair value included in earnings 66,363 8,606 Transfer out (114,692 ) — Balance at December 31, 2017 $ — $ 50,644 |
Schedule of weighted-average assumptions used for calculating fair values of stock options granted | The fair value of each option issued during these periods was estimated on the date of grant using the Black-Scholes option pricing model for service condition awards with the following weighted average assumptions: Years Ended December 31, 2017 2016 2015 Risk-free interest rate 1.9 % 1.5 % 1.7 % Expected life, in years 6.3 6.3 6.3 Dividend yield N/A N/A N/A Volatility 29.7 % 31.2 % 34.4 % |
Customer Concentration Risk | Service revenue | |
Schedule of concentration of risk by risk factor | Service revenue from individual customers greater than 10% of consolidated service revenue in the respective periods was as follows: Years Ended December 31, 2017 2016 2015 Customer A 10.3 % 11.0 % — Customer B — 10.4 % 10.7 % |
Customer Concentration Risk | Accounts receivable and unbilled receivables | |
Schedule of concentration of risk by risk factor | 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: December 31, 2017 2016 Customer A 11.5 % 12.0 % |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The Company’s purchase price allocation is as follows (in thousands): Purchase Weighted Cash and cash equivalents $ 94 Accounts receivable and unbilled services 211 Other current assets 96 Property, plant and equipment 111 Software intangible 5,574 5 years Accounts payable and accrued expenses (1,585 ) Other long-term liabilities (1,663 ) Estimated fair value of net assets acquired 2,838 Purchase price, including contingent consideration 7,145 Total goodwill $ 4,307 The Company’s preliminary estimate of the purchase price allocation is as follows (in thousands): Purchase Price Allocation Weighted Amortization Period Cash and cash equivalents $ 26,297 Accounts receivable and unbilled services 39,132 Other current assets 23,726 Fixed assets 12,340 Customer relationships 190,100 10 years Database 137,100 3 years Tradename 2,000 2 years Accounts payable and accrued expenses (42,222 ) Advanced billings (65,968 ) Deferred tax liabilities (104,869 ) Other long-term liabilities (6,740 ) Estimated fair value of net assets acquired 210,896 Purchase price, including contingent consideration and working capital adjustment 686,877 Total goodwill $ 475,981 The Company’s purchase price allocation is as follows (in thousands): Purchase Price Allocation Weighted Amortization Period Cash and cash equivalents $ 132 Accounts receivable and unbilled services 929 Other current assets 26 Software intangible 15,500 5 years Other intangibles 920 5 years Accounts payable and accrued expenses (780 ) Advanced billings (692 ) Other long-term liabilities (1,148 ) Estimated fair value of net assets acquired 14,887 Purchase price, including contingent consideration 47,339 Total goodwill $ 32,452 The Company’s purchase price allocation is as follows (in thousands): Purchase Price Allocation Weighted Amortization Period Software intangible $ 2,500 5 years Property, plant and equipment 43 Estimated fair value of net assets acquired 2,543 Purchase price, including contingent consideration 3,499 Total goodwill $ 956 |
Schedule of unaudited pro-forma information | The following unaudited pro-forma information assumes the acquisition of Symphony Health occurred as of the beginning of 2016. This pro-forma financial information is not necessarily indicative of operating results if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. December 31, (in thousands, except per share amounts) 2017 2016 Total revenue $ 2,408,770 $ 2,011,544 Net income attributable to PRA Health Sciences, Inc. 104,700 45,836 Net income per share: Basic $ 1.68 $ 0.75 Diluted $ 1.59 $ 0.71 |
Accounts Receivable and Unbil35
Accounts Receivable and Unbilled Services (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of 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 (in thousands): December 31, 2017 2016 Accounts receivable $ 457,676 $ 284,647 Unbilled services 170,760 155,609 Total accounts receivable and unbilled services 628,436 440,256 Less allowance for doubtful accounts (1,433 ) (1,203 ) Total accounts receivable and unbilled services, net $ 627,003 $ 439,053 |
Schedule of changes in the allowance for doubtful accounts | A rollforward of the allowance for doubtful accounts is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 1,203 $ 2,641 $ 1,819 Charged (credited) to income from operations 255 (652 ) 443 Write-offs, recoveries and the effects of foreign currency exchange (25 ) (786 ) 379 Ending balance $ 1,433 $ 1,203 $ 2,641 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of changes in carrying values of fixed assets | The carrying amount of fixed assets is as follows (in thousands): December 31, 2017 2016 Leasehold improvements $ 49,548 $ 25,083 Computer hardware and software 139,861 92,095 Furniture and equipment 44,325 33,751 Total fixed assets 233,734 150,929 Accumulated depreciation (90,664 ) (63,352 ) Total fixed assets, net $ 143,070 $ 87,577 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill are as follows (in thousands): Clinical Research Data Solutions Consolidated Balance at December 31, 2015 $ 1,014,798 $ — $ 1,014,798 Acquisition of Nextrials 4,307 — 4,307 Acquisition of the WuXiPRA joint venture’s Hong Kong operations 570 — 570 Currency translation (47,695 ) — (47,695 ) Balance at December 31, 2016 971,980 — 971,980 Acquisition of Symphony Health — 475,981 475,981 Acquisition of Parallel 6 32,452 — 32,452 Acquisition of TDC joint venture 2,670 — 2,670 Acquisition of TDS 966 — 966 Currency translation 28,375 — 28,375 Balance at December 31, 2017 $ 1,036,443 $ 475,981 $ 1,512,424 |
Schedule of intangible assets | Intangible assets consist of the following (in thousands): December 31, 2017 December 31, 2016 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationships $ 565,638 $ (72,133 ) $ 493,505 $ 360,328 $ (44,886 ) $ 315,442 Customer backlog 123,746 (120,583 ) 3,163 119,223 (108,847 ) 10,376 Trade names (finite-lived) 28,558 (9,265 ) 19,293 25,740 (6,544 ) 19,196 Patient list and other intangibles 44,474 (24,226 ) 20,248 28,974 (18,442 ) 10,532 Database 137,100 (7,544 ) 129,556 — — — Non-competition agreements 2,767 (2,706 ) 61 2,737 (2,317 ) 420 Total finite-lived intangible assets 902,283 (236,457 ) 665,826 537,002 (181,036 ) 355,966 Trade names (indefinite-lived) 118,010 — 118,010 118,010 — 118,010 Total intangible assets $ 1,020,293 $ (236,457 ) $ 783,836 $ 655,012 $ (181,036 ) $ 473,976 |
Schedule of estimated future amortization expense | Estimated amortization expense related to finite‑lived intangible assets for the next five years and thereafter is as follows (in thousands): 2018 $ 71,773 2019 69,130 2020 69,502 2021 64,380 2022 49,980 2023 and thereafter 341,061 Total $ 665,826 |
Accrued Expenses and Other Cu38
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2017 2016 Compensation, including bonuses, fringe benefits and payroll taxes $ 125,658 $ 86,160 Acquisition-related contingent considerations 114,692 1,735 Accrued data costs 15,669 — Other 44,591 32,078 Interest 3,265 3,616 Total accrued expenses and other current liabilities $ 303,875 $ 123,589 |
Revolving Credit Facilities a39
Revolving Credit Facilities and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long‑term debt consists of the following (in thousands): December 31, 2017 2016 Term loans, first lien $ 1,140,927 $ 625,000 Senior notes — 91,441 Accounts receivable financing agreement 120,000 120,000 Total debt 1,260,927 836,441 Less current portion of long-term debt (28,789 ) (31,250 ) Total long-term debt 1,232,138 805,191 Less debt issuance costs and discount (6,741 ) (8,139 ) Total long-term debt, net $ 1,225,397 $ 797,052 |
Schedule of principal payments on long-term debt due | Principal payments on long‑term debt are due as follows (in thousands): Current maturities of long-term debt: 2018 $ 28,789 2019 148,789 2020 28,789 2021 1,054,560 Total $ 1,260,927 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | Aggregated information regarding the Company’s option plans is summarized below: Options Wtd. Average Exercise Price Wtd. Average Remaining Contractual Life Intrinsic Value (in millions) Outstanding at December 31, 2016 5,507,347 $ 15.38 6.7 $ 218.9 Granted 1,921,000 75.21 Exercised (1) (2,094,886 ) 10.19 Expired/forfeited (87,836 ) 28.47 Outstanding at December 31, 2017 5,245,625 $ 39.14 7.6 $ 272.4 Exercisable at December 31, 2017 2,247,920 $ 14.12 6.0 $ 173.0 (1) During the year ended December 31, 2017, of the 2,094,886 shares exercised, 190,683 were withheld from the option holders to cover the exercise price of the options being exercised. |
Schedule of Stock Options by Exercise Price Range | Selected information regarding the Company’s stock options as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Exercise Price Number of Options Wtd Average Remaining Life (in Years) Wtd. Average Exercise Price Number of Options Wtd. Average Remaining Life (in Years) Wtd. Average Exercise Price $ 2.94 27,304 5.0 $ 2.94 27,304 5.0 $ 2.94 $ 11.73 - 16.42 2,441,121 5.9 $ 11.89 1,971,291 5.9 $ 11.82 $ 25.35 - 74.13 1,058,700 8.1 $ 42.93 249,325 7.4 $ 33.51 $ 75.01 - 83.37 1,718,500 9.7 $ 76.08 — — $ — |
Schedule of RSA/RSU Activity | Activity related to the Company’s RSAs/RSUs in 2017 is as follows: Awards Wtd. Average Grant-Date Fair Value Intrinsic Value (millions) Unvested at December 31, 2016 188,590 $ 32.63 $ 10.4 Granted 140,044 64.18 Expired/Forfeited (12,000 ) 32.81 Vested (7,096 ) 38.80 Unvested at December 31, 2017 309,538 $ 46.76 $ 28.2 |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense related to employee stock options and RSAs/RSUs is summarized below (in thousands): Years Ended December 31, 2017 2016 2015 Direct costs $ 3,552 $ 1,813 $ 1,218 Selling, general and administrative 9,064 5,254 4,058 Transaction-related costs 5,294 42,166 — Total stock-based compensation expense $ 17,910 $ 49,233 $ 5,276 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before income taxes and equity in losses of unconsolidated joint ventures | The components of income before income taxes and equity in income (losses) of unconsolidated joint ventures are as follows (in thousands): Years Ended December 31, 2017 2016 2015 Domestic $ (52,083 ) $ (61,226 ) $ (23,400 ) Foreign 126,630 155,120 138,565 $ 74,547 $ 93,894 $ 115,165 |
Schedule of components of the provision for (benefit from) income taxes | The components of the (benefit from) provision for income taxes were as follows (in thousands): Years Ended December 31, 2017 2016 2015 Current: Federal $ 30,084 $ 151 $ 1,132 State 2,607 1,842 1,507 Foreign 30,601 36,970 30,584 Total current income tax expense 63,292 38,963 33,223 Deferred: Federal (70,041 ) (2,230 ) (1,349 ) State (1,203 ) (451 ) 1,564 Foreign (4,671 ) (7,788 ) (3,434 ) Total deferred income tax benefit (75,915 ) (10,469 ) (3,219 ) Total income tax expense (benefit) $ (12,623 ) $ 28,494 $ 30,004 |
Schedule of reconciliation of effective income tax rate | Income taxes computed at the statutory U.S. federal income tax rate of 35.0% are reconciled to the benefit from income taxes as follows: Years Ended December 31, 2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % Federal tax rate change (56.0 )% — % — % State income taxes, net of federal benefit (5.5 )% 0.3 % 2.0 % Tax on foreign earnings: Foreign rate differential (20.3 )% (17.7 )% (13.6 )% Foreign earnings taxed in the U.S. 60.7 % 17.5 % 7.3 % Foreign dividends 5.2 % — % — % Non-U.S. research and development credits (3.3 )% (3.9 )% (4.4 )% Stock-based compensation (39.9 )% 1.9 % 0.2 % Nondeductible contingent consideration 35.4 % — % — % Valuation allowance (28.0 )% — % — % Change in liability for uncertain tax positions (3.2 )% — % (0.6 )% Nondeductible expenses 2.2 % 0.1 % 0.3 % Other 0.8 % (2.9 )% (0.1 )% Effective income tax rate (16.9 )% 30.3 % 26.1 % |
Schedule of components of deferred tax assets and liabilities | Components of the deferred tax assets and liabilities were as follows (in thousands): December 31, 2017 2016 Net operating loss carryforwards $ 48,603 $ 29,470 Accruals and reserves 15,943 12,986 Equity based compensation 7,447 17,392 Prepaid expenses and other 13,492 25,232 Deferred and unbilled revenue 24,937 25,718 Tax credits 15,111 5,295 125,533 116,093 Valuation allowance (25,226 ) (21,689 ) Total deferred tax assets (net of valuation allowance) 100,307 94,404 Identified intangibles (190,115 ) (148,576 ) Depreciable, amortizable and other property (13,434 ) (12,963 ) Deferred tax liabilities (203,549 ) (161,539 ) Net deferred tax liability $ (103,242 ) $ (67,135 ) Long-term deferred tax asset $ 8,939 $ 6,568 Long-term deferred tax liability $ (112,181 ) $ (73,703 ) |
