Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 25, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39212 | |
Entity Registrant Name | PPD, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-3806427 | |
Entity Address, Address Line One | 929 North Front Street | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28401 | |
City Area Code | 910 | |
Local Phone Number | 251-0081 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | PPD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 351,394,547 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001793294 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,560,796 | $ 1,233,802 | $ 4,514,648 | $ 3,317,182 |
Operating costs and expenses: | ||||
Direct costs, exclusive of depreciation and amortization | 529,690 | 433,422 | 1,507,510 | 1,222,700 |
Reimbursed costs | 433,358 | 335,866 | 1,330,704 | 810,523 |
Selling, general and administrative expenses | 335,624 | 249,320 | 959,587 | 734,712 |
Depreciation and amortization | 74,028 | 71,317 | 227,426 | 206,395 |
Long-lived asset impairment | 0 | 1,414 | 1,584 | 1,414 |
Total operating costs and expenses | 1,372,700 | 1,091,339 | 4,026,811 | 2,975,744 |
Income from operations | 188,096 | 142,463 | 487,837 | 341,438 |
Interest expense, net of interest income of $381 and $433 for the three months ended September 30, 2021 and 2020, respectively, and $1,377 and $1,996 for the nine months ended September 30, 2021 and 2020, respectively | (46,231) | (49,882) | (139,577) | (165,995) |
Loss on extinguishment of debt | 0 | 0 | (10,677) | (93,534) |
Gain (loss) on investments | 18,971 | (53,100) | (28,127) | 16,649 |
Other income (expense), net | 21,022 | (17,153) | 17,392 | (14,097) |
Income before provision for income taxes | 181,858 | 22,328 | 326,848 | 84,461 |
Provision for income taxes | 39,993 | 11,169 | 81,421 | 20,682 |
Income before equity in earnings (losses) of unconsolidated affiliates | 141,865 | 11,159 | 245,427 | 63,779 |
Equity in (earnings) losses of unconsolidated affiliates, net of income taxes | 27,250 | (2,057) | 22,488 | (5,686) |
Net income | 169,115 | 9,102 | 267,915 | 58,093 |
Net income attributable to noncontrolling interest | (2,044) | (1,587) | (3,955) | (4,499) |
Net income attributable to PPD, Inc. | 167,071 | 7,515 | 263,960 | 53,594 |
Recapitalization investment portfolio consideration | (14,150) | 44,468 | 22,189 | (6,529) |
Net income attributable to common stockholders of PPD, Inc. | $ 152,921 | $ 51,983 | $ 286,149 | $ 47,065 |
Earnings per share attributable to common stockholders of PPD, Inc.: | ||||
Basic (in usd per share) | $ 0.44 | $ 0.15 | $ 0.82 | $ 0.14 |
Diluted (in usd per share) | $ 0.43 | $ 0.15 | $ 0.80 | $ 0.14 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 351,351 | 348,672 | 350,974 | 338,277 |
Diluted (in shares) | 359,538 | 354,830 | 358,826 | 343,159 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Investment income. interest | $ 381 | $ 433 | $ 1,377 | $ 1,996 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 169,115 | $ 9,102 | $ 267,915 | $ 58,093 |
Other comprehensive (loss) income, net of tax expense (benefit): | ||||
Foreign currency translation | (54,083) | 45,602 | (52,997) | (7,192) |
Defined benefit plan, net of income taxes of $41 and $28 for the three months ended September 30, 2021 and 