Schedule of reconciliation of gross unrecognized tax benefits | A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 12,432 $ 11,729 $ 16,207 Additions based on tax positions related to current year 1,641 1,196 1,333 Additions for income tax positions of prior years 400 542 95 Impact of changes in exchange rates 427 (127 ) (594 ) Impact of change in federal tax rate (3,536 ) — — Settlements with tax authorities (108 ) (559 ) — Reductions for income tax positions for prior years (3,174 ) (349 ) (4,308 ) Reductions due to lapse of applicable statute of limitations (171 ) — (1,004 ) Ending balance $ 7,911 $ 12,432 $ 11,729 |
Schedule of changes in valuation allowance | A rollforward of the deferred tax asset valuation allowance accounts is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 21,689 $ 23,205 $ 16,142 Additions - excess benefit offset to NOL change 12,623 — — Additions - purchase accounting 219 — — Additions - other comprehensive income — — 3,892 Additions - charged to expense 12,863 3,421 3,770 Additions - U.S. federal tax rate change 1,330 — — Deductions - charged to expense (including translation adjustments) (23,498 ) (4,937 ) (599 ) Ending balance $ 25,226 $ 21,689 $ 23,205 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments | Future minimum lease commitments on non‑cancelable operating leases are as follows (in thousands): Years Ended December 31, Leases Sublease Rental Income Net Total 2018 $ 44,071 $ (181 ) $ 43,890 2019 38,871 (125 ) 38,746 2020 35,494 (125 ) 35,369 2021 31,783 (124 ) 31,659 2022 25,970 (41 ) 25,929 2022 and thereafter 110,394 — 110,394 Total $ 286,583 $ (596 ) $ 285,987 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 the Company’s derivatives as of December 31, 2017 and 2016 (in thousands): Balance Sheet Classification December 31, 2017 December 31, 2016 Notional amount Asset/(Liability) Notional amount Asset/(Liability) Derivatives in an asset position: Other current assets $ 250,000 $ 428 $ — $ — Derivatives in a liability position: Other long-term liabilities — — 250,000 (590 ) |
Schedule of the effect of derivatives on the condensed consolidated statements of operations and comprehensive (loss) income | The table below presents the effect of the Company's derivatives on the consolidated statements of operations and comprehensive (loss) income (in thousands): Years Ended December 31, Derivatives in Cash Flow Hedging Relationships (Interest Rate Contracts) 2017 2016 2015 Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives $ 245 $ (1,600 ) $ (11,851 ) Amount of loss recognized in other (expense) income, net on derivatives (ineffective portion) — 1 (444 ) Amount of loss recognized in other (expense) income, net on derivatives (no longer qualify for hedge accounting) — — (1,137 ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives (6,855 ) (5,921 ) (908 ) |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of components of accumulated other comprehensive (loss) income | Below is a summary of the components of accumulated other comprehensive (loss) income (in thousands): Foreign Currency Translation Derivative Instruments Total Balance at December 31, 2014 $ (53,639 ) $ (15,870 ) $ (69,509 ) Other comprehensive loss before reclassifications, net of tax (52,433 ) (11,273 ) (63,706 ) Reclassification adjustments, net of tax — 908 908 Balance at December 31, 2015 (106,072 ) (26,235 ) (132,307 ) Other comprehensive loss before reclassifications, net of tax (95,019 ) (978 ) (95,997 ) Reclassification adjustments, net of tax — 3,618 3,618 Balance at December 31, 2016 (201,091 ) (23,595 ) (224,686 ) Other comprehensive income before reclassifications, net of tax 83,911 149 84,060 Reclassification adjustments, net of tax — 4,156 4,156 Balance at December 31, 2017 $ (117,180 ) $ (19,290 ) $ (136,470 ) |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average basic and diluted common shares | The following table reconciles the basic to diluted weighted average shares outstanding (in thousands): Years Ended December 31, 2017 2016 2015 Basic weighted average common shares outstanding 62,437 60,759 59,965 Effect of dilutive stock options and RSAs/RSUs 3,336 3,693 3,242 Diluted weighted average common shares outstanding 65,773 64,452 63,207 Anti-dilutive shares 741 305 115 |
Supplemental Cash Flow Inform46
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table presents the Company’s supplemental cash flow information (in thousands): Years Ended December 31, 2017 2016 2015 Cash paid during the period for: Income taxes, net of refunds $ 47,829 $ 27,644 $ 17,148 Interest 48,330 48,156 54,632 Non-cash investing and financing activities: Issuance of common stock for the acquisition of Value Health Solutions, Inc. 369 — 1,582 Accrued fixed assets purchases 3,962 2,644 2,733 Cashless exercises of stock options 13,252 9,456 1,672 |
Operations by Geographic Area (
Operations by Geographic Area (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Operations and Long-Lived Assets by Geographical Region | The Company’s operations within each geographical region are further broken down to show each country which accounts for 10% or more of the totals (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Americas: United States $ 1,310,772 $ 1,063,625 $ 898,637 Other 42,227 33,320 32,802 Americas 1,352,999 1,096,945 931,439 Europe, Africa, and Asia-Pacific United Kingdom 479,623 394,363 364,476 Netherlands 79,555 68,118 57,739 Other 36,197 20,597 22,193 Europe, Africa, and Asia-Pacific 595,375 483,078 444,408 Total service revenue 1,948,374 1,580,023 1,375,847 Reimbursement revenues 311,015 231,688 238,036 Total revenue $ 2,259,389 $ 1,811,711 $ 1,613,883 December 31, 2017 2016 Long-lived assets: Americas: United States $ 107,952 $ 60,462 Other 1,714 802 Americas 109,666 61,264 Europe, Africa, and Asia-Pacific United Kingdom 4,182 3,569 Netherlands 15,876 13,313 Other 13,346 9,431 Europe, Africa, and Asia-Pacific 33,404 26,313 Total long-lived assets $ 143,070 $ 87,577 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The Company’s reportable segment information is presented below (in thousands): Years Ended December 31, 2017 2016 2015 Service revenue: Clinical Research $ 1,857,876 $ 1,580,023 $ 1,375,847 Data Solutions 90,498 — — Total service revenue 1,948,374 1,580,023 1,375,847 Direct costs: Clinical Research 1,231,690 1,032,688 886,528 Data Solutions 52,178 — — Total direct costs 1,283,868 1,032,688 886,528 Gross profit: Clinical Research 626,186 547,335 489,319 Data Solutions 38,320 — — Total gross profit $ 664,506 $ 547,335 $ 489,319 Less expenses not allocated to segments: Selling, general and administrative 321,987 269,893 246,417 Transaction-related costs 87,709 44,834 — Depreciation and amortization 78,227 69,506 77,952 Loss on disposal of fixed assets, net 358 753 652 Consolidated income from operations 176,225 162,349 164,298 Interest expense, net (46,729 ) (54,913 ) (61,747 ) Loss on modification or extinguishment of debt (15,023 ) (38,178 ) — Foreign currency (losses) gains, net (39,622 ) 24,029 14,048 Other (expense) income, net (304 ) 607 (1,434 ) Consolidated income before income taxes and equity in income (losses) of unconsolidated joint ventures $ 74,547 $ 93,894 $ 115,165 |
Quarterly Financial Data (una49
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Results of Operations | The following table summarizes the Company’s unaudited quarterly results of operations (in thousands, except per share data: 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Service revenue $ 427,080 $ 457,942 $ 494,550 $ 568,802 Reimbursement revenue 60,680 75,782 87,459 87,094 Total revenue 487,760 533,724 582,009 655,896 Income from operations (1) 49,986 64,850 57,776 3,613 Provision for (benefit from) income taxes (2) 7,883 10,193 (18,241 ) (12,458 ) Income (loss) before equity in gains of unconsolidated joint ventures (3) 25,182 29,632 48,582 (16,226 ) Equity in gains of unconsolidated joint ventures 42 26 24 31 Net income (loss) 25,224 29,658 48,606 (16,195 ) Net (income) loss attributable to non-controlling interests — (112 ) (401 ) 147 Net income (loss) attributable to PRA Health Sciences, Inc. 25,224 29,546 48,205 (16,048 ) Comprehensive income (loss) 42,552 63,892 75,348 (6,380 ) Comprehensive income (loss) attributable to noncontrolling interest — (50 ) (373 ) 154 Comprehensive income (loss) attributable to PRA Health Sciences, Inc. $ 42,552 $ 63,842 $ 74,975 $ (6,226 ) Basic earnings (loss) per share (4) $ 0.41 $ 0.47 $ 0.77 $ (0.25 ) Diluted earnings (loss) per share (4) $ 0.39 $ 0.45 $ 0.73 $ (0.25 ) 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Service revenue $ 372,320 $ 394,249 $ 399,841 $ 413,613 Reimbursement revenue 57,903 61,598 53,414 58,773 Total revenue 430,223 455,847 453,255 472,386 Income from operations (5) 18,946 50,348 54,814 38,241 (Benefit from) provision for income taxes (5,264 ) 12,312 10,821 10,625 (Losses) income before equity in (losses) gains of unconsolidated joint ventures (6) (15,431 ) 35,423 31,416 13,992 Equity in (losses) gains of unconsolidated joint ventures (538 ) 3,247 33 33 Net (loss) income (15,969 ) 38,670 31,449 14,025 Comprehensive (loss) income $ (22,251 ) $ 567 $ 21,982 $ (24,502 ) Basic (losses) earnings per share (4) $ (0.27 ) $ 0.64 $ 0.52 $ 0.23 Diluted (losses) earnings per share (4) $ (0.27 ) $ 0.60 $ 0.49 $ 0.22 (1) During the three months ended December 31, 2017, the Company recorded $75.0 million of transaction-related costs associated with the change in fair value of contingent consideration. During the three months ended September 30, 2017, transaction-related costs consisted of $6.4 million of fees incurred in connection with the acquisition of Symphony Health, $5.3 million of stock-based compensation expense related to the release of the transfer restrictions on vested options, and $1.0 million of third-party fees incurred in connection with the August 2017 secondary offering; these amounts were offset by a $1.0 million adjustment to the change in fair value of contingent consideration. As discussed in Note 2 - Significant Accounting Policies, the Company made an accounting policy election to present changes in the fair value of contingent consideration as part of income from operations during the fourth quarter of 2017. As a result, the Company reclassified $0.1 million of costs in both the three months ended March 31, 2017 and June 30, 2017, as well as a $1.0 million benefit during the three month ended September 30, 2017, into income from operations. (2) During the three months ended September 30, 2017 and December 31, 2017, the Company recorded a benefit from income taxes of $18.2 million and $12.5 million , respectively. The benefit was due primarily to (i) the benefit realized from the tax deduction of stock awards in excess of the amount recognized in the financial statements per guidance under ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, (ii) the release of the valuation allowance against the federal net deferred tax assets, and additionally during the three months ended December 31, 2017 (iii) the U.S. federal rate decrease effect on an overall net deferred tax liability due to the recent law changes in the Tax Cuts and Jobs Act. (3) During the three months ended September 30, 2017 and December 31, 2017, the Company recorded a loss on extinguishment of debt of $3.1 million and $11.9 million , respectively. The loss on extinguishment of debt recorded during the three months ended September 30, 2017 related to the Incremental Borrowings on the Company’s term debt. The loss on extinguishment of debt recorded during the three months ended December 31, 2017 related to the refinancing of the Company’s 2016 Credit Facilities and the redemption of the Company's Senior Notes. Refer to Note 9, Current Borrowings and Long-Term Debt, for additional information regarding the items noted above. (4) The sum of the quarterly per share amounts may not equal per share amounts reported for year‑to‑date periods. This is due to changes in the number of weighted average shares outstanding and the effects of rounding for each period. (5) Transaction-related costs for the three months ended March 31, 2016, June 30, 2016 and December 31, 2016 were $28.9 million , $2.9 million and $13.0 million , respectively. There were no transaction-related costs for the three months ended September 30, 2016. Transaction-related costs primarily relate to costs incurred in connection with the March, May and November 2016 secondary offerings and receivables financing agreement. These costs include $42.2 million of non-cash stock-based compensation expense and $2.7 million of third-party fees. (6) During the three months ended March 31, 2016 and December 31, 2016, the Company recorded a loss on extinguishment of debt of $21.5 million and $16.7 million , respectively. The loss on extinguishment of debt recorded during the three months ended March 31, 2016 related to the cash tender offer on the Company’s Senior Notes. The loss on extinguishment of debt recorded during the three months ended December 31, 2016 related to the refinancing of the Company’s 2013 Credit Facilities. Refer to Note 9, Current Borrowings and Long-Term Debt, for additional information regarding the cash tender on the Senior Notes and the 2013 Credit Facilities refinancing. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Professional fees | $ 2.7 | ||
KKR | |||
Business Acquisition [Line Items] | |||
Percentage of common stock owned by KKR | 20.70% | ||
Secondary Offerings | Transaction-related costs | |||
Business Acquisition [Line Items] | |||
Professional fees | $ 1 | $ 1 | $ 1.3 |
Secondary Offerings | KKR and certain executive officers of the Company | |||
Business Acquisition [Line Items] | |||
Shares sold by selling stockholders | 10 | 17.5 |
Significant Accounting Polici51
Significant Accounting Policies - Variable Interest Entities (Details) - Accounts receivable financing agreement - USD ($) $ in Millions | Mar. 22, 2016 | Mar. 31, 2016 |
Variable Interest Entities | ||
Term of accounts receivable financing agreement and related arrangements to securitize accounts receivable | 3 years | |
Maximum borrowing capacity | $ 140 | $ 140 |
Significant Accounting Polici52
Significant Accounting Policies - Risks, Reportable Segments, and Restricted Cash (Details) $ in Thousands | 4 Months Ended | 8 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($)reportable_segments | Sep. 05, 2017reportable_segments | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Reportable segments | reportable_segments | 2 | 1 | ||||
Cash and cash equivalents | $ 192,229 | $ 192,229 | $ 144,623 | $ 121,065 | ||
Restricted cash | 661 | 661 | 4,715 | 5,060 | ||
Total cash, cash equivalents, and restricted cash | $ 192,890 | 192,890 | $ 149,338 | $ 126,125 | $ 91,529 | |
Acquisition of Nextrials | ||||||
Escrow deposit | $ 500 | |||||
Minimum | ||||||
Notice required for a customer to terminate a contract without cause | 30 days | |||||
Maximum | ||||||
Notice required for a customer to terminate a contract without cause | 60 days |
Significant Accounting Polici53
Significant Accounting Policies - Fixed Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Furniture and equipment | Minimum | |
Fixed Assets | |
Estimated useful lives | 5 years |
Furniture and equipment | Maximum | |
Fixed Assets | |
Estimated useful lives | 7 years |
Computer hardware and software | Minimum | |
Fixed Assets | |
Estimated useful lives | 3 years |
Computer hardware and software | Maximum | |
Fixed Assets | |
Estimated useful lives | 7 years |
Significant Accounting Polici54
Significant Accounting Policies - Contingent Consideration (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||
Fair value of contingent consideration | $ 1 | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.5 |
Significant Accounting Polici55
Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future Value Of Liabilities Incurred From Business Acquisition's Valuation Technique On Contingent Consideration | ||||||
Volatility | 29.70% | 31.20% | 34.40% | |||
Recurring | ||||||
Assets: | ||||||
Assets fair value | $ 821 | |||||
Liabilities: | ||||||
Liabilities fair value | 50,644 | $ 3,344 | ||||
Level 1 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 393 | |||||
Liabilities: | ||||||
Liabilities fair value | 0 | 0 | ||||
Level 2 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 428 | |||||
Liabilities: | ||||||
Liabilities fair value | 0 | 590 | ||||
Level 3 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 0 | |||||
Liabilities: | ||||||
Liabilities fair value | 50,644 | 2,754 | ||||
Level 3 | Nonrecurring | ||||||
Assets: | ||||||
Assets fair value | 2,296,300 | |||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Goodwill | 1,512,400 | |||||
Identifiable intangible assets | 783,800 | |||||
Interest rate swap | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 590 | |||||
Interest rate swap | Level 1 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 0 | |||||
Interest rate swap | Level 2 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 590 | |||||
Interest rate swap | Level 3 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 0 | |||||
Contingent consideration | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 50,644 | 2,754 | ||||
Contingent consideration | Level 1 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 0 | 0 | ||||
Contingent consideration | Level 2 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 0 | 0 | ||||
Contingent consideration | Level 3 | Recurring | ||||||
Liabilities: | ||||||
Liabilities fair value | 50,644 | 2,754 | ||||
Accrued expenses and other current liabilities | Level 3 | Recurring | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Beginning balance | $ 0 | $ 1,735 | $ 999 | |||
Revaluations included in earnings | 66,363 | 0 | ||||
Measurement period adjustments | 24,388 | |||||
Transfer out | (114,692) | |||||
Ending balance | 0 | 1,735 | $ 999 | |||
Earn-out liability in other long-term liabilities | 0 | 1,735 | 999 | 999 | 0 | 1,735 |
Accrued expenses and other current liabilities | Level 3 | Recurring | Acquisition of Nextrials | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Initial estimate of contingent consideration | 0 | |||||
Reclassification adjustment | 736 | |||||
Payments on contingent consideration | (400) | |||||
Accrued expenses and other current liabilities | Level 3 | Recurring | Symphony Health | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Initial estimate of contingent consideration | 90,394 | |||||
Payments on contingent consideration | (67,788) | |||||
Transfer out | (114,700) | |||||
Accrued expenses and other current liabilities | Level 3 | Recurring | Parallel 6 | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Initial estimate of contingent consideration | 0 | |||||
Other long-term liabilities | Level 3 | Recurring | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Beginning balance | 50,644 | 1,019 | 0 | |||
Revaluations included in earnings | 8,606 | (527) | ||||
Measurement period adjustments | 14,279 | |||||
Transfer out | 0 | |||||
Ending balance | 50,644 | 1,019 | 0 | |||
Earn-out liability in other long-term liabilities | 50,644 | 1,019 | 0 | $ 0 | 50,644 | $ 1,019 |
Other long-term liabilities | Level 3 | Recurring | Acquisition of Nextrials | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Initial estimate of contingent consideration | 2,282 | |||||
Reclassification adjustment | $ (736) | |||||
Payments on contingent consideration | 0 | |||||
Other long-term liabilities | Level 3 | Recurring | Symphony Health | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Beginning balance | 50,600 | |||||
Initial estimate of contingent consideration | 18,390 | |||||
Payments on contingent consideration | 0 | |||||
Ending balance | 50,600 | |||||
Earn-out liability in other long-term liabilities | $ 50,600 | 50,600 | 50,600 | |||
Other long-term liabilities | Level 3 | Recurring | Parallel 6 | ||||||
Changes in the fair value of the Company's Level 3 financial liabilities | ||||||
Initial estimate of contingent consideration | $ 8,350 | |||||
Interest rate swap | Recurring | ||||||
Assets: | ||||||
Assets fair value | 428 | |||||
Interest rate swap | Level 1 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 0 | |||||
Interest rate swap | Level 2 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 428 | |||||
Interest rate swap | Level 3 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 0 | |||||
Marketable securities | Recurring | ||||||
Assets: | ||||||
Assets fair value | 393 | |||||
Marketable securities | Level 1 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 393 | |||||
Marketable securities | Level 2 | Recurring | ||||||
Assets: | ||||||
Assets fair value | 0 | |||||
Marketable securities | Level 3 | Recurring | ||||||
Assets: | ||||||
Assets fair value | $ 0 | |||||
Forecast | Other long-term liabilities | Level 3 | Recurring | ||||||
Future Value Of Liabilities Incurred From Business Acquisition's Valuation Technique On Contingent Consideration | ||||||
Discount rate | 8.00% | |||||
Volatility | 32.00% | |||||
Probability adjusted level of adjusted EBITDA | $ 56,500 |
Significant Accounting Polici56
Significant Accounting Policies - Goodwill, Revenue, and Reimbursable Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Service in kind revenue | $ 5.8 | ||
Payments for investigation fees | $ 250.9 | $ 249.6 | $ 208 |
Significant Accounting Polici57
Significant Accounting Policies - Concentration of Risk (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Service revenue | Customer A | |||
Concentration risk | |||
Concentration risk percentage | 10.30% | 11.00% | 0.00% |
Service revenue | Customer B | |||
Concentration risk | |||
Concentration risk percentage | 0.00% | 10.40% | 10.70% |
Accounts receivable and unbilled receivables | Customer A | |||
Concentration risk | |||
Concentration risk percentage | 11.50% | 12.00% |
Significant Accounting Polici58
Significant Accounting Policies - Stock-Based Compensation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted average fair value assumptions | |||
Risk-free interest rate | 1.90% | 1.50% | 1.70% |
Expected life, in years | 6 years 3 months 12 days | 6 years 3 months 12 days | 6 years 3 months 12 days |
Volatility | 29.70% | 31.20% | 34.40% |
Significant Accounting Polici59
Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction of deferred tax liability | $ (112,181,000) | $ (73,703,000) | ||
Valuation allowance | 25,226,000 | 21,689,000 | $ 23,205,000 | $ 16,142,000 |
Deferred tax assets | 8,939,000 | 6,568,000 | ||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Reduction of deferred tax liability | 12,600,000 | |||
Valuation allowance | (12,600,000) | |||
Accounting Standards Update 2016-09, Excess Tax Benefits Component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred tax assets | $ 33,700,000 | |||
Retained Earnings (Accumulated Deficit) | Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle in period adoption | $ 0 |
Joint Ventures - Narrative (Det
Joint Ventures - Narrative (Details) - USD ($) $ in Thousands | May 06, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | Apr. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Joint Ventures | |||||||
Contributions to unconsolidated joint ventures | $ 0 | $ 0 | $ 23,000 | ||||
WuXiPRA Joint Venture | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 49.00% | ||||||
Gain on sale of interest in joint venture | $ 3,300 | ||||||
Contributions to unconsolidated joint ventures | $ 3,000 | ||||||
Increase (reduction) in investment from net income (loss) of venture | (700) | (2,900) | |||||
WuXiPRA Joint Venture | CHINA | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 49.00% | ||||||
Proceeds from the sale or dissolution of joint venture | $ 4,000 | ||||||
A2PRA Joint Venture | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 49.00% | ||||||
Increase (reduction) in investment from net income (loss) of venture | $ 100 | 100 | $ 0 | ||||
Equity investment amount | $ 400 | $ 300 | |||||
KKR Affiliate Joint Venture | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 11.00% | ||||||
Proceeds from the sale or dissolution of joint venture | $ 19,500 | ||||||
Contributions to unconsolidated joint ventures | $ 20,000 | ||||||
Increase (reduction) in investment from net income (loss) of venture | $ (500) | ||||||
WuXi | WuXiPRA Joint Venture | |||||||
Joint Ventures | |||||||
Contributions to unconsolidated joint ventures | $ 3,000 | ||||||
A2 Healthcare Corporation (Asklep) | A2PRA Joint Venture | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 51.00% | ||||||
KKR | KKR Affiliate Joint Venture | |||||||
Joint Ventures | |||||||
Equity interest percentage of ownership | 89.00% | ||||||
Acquisition of the WuXiPRA joint venture’s Hong Kong operations | |||||||
Joint Ventures | |||||||
Cash paid | $ 300 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Sep. 06, 2017 | Jun. 01, 2017 | May 10, 2017 | May 06, 2016 | Mar. 18, 2016 | Jun. 08, 2015 | Jun. 30, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 28, 2018 |
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 114,692 | $ 1,735 | $ 114,692 | $ 114,692 | $ 1,735 | $ 114,692 | $ 1,735 | |||||||||||||||
Fair value of contingent consideration | $ 1,000 | $ 100 | $ 100 | 100 | 500 | |||||||||||||||||
Increase (decrease) in fair value of contingent consideration | 74,969 | (527) | $ 89 | |||||||||||||||||||
Income tax expense (benefit) | 12,458 | 18,241 | $ (10,193) | $ (7,883) | (10,625) | $ (10,821) | $ (12,312) | $ 5,264 | 12,623 | (28,494) | (30,004) | |||||||||||
Loss on modification or extinguishment of debt | $ 11,900 | 3,100 | 16,700 | $ 21,500 | 15,023 | 38,178 | 0 | |||||||||||||||
Payment of Symphony Health Solutions Corporation contingent consideration | 67,781 | 0 | 0 | |||||||||||||||||||
Amount of equity contribution | $ 369 | 0 | 1,582 | |||||||||||||||||||
Takeda | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Noncontrolling interest owned by Takeda (as a percentage) | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||||||||||||
Other long-term liabilities | Recurring | Level 3 | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Earn-out liability in accrued expenses and other current liabilities | $ 0 | |||||||||||||||||||||
Earn-out liability in other long-term liabilities | $ 50,644 | 1,019 | $ 50,644 | $ 50,644 | 1,019 | 50,644 | 1,019 | 0 | ||||||||||||||
Accrued expenses and other current liabilities | Recurring | Level 3 | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Earn-out liability in accrued expenses and other current liabilities | 114,692 | |||||||||||||||||||||
Earn-out liability in other long-term liabilities | 0 | $ 1,735 | 0 | 0 | 1,735 | 0 | $ 1,735 | $ 999 | ||||||||||||||
Symphony Health | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 539,400 | |||||||||||||||||||||
Fair value of contingent consideration | 147,500 | |||||||||||||||||||||
Acquisition-related costs | 85,700 | 85,700 | 85,700 | 85,700 | ||||||||||||||||||
Total goodwill | 475,981 | |||||||||||||||||||||
Service revenue | 90,500 | |||||||||||||||||||||
Net income | 6,300 | |||||||||||||||||||||
Increase (decrease) in goodwill | 24,500 | |||||||||||||||||||||
Period adjustment, finite-lived intangible assets | 90,600 | |||||||||||||||||||||
Increase (decrease) in fair value of contingent consideration | 38,700 | |||||||||||||||||||||
Period adjustment, income tax | 29,800 | |||||||||||||||||||||
Symphony Health | Acquisition-related costs | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Acquisition-related costs | 6,400 | $ 6,400 | 6,400 | 6,400 | 6,400 | |||||||||||||||||
Loss on modification or extinguishment of debt | 3,100 | |||||||||||||||||||||
Symphony Health | Acquisition-related transaction costs | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Income tax expense (benefit) | 2,500 | |||||||||||||||||||||
Symphony Health | Acquisition-related modification or extinguishment of long-term debt | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Income tax expense (benefit) | 1,200 | |||||||||||||||||||||
Symphony Health | Level 3 | Other long-term liabilities | Subsequent Event | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 114,700 | |||||||||||||||||||||
Symphony Health | Level 3 | Other long-term liabilities | Minimum | Forecast | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | 0 | |||||||||||||||||||||
Symphony Health | Level 3 | Other long-term liabilities | Maximum | Forecast | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 110,800 | |||||||||||||||||||||
Symphony Health | Recurring | Level 3 | Other current liabilities | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 108,800 | 67,800 | 67,800 | 67,800 | 67,800 | |||||||||||||||||
Symphony Health | Recurring | Level 3 | Accrued expenses and other current liabilities | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | 165,300 | 165,300 | 165,300 | 165,300 | ||||||||||||||||||
Symphony Health | Other long-term liabilities | Recurring | Level 3 | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Earn-out liability in other long-term liabilities | 50,600 | 50,600 | 50,600 | 50,600 | ||||||||||||||||||
Symphony Health | Accrued expenses and other current liabilities | Recurring | Level 3 | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Earn-out liability in accrued expenses and other current liabilities | 114,700 | |||||||||||||||||||||
TDS | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 700 | |||||||||||||||||||||
Total goodwill | 1,000 | |||||||||||||||||||||
TDC Joint Venture | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | 5,400 | |||||||||||||||||||||
Total goodwill | $ 2,670 | |||||||||||||||||||||
Equity interest in VIE (as a percentage) | 50.00% | |||||||||||||||||||||
Period after which buy-out of the noncontrolling interest of the Variable Interest Entity (VIE) is required | 2 years | |||||||||||||||||||||
TDC Joint Venture | Selling, general and administrative | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Acquisition-related costs | 600 | 600 | 600 | $ 600 | ||||||||||||||||||
TDC Joint Venture | Takeda | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Noncontrolling interest ownership (as a percentage) | 50.00% | |||||||||||||||||||||
Required buy-out of Takeda's ownership (as a percentage) | 50.00% | |||||||||||||||||||||
Early ownership buy-out option (as a percentage) | 50.00% | |||||||||||||||||||||
Parallel 6 | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 39,000 | |||||||||||||||||||||
Goodwill | (1,200) | |||||||||||||||||||||
Parallel 6 | Clinical Research | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Total goodwill | 32,452 | |||||||||||||||||||||
Parallel 6 | Contingent Earn-out Payments - Sales Targets | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | $ 10,000 | 8,400 | 8,400 | 8,400 | $ 8,400 | |||||||||||||||||
Earn-out period for contingent consideration | 18 months | |||||||||||||||||||||
Parallel 6 | Selling, general and administrative | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Acquisition-related costs | 1,300 | 1,300 | 1,300 | 1,300 | ||||||||||||||||||
Parallel 6 | Level 3 | Other long-term liabilities | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | 8,400 | 8,400 | 8,400 | 8,400 | ||||||||||||||||||
VHS | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 500 | |||||||||||||||||||||
Amount of equity contribution | $ 1,600 | $ 400 | ||||||||||||||||||||
Number of unregistered shares of common stock issued | 47,598 | 4,998 | ||||||||||||||||||||
VHS | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Increase (decrease) in fair value of contingent consideration | 1,000 | |||||||||||||||||||||
Potential contingent earn-out payments | $ 16,000 | |||||||||||||||||||||
Earn-out period for contingent consideration | 48 months | |||||||||||||||||||||
VHS | Contingent Earn-out Payments - Milestones | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | $ 1,000 | |||||||||||||||||||||
VHS | Contingent Earn-out Payments - Sales Targets | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | 15,000 | |||||||||||||||||||||
VHS | Level 3 | Accrued expenses and other current liabilities | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 1,000 | |||||||||||||||||||||
Acquisition of Nextrials | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 4,800 | |||||||||||||||||||||
Goodwill | $ 2,000 | |||||||||||||||||||||
Acquisition of Nextrials | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | $ 3,000 | |||||||||||||||||||||
Earn-out period for contingent consideration | 30 months | |||||||||||||||||||||
Payment of Symphony Health Solutions Corporation contingent consideration | 400 | |||||||||||||||||||||
Acquisition of Nextrials | Contingent Earn-out Payments - Milestones | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | $ 2,000 | |||||||||||||||||||||
Acquisition of Nextrials | Contingent Earn-out Payments - Sales Targets | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Potential contingent earn-out payments | 1,000 | |||||||||||||||||||||
Acquisition of Nextrials | Accrued expenses and other current liabilities | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Current contingent consideration liability | $ 1,400 | $ 1,400 | $ 1,400 | $ 1,400 | ||||||||||||||||||
Acquisition of Nextrials | Level 3 | Contingent Earn-out Payments | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Contingent consideration liability recognized | $ 2,300 | |||||||||||||||||||||
Acquisition of the WuXiPRA joint venture’s Hong Kong operations | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash paid | $ 300 | |||||||||||||||||||||
Goodwill | $ 600 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation - Symphony Health (Details) - Symphony Health $ in Thousands | Sep. 06, 2017USD ($) |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 26,297 |
Accounts receivable and unbilled services | 39,132 |
Other current assets | 23,726 |
Fixed assets | 12,340 |
Accounts payable and accrued expenses | (42,222) |
Advanced billings | (65,968) |
Deferred tax liabilities | (104,869) |
Other long-term liabilities | (6,740) |
Estimated fair value of net assets acquired | 210,896 |
Purchase price, including contingent consideration and working capital adjustment | 686,877 |
Total goodwill | 475,981 |
Customer relationships | |
Business Acquisition [Line Items] | |
Acquired intangible | $ 190,100 |
Weighted Amortization Period | 10 years |
Database | |
Business Acquisition [Line Items] | |
Acquired intangible | $ 137,100 |
Weighted Amortization Period | 3 years |
Tradename | |
Business Acquisition [Line Items] | |
Acquired intangible | $ 2,000 |
Weighted Amortization Period | 2 years |
Business Combinations - Unaudit
Business Combinations - Unaudited Pro-Forma Information (Details) - Symphony Health - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Combination | ||
Total revenue | $ 2,408,770 | $ 2,011,544 |
Net income attributable to PRA Health Sciences, Inc. | $ 104,700 | $ 45,836 |
Net income per share, basic (in dollars per share) | $ 1.68 | $ 0.75 |
Net income per share, diluted (in dollars per share) | $ 1.59 | $ 0.71 |
Business Combinations - Purch64
Business Combinations - Purchase Price Allocation - TDC Joint Venture (Details) - TDC Joint Venture $ in Thousands | Jun. 01, 2017USD ($) |
Business Combination | |
Cash and cash equivalents | $ 8,120 |
Other current assets | 1,671 |
Other non-current assets | 799 |
Accounts payable and accrued expenses | (2,380) |
Estimated fair value of net assets acquired | 8,210 |
Purchase price, including contingent consideration and working capital adjustment | 5,440 |
Fair value of Takeda's noncontrolling interest | 5,440 |
Total goodwill | $ 2,670 |
Business Combinations - Purch65
Business Combinations - Purchase Price Allocation - Parallel 6 (Details) - Parallel 6 - USD ($) $ in Thousands | May 10, 2017 | Dec. 31, 2017 |
Business Combination | ||
Cash and cash equivalents | $ 132 | |
Accounts receivable and unbilled services | 929 | |
Other current assets | 26 | |
Accounts payable and accrued expenses | (780) | |
Advanced billings | (692) | |
Other long-term liabilities | (1,148) | |
Estimated fair value of net assets acquired | 14,887 | |
Purchase price, including contingent consideration and working capital adjustment | 47,339 | |
Goodwill | $ (1,200) | |
Software intangible | ||
Business Combination | ||
Acquired intangible | $ 15,500 | |
Weighted Amortization Period | 5 years | |
Other intangibles | ||
Business Combination | ||
Acquired intangible | $ 920 | |
Weighted Amortization Period | 5 years | |
Clinical Research | ||
Business Combination | ||
Total goodwill | $ 32,452 |
Business Combinations - Purch66
Business Combinations - Purchase Price Allocation - Nextrials (Details) - USD ($) $ in Thousands | Mar. 18, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,512,424 | $ 971,980 | $ 1,014,798 | |
Acquisition of Nextrials | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 94 | |||
Accounts receivable and unbilled services | 211 | |||
Other current assets | 96 | |||
Fixed assets | 111 | |||
Accounts payable and accrued expenses | (1,585) | |||
Other long-term liabilities | (1,663) | |||
Estimated fair value of net assets acquired | 2,838 | |||
Purchase price, including contingent consideration and working capital adjustment | 7,145 | |||
Goodwill | 4,307 | |||
Software intangible | Acquisition of Nextrials | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible | $ 5,574 | |||
Weighted Amortization Period | 5 years |
Business Combinations - Purch67
Business Combinations - Purchase Price Allocation - Value Health Solutions (Details) - USD ($) $ in Thousands | Jun. 08, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,512,424 | $ 971,980 | $ 1,014,798 | |
VHS | ||||
Business Acquisition [Line Items] | ||||
Fixed assets | $ 43 | |||
Estimated fair value of net assets acquired | 2,543 | |||
Purchase price, including contingent consideration and working capital adjustment | 3,499 | |||
Goodwill | 956 | |||
Software intangible | VHS | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible | $ 2,500 | |||
Weighted Amortization Period | 5 years |
Accounts Receivable and Unbil68
Accounts Receivable and Unbilled Services - Accounts Receivable and Unbilled Services (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 457,676 | $ 284,647 |
Unbilled services | 170,760 | 155,609 |
Total accounts receivable, gross | 628,436 | 440,256 |
Less allowance for doubtful accounts | (1,433) | (1,203) |
Accounts receivable and unbilled services, net | $ 627,003 | $ 439,053 |
Accounts Receivable and Unbil69
Accounts Receivable and Unbilled Services - Changes in the allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Beginning balance | $ 1,203 | $ 2,641 | $ 1,819 |
Charged (credited) to income from operations | 255 | (652) | 443 |
Write-offs, recoveries and the effects of foreign currency exchange | (25) | (786) | 379 |
Ending balance | $ 1,433 | $ 1,203 | $ 2,641 |
Fixed Assets - Fixed Assets (De
Fixed Assets - Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fixed Assets | |||
Fixed assets, gross | $ 233,734 | $ 150,929 | |
Accumulated depreciation | (90,664) | (63,352) | |
Total fixed assets, net | 143,070 | 87,577 | |
Depreciation expense | 29,000 | 24,100 | $ 21,200 |
Leasehold improvements | |||
Fixed Assets | |||
Fixed assets, gross | 49,548 | 25,083 | |
Computer hardware and software | |||
Fixed Assets | |||
Fixed assets, gross | 139,861 | 92,095 | |
Furniture and equipment | |||
Fixed Assets | |||
Fixed assets, gross | $ 44,325 | $ 33,751 |
Goodwill and Intangible Asset71
Goodwill and Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Mar. 18, 2016 | Dec. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 1,512,424 | $ 971,980 | $ 1,014,798 | |
Currency translation | 28,375 | (47,695) | ||
Acquisition of Nextrials | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 4,307 | |||
Acquisition of goodwill | 4,307 | |||
Acquisition of the WuXiPRA joint venture’s Hong Kong operations | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 570 | |||
Acquisition of Symphony Health | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 475,981 | |||
Acquisition of Parallel 6 | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 32,452 | |||
Acquisition of TDC joint venture | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 2,670 | |||
Acquisition of TDS | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 966 | |||
Clinical Research | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | 1,036,443 | 971,980 | 1,014,798 | |
Currency translation | 28,375 | (47,695) | ||
Clinical Research | Acquisition of Nextrials | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 4,307 | |||
Clinical Research | Acquisition of the WuXiPRA joint venture’s Hong Kong operations | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 570 | |||
Clinical Research | Acquisition of Symphony Health | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 0 | |||
Clinical Research | Acquisition of Parallel 6 | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 32,452 | |||
Clinical Research | Acquisition of TDC joint venture | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 2,670 | |||
Clinical Research | Acquisition of TDS | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 966 | |||
Data Solutions | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | 475,981 | 0 | $ 0 | |
Currency translation | 0 | 0 | ||
Data Solutions | Acquisition of Nextrials | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 0 | |||
Data Solutions | Acquisition of the WuXiPRA joint venture’s Hong Kong operations | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | $ 0 | |||
Data Solutions | Acquisition of Symphony Health | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 475,981 | |||
Data Solutions | Acquisition of Parallel 6 | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 0 | |||
Data Solutions | Acquisition of TDC joint venture | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | 0 | |||
Data Solutions | Acquisition of TDS | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Acquisition of goodwill | $ 0 |
Goodwill and Intangible Asset72
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 902,283 | $ 537,002 |
Accumulated Amortization | (236,457) | (181,036) |
Total finite-lived intangible assets, net | 665,826 | 355,966 |
Trade names (indefinite-lived) | 118,010 | 118,010 |
Total intangible assets, gross | 1,020,293 | 655,012 |
Total intangible assets | 783,836 | 473,976 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 565,638 | 360,328 |
Accumulated Amortization | (72,133) | (44,886) |
Total finite-lived intangible assets, net | 493,505 | 315,442 |
Customer backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 123,746 | 119,223 |
Accumulated Amortization | (120,583) | (108,847) |
Total finite-lived intangible assets, net | 3,163 | 10,376 |
Tradename | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 28,558 | 25,740 |
Accumulated Amortization | (9,265) | (6,544) |
Total finite-lived intangible assets, net | 19,293 | 19,196 |
Patient list and other intangibles | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 44,474 | 28,974 |
Accumulated Amortization | (24,226) | (18,442) |
Total finite-lived intangible assets, net | 20,248 | 10,532 |
Database | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 137,100 | 0 |
Accumulated Amortization | (7,544) | 0 |
Total finite-lived intangible assets, net | 129,556 | 0 |
Non-competition agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 2,767 | 2,737 |
Accumulated Amortization | (2,706) | (2,317) |
Total finite-lived intangible assets, net | $ 61 | $ 420 |
Goodwill and Intangible Asset73
Goodwill and Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 71,773 | |
2,019 | 69,130 | |
2,020 | 69,502 | |
2,021 | 64,380 | |
2,022 | 49,980 | |
2023 and thereafter | 341,061 | |
Total finite-lived intangible assets, net | $ 665,826 | $ 355,966 |
Goodwill and Intangible Asset74
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Accumulated impairment charges | $ 0 | ||
Impairments | 0 | $ 0 | $ 0 |
Amortization expense | $ 49,200,000 | $ 45,400,000 | $ 56,700,000 |
Accrued Expenses and Other Cu75
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Compensation, including bonuses, fringe benefits and payroll taxes | $ 125,658 | $ 86,160 |
Acquisition-related contingent considerations | 114,692 | 1,735 |
Accrued data costs | 15,669 | 0 |
Other | 44,591 | 32,078 |
Interest | 3,265 | 3,616 |
Total accrued expenses and other current liabilities | $ 303,875 | $ 123,589 |
Revolving Credit Facilities a76
Revolving Credit Facilities and Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2013 |
Long-term debt | |||
Total | $ 1,260,927 | $ 836,441 | |
Less current portion of long-term debt | (28,789) | (31,250) | |
Total long-term debt | 1,232,138 | 805,191 | |
Less debt issuance costs and discount | (6,741) | (8,139) | |
Total long-term debt, net | 1,225,397 | 797,052 | |
Term loans, first lien | |||
Long-term debt | |||
Total | 1,140,927 | 625,000 | |
Senior notes | |||
Long-term debt | |||
Total | 0 | 91,441 | $ 375,000 |
Accounts receivable financing agreement | |||
Long-term debt | |||
Total | $ 120,000 | $ 120,000 |
Revolving Credit Facilities a77
Revolving Credit Facilities and Long-Term Debt - Future Principal Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Principal payments on long-term debt | ||
2,018 | $ 28,789 | |
2,019 | 148,789 | |
2,020 | 28,789 | |
2,021 | 1,054,560 | |
Total | $ 1,260,927 | $ 836,441 |
Revolving Credit Facilities a78
Revolving Credit Facilities and Long-Term Debt - Credit Facilities (Details) | Sep. 06, 2017USD ($) | Dec. 06, 2016USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 28, 2017USD ($) | Sep. 30, 2013USD ($) |
Long-term debt | |||||||||||
Loss on extinguishment of debt | $ 11,900,000 | $ 3,100,000 | $ 16,700,000 | $ 21,500,000 | $ 15,023,000 | $ 38,178,000 | $ 0 | ||||
Long-term debt, gross | $ 1,260,927,000 | $ 836,441,000 | 1,260,927,000 | 836,441,000 | |||||||
Repayment of debt | $ 125,513,000 | $ 822,559,000 | $ 40,000,000 | ||||||||
Term loans, first lien | |||||||||||
Long-term debt | |||||||||||
Weighted average interest rate (as a percent) | 3.45% | 2.70% | 3.45% | 2.70% | |||||||
Long-term debt, gross | $ 1,140,927,000 | $ 625,000,000 | $ 1,140,927,000 | $ 625,000,000 | |||||||
2016 Credit Facilities | LIBOR | Minimum | |||||||||||
Long-term debt | |||||||||||
Applicable margin on variable rate basis (as a percent) | 1.00% | ||||||||||
2016 Credit Facilities | LIBOR | Maximum | |||||||||||
Long-term debt | |||||||||||
Applicable margin on variable rate basis (as a percent) | 2.00% | ||||||||||
2016 Credit Facilities | ABR | Minimum | |||||||||||
Long-term debt | |||||||||||
Applicable margin on variable rate basis (as a percent) | 0.00% | ||||||||||
2016 Credit Facilities | ABR | Maximum | |||||||||||
Long-term debt | |||||||||||
Applicable margin on variable rate basis (as a percent) | 1.00% | ||||||||||
Revolving Credit Facility | |||||||||||
Long-term debt | |||||||||||
Weighted average interest rate (as a percent) | 3.56% | 3.56% | |||||||||
Senior notes | |||||||||||
Long-term debt | |||||||||||
Loss on extinguishment of debt | $ 11,300,000 | 21,500,000 | |||||||||
Long-term debt, gross | $ 0 | 91,441,000 | 0 | 91,441,000 | $ 375,000,000 | ||||||
2016 Credit Facilities | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 750,000,000 | ||||||||||
Loss on extinguishment of debt | 3,100,000 | ||||||||||
Borrowing capacity | $ 550,000,000 | ||||||||||
2016 Credit Facilities | Term loans, first lien | |||||||||||
Long-term debt | |||||||||||
Aggregate principal amount | 625,000,000 | ||||||||||
Loss on extinguishment of debt | $ 600,000 | ||||||||||
Interest period, option one | 1 month | ||||||||||
Interest period, option two | 2 months | ||||||||||
Interest period, option three | 3 months | ||||||||||
Interest period, option four | 6 months | ||||||||||
Prepayment penalty | $ 0 | ||||||||||
2016 Credit Facilities | Term loans, first lien | Quarterly until September 30, 2021 | |||||||||||
Long-term debt | |||||||||||
Quarterly payment amount | 7,200,000 | ||||||||||
2016 Credit Facilities | Term loans, first lien | December 6, 2021 | |||||||||||
Long-term debt | |||||||||||
Quarterly payment amount | 1,033,000,000 | ||||||||||
2016 Credit Facilities | Revolving Credit Facility | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 125,000,000 | 225,000,000 | $ 225,000,000 | $ 225,000,000 | |||||||
Term of credit facility | 5 years | ||||||||||
Interest period, option one | 1 month | ||||||||||
Interest period, option two | 2 months | ||||||||||
Interest period, option three | 3 months | ||||||||||
Interest period, option four | 6 months | ||||||||||
Outstanding borrowings | 91,500,000 | 0 | $ 91,500,000 | 0 | |||||||
Outstanding letters of credit | 4,900,000 | $ 7,000,000 | $ 4,900,000 | 7,000,000 | |||||||
2016 Credit Facilities | Revolving Credit Facility | Minimum | |||||||||||
Long-term debt | |||||||||||
Commitment fee (as a percent) | 0.20% | ||||||||||
2016 Credit Facilities | Revolving Credit Facility | Maximum | |||||||||||
Long-term debt | |||||||||||
Commitment fee (as a percent) | 0.40% | ||||||||||
2016 Credit Facilities | Revolving Credit Facility | LIBOR | Minimum | |||||||||||
Long-term debt | |||||||||||
Variable base rate minimum floor (as a percent) | 0.00% | ||||||||||
2013 Credit Facilities | Term loans, first lien | |||||||||||
Long-term debt | |||||||||||
Aggregate principal amount | 825,000,000 | ||||||||||
Scheduled principal payments as a percentage of original principal balance | 0.25% | ||||||||||
Interest period, option one | 1 month | ||||||||||
Interest period, option two | 2 months | ||||||||||
Interest period, option three | 3 months | ||||||||||
Interest period, option four | 6 months | ||||||||||
Prepayment penalty | $ 0 | ||||||||||
Percentage of annual excess cash flow required to be used for prepayment | 50.00% | ||||||||||
Step-down percentage of annual excess cash flow required to be used for prepayment if specified debt-to-EBITDA ratio achieved | 25.00% | ||||||||||
2013 Credit Facilities | Term loans, first lien | Minimum | |||||||||||
Long-term debt | |||||||||||
Specified debt-to-EBITDA ratio which triggers a reduced loan prepayment requirements | 3.25 | ||||||||||
2013 Credit Facilities | Term loans, first lien | Maximum | |||||||||||
Long-term debt | |||||||||||
Specified debt-to-EBITDA ratio which triggers a reduced loan prepayment requirements | 3.75 | ||||||||||
Specified debt-to-EBITDA ratio which, if achieved, will result in no prepayment requirements | 3.25 | ||||||||||
2013 Credit Facilities | Term loans, first lien | LIBOR | |||||||||||
Long-term debt | |||||||||||
Applicable margin on variable rate basis (as a percent) | 3.50% | ||||||||||
2013 Credit Facilities | Term loans, first lien | LIBOR | Minimum | |||||||||||
Long-term debt | |||||||||||
Variable base rate minimum floor (as a percent) | 1.00% | ||||||||||
2013 Credit Facilities | Revolving Credit Facility | |||||||||||
Long-term debt | |||||||||||
Maximum borrowing capacity | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 | ||||||||
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% | ||||||||||
Loss on modification or extinguishment of debt | Senior notes | |||||||||||
Long-term debt | |||||||||||
Write-off of unamortized debt issuance costs | $ 2,100,000 | 3,700,000 | |||||||||
Fees associated with extinguishment of debt | 400,000 | ||||||||||
Prepayment penalty | $ 9,200,000 | 17,400,000 | |||||||||
Loss on modification or extinguishment of debt | 2013 Credit Facilities | Term loans, first lien | |||||||||||
Long-term debt | |||||||||||
Loss on extinguishment of debt | 16,700,000 | ||||||||||
Write-off of unamortized debt issuance costs | 15,800,000 | ||||||||||
Fees associated with extinguishment of debt | $ 900,000 |
Revolving Credit Facilities a79
Revolving Credit Facilities and Long-Term Debt - Senior Notes and A/R Financing Agreement (Details) - USD ($) $ in Thousands | Dec. 29, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 22, 2016 | Mar. 17, 2016 | Sep. 30, 2013 |
Long-term debt | ||||||||||||
Long-term debt, gross | $ 1,260,927 | $ 836,441 | $ 1,260,927 | $ 836,441 | ||||||||
Loss on modification or extinguishment of debt | 11,900 | $ 3,100 | 16,700 | $ 21,500 | 15,023 | 38,178 | $ 0 | |||||
Estimated fair value of long-term debt | 844,200 | 844,200 | ||||||||||
Term loans, first lien | ||||||||||||
Long-term debt | ||||||||||||
Long-term debt, gross | 1,140,927 | 625,000 | 1,140,927 | 625,000 | ||||||||
Senior notes | ||||||||||||
Long-term debt | ||||||||||||
Long-term debt, gross | $ 0 | 91,441 | $ 0 | 91,441 | $ 375,000 | |||||||
Interest rate (as a percent) | 9.50% | 9.50% | ||||||||||
Repayment of prepayment premium as percentage of principal amount in event of change in control | 1.00% | |||||||||||
Aggregate principal amount of debt repurchase | $ 133,600 | |||||||||||
Loss on modification or extinguishment of debt | $ 11,300 | 21,500 | ||||||||||
Extinguishment of debt | $ 91,400 | |||||||||||
Senior notes | Loss on modification or extinguishment of debt | ||||||||||||
Long-term debt | ||||||||||||
Prepayment penalty | 9,200 | 17,400 | ||||||||||
Write-off of unamortized debt issuance costs | 2,100 | 3,700 | ||||||||||
Fees associated with extinguishment of debt | 400 | |||||||||||
Senior notes | Level 2 | ||||||||||||
Long-term debt | ||||||||||||
Senior Notes fair value | $ 99,200 | $ 99,200 | ||||||||||
Senior notes | Maximum | ||||||||||||
Long-term debt | ||||||||||||
Prepayment premium (as a percent) | 4.75% | |||||||||||
Senior notes | Minimum | ||||||||||||
Long-term debt | ||||||||||||
Prepayment premium (as a percent) | 0.00% | |||||||||||
Accounts receivable financing agreement | ||||||||||||
Long-term debt | ||||||||||||
Long-term debt, gross | 120,000 | 120,000 | $ 120,000 | 120,000 | ||||||||
Maximum borrowing capacity | $ 140,000 | $ 140,000 | ||||||||||
Outstanding borrowings | 120,000 | $ 120,000 | ||||||||||
Notice period for prepayment of loans | 1 day | |||||||||||
Notice period required for termination of agreement | 15 days | |||||||||||
Weighted average interest rate (percentage) | 2.96% | |||||||||||
Remaining borrowing capacity | 20,000 | $ 20,000 | ||||||||||
Accounts receivable financing agreement | LIBOR | ||||||||||||
Long-term debt | ||||||||||||
Applicable margin on variable rate basis (as a percent) | 1.60% | |||||||||||
Accounts receivable financing agreement | ABR | ||||||||||||
Long-term debt | ||||||||||||
Applicable margin on variable rate basis (as a percent) | 1.60% | |||||||||||
Term Loans, Credit Facility Borrowings, and Accounts Receivable Financing Agreement | Level 3 | ||||||||||||
Long-term debt | ||||||||||||
Fair value of the term loans, borrowings under credit facilities, and accounts receivable financing agreement | $ 1,352,400 | $ 678,700 | $ 1,352,400 | $ 678,700 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-Based Compensation Plans (Details) - USD ($) | Nov. 16, 2016 | Mar. 02, 2016 | Sep. 23, 2013 | Dec. 31, 2013 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 23, 2014 |
Employee stock options | |||||||||
Awards | |||||||||
Unrecognized compensation cost | $ 59,400,000 | ||||||||
Weighted average period for recognition of unrecognized compensation cost | 2 years | ||||||||
Fair value of options vested in period | $ 5,200,000 | $ 27,300,000 | $ 3,100,000 | ||||||
Employee stock options | Service-based options | |||||||||
Awards | |||||||||
Contractual life | 10 years | ||||||||
Employee stock options | Service-based options | Transaction-related costs | |||||||||
Awards | |||||||||
Incremental compensation expense | $ 5,300,000 | $ 3,700,000 | 10,100,000 | ||||||
2013 Plan | |||||||||
Awards | |||||||||
Shares available for grant, as a percentage of the outstanding balance | 12.50% | ||||||||
2013 Plan | Employee stock options | |||||||||
Awards | |||||||||
Number of stock options rolled into new plan | 2,052,909 | ||||||||
Vesting period | 5 years | ||||||||
2013 Plan | Employee stock options | 2.0x Options | |||||||||
Awards | |||||||||
Stock-based compensation expense | $ 0 | ||||||||
Expected life, in years | 2 years 11 months 1 day | ||||||||
Risk-free interest rate (as a percent) | 1.04% | ||||||||
Volatility (as a percent) | 45.00% | ||||||||
Dividend rate (as a percent) | 0.00% | ||||||||
Finnerty discount (as a percent) | 16.00% | ||||||||
Number of options for which vesting criteria was modified | 835,551 | ||||||||
2013 Plan | Employee stock options | 2.0x Options | Transaction-related costs | |||||||||
Awards | |||||||||
Incremental compensation expense | $ 800,000 | 25,700,000 | |||||||
2013 Plan | Employee stock options | 2.5x Options | |||||||||
Awards | |||||||||
Stock-based compensation expense | $ 0 | ||||||||
Options vested | 809,755 | ||||||||
2013 Plan | Employee stock options | 2.5x Options | Transaction-related costs | |||||||||
Awards | |||||||||
Incremental compensation expense | $ 800,000 | $ 6,400,000 | |||||||
2014 Omnibus Plan | |||||||||
Awards | |||||||||
Shares authorized for grant (in shares) | 3,200,000 | ||||||||
2014 Omnibus Plan | Employee stock options | |||||||||
Awards | |||||||||
Vesting period | 4 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Employee stock options - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Options | |||
Outstanding at beginning of period (in shares) | 5,507,347 | ||
Granted (in shares) | 1,921,000 | ||
Exercised (shares) | (2,094,886) | ||
Expired/forfeited (in shares) | (87,836) | ||
Outstanding at end of period (in shares) | 5,245,625 | 5,507,347 | |
Exercisable (in shares) | 2,247,920 | ||
Share-based Compensation Arrangement By Share-based Payment Award, Options, Exercises In Period, Withheld | 190,683 | ||
Wtd. Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 15.38 | ||
Granted (in dollars per share) | 75.21 | ||
Exercised (in dollars per share) | 10.19 | ||
Expired/forfeited (in dollars per share) | 28.47 | ||
Outstanding at end of period (in dollars per share) | 39.14 | $ 15.38 | |
Exercisable (in dollars per share) | $ 14.12 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Weighted average remaining contractual life, outstanding | 7 years 7 months 12 days | 6 years 8 months 12 days | |
Weighted average remaining contractual life, exercisable | 6 years 12 days | ||
Intrinsic value, outstanding | $ 272.4 | $ 218.9 | |
Intrinsic value, exercisable | $ 173 | ||
Weighted average fair value of options granted (in dollars per share) | $ 25.24 | $ 15.57 | $ 10.87 |
Stock-Based Compensation - St83
Stock-Based Compensation - Stock Options by Exercise Price (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Stock options by exercise price range | |
Brokerage Commissions Revenue | $ | $ 2.7 |
Range One | Employee stock options | |
Options Outstanding | |
Wtd. Average Exercise Price (in dollars per share) | $ 2.94 |
Number of Options (in shares) | shares | 27,304 |
Wtd Average Remaining Life (in Years) | 5 years 12 days |
Options Exercisable | |
Number of options (in shares) | shares | 27,304 |
Weighted average remaining life (in years) | 5 years |
Weighted average exercise price (in dollars per share) | $ 2.94 |
Range Two | Employee stock options | |
Stock options by exercise price range | |
Exercise price range, lower limit | 11.73 |
Exercise price range, upper limit | 16.42 |
Options Outstanding | |
Wtd. Average Exercise Price (in dollars per share) | $ 11.89 |
Number of Options (in shares) | shares | 2,441,121 |
Wtd Average Remaining Life (in Years) | 5 years 11 months 5 days |
Options Exercisable | |
Number of options (in shares) | shares | 1,971,291 |
Weighted average remaining life (in years) | 5 years 11 months |
Weighted average exercise price (in dollars per share) | $ 11.82 |
Range Three | Employee stock options | |
Stock options by exercise price range | |
Exercise price range, lower limit | 25.35 |
Exercise price range, upper limit | 74.13 |
Options Outstanding | |
Wtd. Average Exercise Price (in dollars per share) | $ 42.93 |
Number of Options (in shares) | shares | 1,058,700 |
Wtd Average Remaining Life (in Years) | 8 years 1 month 9 days |
Options Exercisable | |
Number of options (in shares) | shares | 249,325 |
Weighted average remaining life (in years) | 7 years 5 months |
Weighted average exercise price (in dollars per share) | $ 33.51 |
Range Four | Employee stock options | |
Stock options by exercise price range | |
Exercise price range, lower limit | 75.01 |
Exercise price range, upper limit | 83.37 |
Options Outstanding | |
Wtd. Average Exercise Price (in dollars per share) | $ 76.08 |
Number of Options (in shares) | shares | 1,718,500 |
Wtd Average Remaining Life (in Years) | 9 years 8 months 15 days |
Options Exercisable | |
Number of options (in shares) | shares | 0 |
Weighted average remaining life (in years) | 0 years |
Weighted average exercise price (in dollars per share) | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards and Units (Details) - RSAs and RSUs - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Awards | ||
Outstanding at beginning of period (in shares) | 188,590 | |
Granted (in shares) | 140,044 | |
Expired/Forfeited (in shares) | (12,000) | |
Vested (in shares) | (7,096) | |
Outstanding at end of period (in shares) | 309,538 | |
Wtd. Average Grant-Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 32.63 | |
Granted (in dollars per share) | 64.18 | |
Expired/Forfeited (in dollars per share) | 32.81 | |
Vested (in dollars per share) | 38.80 | |
Outstanding at end of period (in dollars per share) | $ 46.76 | |
Intrinsic Value | ||
Outstanding at end of period | $ 28.2 | $ 10.4 |
Employees | Vest on third anniversary | ||
Awards | ||
Percentage vesting | 100.00% | |
Non-employee directors | Vest on first anniversary | ||
Awards | ||
Percentage vesting | 50.00% | |
Non-employee directors | Vest on second anniversary | ||
Awards | ||
Percentage vesting | 50.00% |
Stock-Based Compensation - St85
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - Stock options, RSAs and RSUs - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation | |||
Stock-based compensation expense | $ 17,910 | $ 49,233 | $ 5,276 |
Direct costs | |||
Stock-based compensation | |||
Stock-based compensation expense | 3,552 | 1,813 | 1,218 |
Selling, general and administrative | |||
Stock-based compensation | |||
Stock-based compensation expense | 9,064 | 5,254 | 4,058 |
Transaction-related costs | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 5,294 | $ 42,166 | $ 0 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - 2017 Employee Stock Purchase Plan - Employee Stock $ in Thousands, shares in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
Awards | |
Maximum employee subscription rate of salary or wages | 15.00% |
ESPP discount percentage from market price, offering date | 15.00% |
ESPP discount percentage from market price, beginning of purchase period | 15.00% |
ESPP shares authorized (in shares) | shares | 3 |
ESPP maximum collective fair market value of shares per employee | $ | $ 25 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) and Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income (loss) before income taxes and equity in losses of unconsolidated joint ventures: | |||||||||||
Domestic | $ (52,083) | $ (61,226) | $ (23,400) | ||||||||
Foreign | 126,630 | 155,120 | 138,565 | ||||||||
Income before income taxes and equity in income (losses) of unconsolidated joint ventures | 74,547 | 93,894 | 115,165 | ||||||||
Current: | |||||||||||
Federal | 30,084 | 151 | 1,132 | ||||||||
State | 2,607 | 1,842 | 1,507 | ||||||||
Foreign | 30,601 | 36,970 | 30,584 | ||||||||
Total current income tax expense | 63,292 | 38,963 | 33,223 | ||||||||
Deferred: | |||||||||||
Federal | (70,041) | (2,230) | (1,349) | ||||||||
State | (1,203) | (451) | 1,564 | ||||||||
Foreign | (4,671) | (7,788) | (3,434) | ||||||||
Total deferred income tax benefit | (75,915) | (10,469) | (3,219) | ||||||||
Total income tax expense (benefit) | $ (12,458) | $ (18,241) | $ 10,193 | $ 7,883 | $ 10,625 | $ 10,821 | $ 12,312 | $ (5,264) | $ (12,623) | $ 28,494 | $ 30,004 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Federal tax rate change | (56.00%) | 0.00% | 0.00% |
State income taxes, net of federal benefit | (5.50%) | 0.30% | 2.00% |
Foreign rate differential | (20.30%) | (17.70%) | (13.60%) |
Foreign earnings taxed in the U.S. | 60.70% | 17.50% | 7.30% |
Foreign dividends | 5.20% | 0.00% | 0.00% |
Non-U.S. research and development credits | (3.30%) | (3.90%) | (4.40%) |
Stock-based compensation | (39.90%) | 1.90% | 0.20% |
Nondeductible contingent consideration | 35.40% | 0.00% | 0.00% |
Valuation allowance | (28.00%) | 0.00% | 0.00% |
Change in liability for uncertain tax positions | (3.20%) | 0.00% | (0.60%) |
Nondeductible expenses | 2.20% | 0.10% | 0.30% |
Other | 0.80% | (2.90%) | (0.10%) |
Effective income tax rate | (16.90%) | 30.30% | 26.10% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||||
Net operating loss carryforwards | $ 48,603 | $ 29,470 | ||
Accruals and reserves | 15,943 | 12,986 | ||
Equity based compensation | 7,447 | 17,392 | ||
Prepaid expenses and other | 13,492 | 25,232 | ||
Deferred and unbilled revenue | 24,937 | 25,718 | ||
Tax credits | 15,111 | 5,295 | ||
Deferred tax assets, gross | 125,533 | 116,093 | ||
Valuation allowance | (25,226) | (21,689) | $ (23,205) | $ (16,142) |
Total deferred tax assets (net of valuation allowance) | 100,307 | 94,404 | ||
Identified intangibles | (190,115) | (148,576) | ||
Depreciable, amortizable and other property | (13,434) | (12,963) | ||
Deferred tax liabilities | (203,549) | (161,539) | ||
Net deferred tax liability | (103,242) | (67,135) | ||
Long-term deferred tax asset | 8,939 | 6,568 | ||
Deferred tax liabilities | $ 112,181 | $ 73,703 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of gross unrecognized income tax benefits | |||
Beginning balance | $ 12,432 | $ 11,729 | $ 16,207 |
Additions based on tax positions related to current year | 1,641 | 1,196 | 1,333 |
Additions for income tax positions of prior years | 400 | 542 | 95 |
Impact of changes in exchange rates | 427 | (127) | (594) |
Impact of change in federal tax rate | (3,536) | 0 | 0 |
Settlements with tax authorities | (108) | (559) | 0 |
Reductions for income tax positions for prior years | (3,174) | (349) | (4,308) |
Reductions due to lapse of applicable statute of limitations | (171) | 0 | (1,004) |
Ending balance | $ 7,911 | $ 12,432 | $ 11,729 |
Income Taxes - Deferred Tax A91
Income Taxes - Deferred Tax Asset Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 21,689 | $ 23,205 | $ 16,142 |
Additions - excess benefit offset to NOL change | 12,623 | 0 | 0 |
Additions - purchase accounting | 219 | 0 | 0 |
Additions - other comprehensive income | 0 | 0 | 3,892 |
Additions - charged to expense | 12,863 | 3,421 | 3,770 |
Additions - U.S. federal tax rate change | 1,330 | 0 | 0 |
Deductions - charged to expense (including translation adjustments) | (23,498) | (4,937) | (599) |
Ending balance | $ 25,226 | $ 21,689 | $ 23,205 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating loss carryforwards | ||||
Cumulative foreign net operating loss carryforwards | $ 7,400 | |||
Federal net operating loss carryforwards | 165,600 | |||
State net operating loss carryforwards | $ 506,800 | |||
Operating loss carryforward period, minimum | 5 years | |||
Additional income tax expense | $ 200 | |||
Provisional income tax expense (benefit) | 41,700 | |||
Provisional tax on repatriation of foreign earnings | 77,600 | |||
Cumulative foreign earnings | 392,500 | |||
Foreign tax credit | 35,700 | |||
Foreign tax credit valuation allowance | 12,800 | |||
Tax credits | 15,111 | $ 5,295 | ||
Unrecognized tax benefits | 7,911 | 12,432 | $ 11,729 | $ 16,207 |
Amount of gross unrecognized tax benefits which would impact the Company's effective tax rate | 7,900 | |||
Amount of gross unrecognized tax benefit expected to be recognized within the next 12 months | 500 | |||
Decrease Income tax penalties and interest | 800 | $ 100 | ||
Increase Income tax penalties and interest | $ 100 | |||
Interest and penalties recognized on uncertain tax positions | 1,600 | |||
Repatriation of foreign earnings, asset | 1,000 | |||
Federal | ||||
Operating loss carryforwards | ||||
Decrease in valuation allowance | 21,200 | |||
Tax credits | 12,800 | |||
State | ||||
Operating loss carryforwards | ||||
Tax credits | $ 1,900 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense under operating leases, net of sublease rental income | $ 37,000 | $ 31,900 | $ 30,100 |
Leases | |||
2,018 | 44,071 | ||
2,019 | 38,871 | ||
2,020 | 35,494 | ||
2,021 | 31,783 | ||
2,022 | 25,970 | ||
2023 and thereafter | 110,394 | ||
Total | 286,583 | ||
Sublease Rental Income | |||
2,018 | (181) | ||
2,019 | (125) | ||
2,020 | (125) | ||
2,021 | (124) | ||
2,022 | (41) | ||
2023 and thereafter | 0 | ||
Total | (596) | ||
Net Total | |||
2,018 | 43,890 | ||
2,019 | 38,746 | ||
2,020 | 35,369 | ||
2,021 | 31,659 | ||
2,022 | 25,929 | ||
2023 and thereafter | 110,394 | ||
Total | $ 285,987 |
Commitments and Contingencies94
Commitments and Contingencies - Employment Agreements (Details) - Employment Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Vice presidents | |
Employment Agreements | |
Severance period | 6 months |
Senior vice presidents | |
Employment Agreements | |
Severance period | 9 months |
Executive vice presidents | |
Employment Agreements | |
Severance period | 12 months |
President and chief executive officer | |
Employment Agreements | |
Severance period | 12 months |
Commitments and Contingencies95
Commitments and Contingencies - Legal Proceedings (Details) - Litigation with City of Sao Paulo, Brazil $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Legal Proceedings | |
Claim amount | $ 5.2 |
Amount deposited | $ 5.2 |
Commitments and Contingencies96
Commitments and Contingencies - Insurance (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
General Insurance | ||
Insurance | ||
Maximum retentions and deductibles | $ 500,000 | |
Employee Health Insurance | ||
Insurance | ||
Stop-loss limit per member | 300,000 | |
Self-insurance reserve | $ 5,000,000 | $ 4,100,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined contribution plans | |||
Employer contributions | $ 11.9 | $ 9.9 | $ 6.6 |
Maximum | |||
Defined contribution plans | |||
Percentage of pay matched by employer | 6.00% | ||
Japan | |||
Defined contribution plans | |||
Funded (unfunded) status of defined benefit pension plan | $ 0.8 | ||
Germany | |||
Defined contribution plans | |||
Funded (unfunded) status of defined benefit pension plan | $ (0.7) |
Derivatives -Narrative (Details
Derivatives -Narrative (Details) - USD ($) | Oct. 02, 2013 | Dec. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Derivatives | |||||||
Amount paid to terminate interest rate swaps | $ 0 | $ 0 | $ 32,907,000 | ||||
Interest rate swap | |||||||
Derivatives | |||||||
Notional amount | $ 620,000,000 | ||||||
Amount paid to terminate interest rate swaps | $ 32,900,000 | ||||||
Unrealized losses expected to be reclassified out of accumulated other comprehensive (loss) income into interest expense | $ 29,600,000 | ||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | 6,300,000 | 4,700,000 | 700,000 | ||||
2015 Swap | |||||||
Derivatives | |||||||
Notional amount | $ 250,000,000 | ||||||
Unrealized losses expected to be reclassified out of accumulated other comprehensive (loss) income into interest expense | $ 800,000 | ||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | 400,000 | ||||||
Fixed interest rate | 1.48% | ||||||
Minimum | Interest rate swap | |||||||
Derivatives | |||||||
Interest rate swap maturity, low end of range | 1 year | ||||||
Maximum | Interest rate swap | |||||||
Derivatives | |||||||
Interest rate swap maturity, low end of range | 5 years | ||||||
Cash flow hedging | Interest rate contracts | |||||||
Derivatives | |||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | (6,855,000) | $ (5,921,000) | $ (908,000) | ||||
Unrealized losses expected to be reclassified out of accumulated other comprehensive (loss) income into interest expense over the next 12 months | $ 6,300,000 | ||||||
Estimated period for the anticipated transfer of (loss) income from accumulated other comprehensive income into earnings | 12 months |
Derivatives -Notional Amounts a
Derivatives -Notional Amounts and Fair Values of Derivatives (Details) - Designated as hedging instruments - Level 2 - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Other current assets | ||
Derivatives in an asset position: | ||
Notional amount | $ 250,000,000 | $ 0 |
Asset/(Liability) | 428,000 | 0 |
Other long-term liabilities | ||
Derivatives in a liability position: | ||
Notional amount | 0 | 250,000,000 |
Asset/(Liability) | $ 0 | $ 590,000 |
Derivatives -Cash Flow Hedging
Derivatives -Cash Flow Hedging Instruments (Details) - Cash flow hedging - Interest rate contracts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effect of derivatives on the consolidated statements of operations and comprehensive income (loss) | |||
Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) on derivatives | $ 245 | $ (1,600) | $ (11,851) |
Amount of loss recognized in other (expense) income, net on derivatives (ineffective portion) | 0 | 1 | (444) |
Amount of loss recognized in other (expense) income, net on derivatives (no longer qualify for hedge accounting) | 0 | 0 | (1,137) |
Amount of loss reclassified from accumulated other comprehensive loss into interest expense, net on derivatives | $ (6,855) | $ (5,921) | $ (908) |
Accumulated Other Comprehens101
Accumulated Other Comprehensive Income -Narrative (Details) - Foreign Currency Translation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of components of accumulated other comprehensive loss | |||
Other comprehensive loss before reclassifications, net of tax | $ 83,911 | $ (95,019) | $ (52,433) |
British Pound (GBP) | |||
Summary of components of accumulated other comprehensive loss | |||
Other comprehensive loss before reclassifications, net of tax | $ 46,000 | $ (90,200) | $ (25,800) |
Change in valuation of U.S. Dollar during the period (as a percent) | (9.30%) | 16.70% | 4.60% |
Euro (EUR) | |||
Summary of components of accumulated other comprehensive loss | |||
Other comprehensive loss before reclassifications, net of tax | $ 31,000 | $ (8,400) | $ (16,400) |
Change in valuation of U.S. Dollar during the period (as a percent) | (13.70%) | 3.60% | 10.10% |
Canadian Dollar (CAD) | |||
Summary of components of accumulated other comprehensive loss | |||
Other comprehensive loss before reclassifications, net of tax | $ 3,500 | $ 1,100 | $ (7,100) |
Change in valuation of U.S. Dollar during the period (as a percent) | (7.10%) | (3.10%) | 16.10% |
Russian Ruble (RUB) | |||
Summary of components of accumulated other comprehensive loss | |||
Other comprehensive loss before reclassifications, net of tax | $ 1,900 | $ 4,000 | |
Change in valuation of U.S. Dollar during the period (as a percent) | (6.20%) | (19.50%) |
Accumulated Other Comprehens102
Accumulated Other Comprehensive Income -Components of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of components of accumulated other comprehensive (loss) income | |||
Beginning balance | $ (224,686) | ||
End balance | (136,470) | $ (224,686) | |
Accumulated Other Comprehensive (Loss) Income | |||
Summary of components of accumulated other comprehensive (loss) income | |||
Beginning balance | (224,686) | (132,307) | $ (69,509) |
Other comprehensive loss before reclassifications, net of tax | 84,060 | (95,997) | (63,706) |
Reclassification adjustments, net of tax | 4,156 | 3,618 | 908 |
End balance | (136,470) | (224,686) | (132,307) |
Foreign Currency Translation | |||
Summary of components of accumulated other comprehensive (loss) income | |||
Beginning balance | (201,091) | (106,072) | (53,639) |
Other comprehensive loss before reclassifications, net of tax | 83,911 | (95,019) | (52,433) |
Reclassification adjustments, net of tax | 0 | 0 | 0 |
End balance | (117,180) | (201,091) | (106,072) |
Derivative Instruments | |||
Summary of components of accumulated other comprehensive (loss) income | |||
Beginning balance | (23,595) | (26,235) | (15,870) |
Other comprehensive loss before reclassifications, net of tax | 149 | (978) | (11,273) |
Reclassification adjustments, net of tax | 4,156 | 3,618 | 908 |
End balance | $ (19,290) | $ (23,595) | $ (26,235) |
Net Income (Loss) Per Share -Re
Net Income (Loss) Per Share -Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of basic to diluted weighted average shares outstanding | |||
Basic weighted average common shares outstanding (in shares) | 62,437 | 60,759 | 59,965 |
Effect of dilutive stock options and RSAs (in shares) | 3,336 | 3,693 | 3,242 |
Diluted weighted average common shares outstanding (in shares) | 65,773 | 64,452 | 63,207 |
Anti-dilutive shares (in shares) | 741 | 305 | 115 |
Supplemental Cash Flow Infor104
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash paid during the period for: | |||
Income taxes, net of refunds | $ 47,829 | $ 27,644 | $ 17,148 |
Interest | 48,330 | 48,156 | 54,632 |
Non-cash investing and financing activities: | |||
Issuance of common stock for the acquisition of Value Health Solutions, Inc. | 369 | 0 | 1,582 |
Accrued fixed assets purchases | 3,962 | 2,644 | 2,733 |
Cashless exercises of stock options | 13,252 | 9,456 | $ 1,672 |
Contingent consideration liability recognized | 114,692 | $ 1,735 | |
Symphony Health Solutions, Inc. and Parallel 6, Inc. | |||
Non-cash investing and financing activities: | |||
Contingent consideration liability recognized | $ 155,800 |
Operations by Geographic Are105
Operations by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operations by geographical region | |||||||||||
Service revenue | $ 568,802 | $ 494,550 | $ 457,942 | $ 427,080 | $ 413,613 | $ 399,841 | $ 394,249 | $ 372,320 | $ 1,948,374 | $ 1,580,023 | $ 1,375,847 |
Reimbursement revenue | 87,094 | 87,459 | 75,782 | 60,680 | 58,773 | 53,414 | 61,598 | 57,903 | 311,015 | 231,688 | 238,036 |
Total revenue | 655,896 | $ 582,009 | $ 533,724 | $ 487,760 | 472,386 | $ 453,255 | $ 455,847 | $ 430,223 | 2,259,389 | 1,811,711 | 1,613,883 |
Long-lived assets | 143,070 | 87,577 | 143,070 | 87,577 | |||||||
United States | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 1,310,772 | 1,063,625 | 898,637 | ||||||||
Long-lived assets | 107,952 | 60,462 | 107,952 | 60,462 | |||||||
Other | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 42,227 | 33,320 | 32,802 | ||||||||
Long-lived assets | 1,714 | 802 | 1,714 | 802 | |||||||
Americas | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 1,352,999 | 1,096,945 | 931,439 | ||||||||
Long-lived assets | 109,666 | 61,264 | 109,666 | 61,264 | |||||||
United Kingdom | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 479,623 | 394,363 | 364,476 | ||||||||
Long-lived assets | 4,182 | 3,569 | 4,182 | 3,569 | |||||||
Netherlands | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 79,555 | 68,118 | 57,739 | ||||||||
Long-lived assets | 15,876 | 13,313 | 15,876 | 13,313 | |||||||
Other | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 36,197 | 20,597 | 22,193 | ||||||||
Long-lived assets | 13,346 | 9,431 | 13,346 | 9,431 | |||||||
Europe, Africa, and Asia-Pacific | |||||||||||
Operations by geographical region | |||||||||||
Service revenue | 595,375 | 483,078 | $ 444,408 | ||||||||
Long-lived assets | $ 33,404 | $ 26,313 | $ 33,404 | $ 26,313 |
Segments (Details)
Segments (Details) | 3 Months Ended | 4 Months Ended | 8 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017reportable_segments | Sep. 05, 2017reportable_segments | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||||
Reportable segments | reportable_segments | 2 | 1 | |||||||||||
Service revenue | $ 568,802,000 | $ 494,550,000 | $ 457,942,000 | $ 427,080,000 | $ 413,613,000 | $ 399,841,000 | $ 394,249,000 | $ 372,320,000 | $ 1,948,374,000 | $ 1,580,023,000 | $ 1,375,847,000 | ||
Direct costs | 1,283,868,000 | 1,032,688,000 | 886,528,000 | ||||||||||
Gross profit | 664,506,000 | 547,335,000 | 489,319,000 | ||||||||||
Selling, general and administrative | 321,987,000 | 269,893,000 | 246,417,000 | ||||||||||
Transaction-related costs | 75,000,000 | 0 | 13,000,000 | 2,900,000 | 28,900,000 | 87,709,000 | 44,834,000 | 0 | |||||
Depreciation and amortization | 78,227,000 | 69,506,000 | 77,952,000 | ||||||||||
Loss on disposal of fixed assets | 358,000 | 753,000 | 652,000 | ||||||||||
Income from operations | 3,613,000 | 57,776,000 | $ 64,850,000 | $ 49,986,000 | 38,241,000 | $ 54,814,000 | $ 50,348,000 | 18,946,000 | 176,225,000 | 162,349,000 | 164,298,000 | ||
Interest expense, net | (46,729,000) | (54,913,000) | (61,747,000) | ||||||||||
Loss on modification or extinguishment of debt | $ (11,900,000) | $ (3,100,000) | $ (16,700,000) | $ (21,500,000) | (15,023,000) | (38,178,000) | 0 | ||||||
Foreign currency (losses) gains, net | (39,622,000) | 24,029,000 | 14,048,000 | ||||||||||
Other (expense) income, net | (304,000) | 607,000 | (1,434,000) | ||||||||||
Income before income taxes and equity in income (losses) of unconsolidated joint ventures | 74,547,000 | 93,894,000 | 115,165,000 | ||||||||||
Operating segments | Clinical Research | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Service revenue | 1,857,876,000 | 1,580,023,000 | 1,375,847,000 | ||||||||||
Direct costs | 1,231,690,000 | 1,032,688,000 | 886,528,000 | ||||||||||
Gross profit | 626,186,000 | 547,335,000 | 489,319,000 | ||||||||||
Operating segments | Data Solutions | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Service revenue | 90,498,000 | 0 | 0 | ||||||||||
Direct costs | 52,178,000 | 0 | 0 | ||||||||||
Gross profit | 38,320,000 | 0 | 0 | ||||||||||
Segment reconciling items | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Selling, general and administrative | 321,987,000 | 269,893,000 | 246,417,000 | ||||||||||
Transaction-related costs | 87,709,000 | 44,834,000 | 0 | ||||||||||
Depreciation and amortization | 78,227,000 | 69,506,000 | 77,952,000 | ||||||||||
Loss on disposal of fixed assets | 358,000 | 753,000 | 652,000 | ||||||||||
Interest expense, net | (46,729,000) | (54,913,000) | (61,747,000) | ||||||||||
Loss on modification or extinguishment of debt | (15,023,000) | (38,178,000) | 0 | ||||||||||
Foreign currency (losses) gains, net | (39,622,000) | 24,029,000 | 14,048,000 | ||||||||||
Other (expense) income, net | $ (304,000) | $ 607,000 | $ (1,434,000) |
Quarterly Financial Data (un107
Quarterly Financial Data (unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Service revenue | $ 568,802,000 | $ 494,550,000 | $ 457,942,000 | $ 427,080,000 | $ 413,613,000 | $ 399,841,000 | $ 394,249,000 | $ 372,320,000 | $ 1,948,374,000 | $ 1,580,023,000 | $ 1,375,847,000 |
Reimbursement revenue | 87,094,000 | 87,459,000 | 75,782,000 | 60,680,000 | 58,773,000 | 53,414,000 | 61,598,000 | 57,903,000 | 311,015,000 | 231,688,000 | 238,036,000 |
Total revenue | 655,896,000 | 582,009,000 | 533,724,000 | 487,760,000 | 472,386,000 | 453,255,000 | 455,847,000 | 430,223,000 | 2,259,389,000 | 1,811,711,000 | 1,613,883,000 |
Income from operations | 3,613,000 | 57,776,000 | 64,850,000 | 49,986,000 | 38,241,000 | 54,814,000 | 50,348,000 | 18,946,000 | 176,225,000 | 162,349,000 | 164,298,000 |
(Benefit from) provision for income taxes | (12,458,000) | (18,241,000) | 10,193,000 | 7,883,000 | 10,625,000 | 10,821,000 | 12,312,000 | (5,264,000) | (12,623,000) | 28,494,000 | 30,004,000 |
(Loss) income before equity in losses of unconsolidated joint ventures | (16,226,000) | 48,582,000 | 29,632,000 | 25,182,000 | 13,992,000 | 31,416,000 | 35,423,000 | (15,431,000) | |||
Equity in gains of unconsolidated joint ventures | 31,000 | 24,000 | 26,000 | 42,000 | 33,000 | 33,000 | 3,247,000 | (538,000) | |||
Net income | (16,195,000) | 48,606,000 | 29,658,000 | 25,224,000 | 14,025,000 | 31,449,000 | 38,670,000 | (15,969,000) | 87,293,000 | 68,175,000 | 81,765,000 |
Net income attributable to noncontrolling interest | 147,000 | (401,000) | (112,000) | 0 | (366,000) | 0 | 0 | ||||
Net income attributable to PRA Health Sciences, Inc. | (16,048,000) | 48,205,000 | 29,546,000 | 25,224,000 | 86,927,000 | 68,175,000 | 81,765,000 | ||||
Comprehensive income (loss) | (6,380,000) | 75,348,000 | 63,892,000 | 42,552,000 | 175,412,000 | (24,204,000) | 18,967,000 | ||||
Comprehensive income attributable to noncontrolling interest | 154,000 | (373,000) | (50,000) | 0 | (269,000) | 0 | 0 | ||||
Comprehensive income (loss) attributable to PRA Health Sciences, Inc. | $ (6,226,000) | $ 74,975,000 | $ 63,842,000 | $ 42,552,000 | $ (24,502,000) | $ 21,982,000 | $ 567,000 | $ (22,251,000) | $ 175,143,000 | $ (24,204,000) | $ 18,967,000 |
Basic (in dollars per share) | $ (0.25) | $ 0.77 | $ 0.47 | $ 0.41 | $ 0.23 | $ 0.52 | $ 0.64 | $ (0.27) | $ 1.39 | $ 1.12 | $ 1.36 |
Diluted (in dollars per share) | $ (0.25) | $ 0.73 | $ 0.45 | $ 0.39 | $ 0.22 | $ 0.49 | $ 0.60 | $ (0.27) | $ 1.32 | $ 1.06 | $ 1.29 |
Transaction-related costs | $ 75,000,000 | $ 0 | $ 13,000,000 | $ 2,900,000 | $ 28,900,000 | $ 87,709,000 | $ 44,834,000 | $ 0 | |||
Loss on extinguishment of debt | 11,900,000 | $ 3,100,000 | $ 16,700,000 | $ 21,500,000 | 15,023,000 | 38,178,000 | 0 | ||||
Non-cash transaction related stock-based compensation expense | 5,294,000 | 42,166,000 | $ 0 | ||||||||
Third-party fees | 2,700,000 | ||||||||||
Fair value of contingent consideration | 1,000,000 | $ 100,000 | $ 100,000 | 100,000 | 500,000 | ||||||
Symphony Health | |||||||||||
Acquisition-related costs | 85,700,000 | 85,700,000 | |||||||||
Fair value of contingent consideration | 147,500,000 | ||||||||||
Symphony Health | Acquisition-related costs | |||||||||||
Acquisition-related costs | $ 6,400,000 | 6,400,000 | 6,400,000 | ||||||||
Loss on extinguishment of debt | 3,100,000 | ||||||||||
Transaction-related costs | Employee stock options | Service-based options | |||||||||||
Incremental compensation expense | 5,300,000 | 3,700,000 | 10,100,000 | ||||||||
Secondary Offerings | Transaction-related costs | |||||||||||
Third-party fees | $ 1,000,000 | $ 1,000,000 | $ 1,300,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 28, 2018 | Jan. 05, 2018 | Sep. 30, 2016 |
First Interest Rate Swap | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Notional amount | $ 375,000,000 | ||
Second Interest Rate Swap | |||
Subsequent Event [Line Items] | |||
Notional amount | $ 250,000,000 | ||
Second Interest Rate Swap | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Notional amount | $ 250,000,000 | ||
Acquisition of Symphony Health | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Acquisition-related contingent considerations | $ 114,700,000 |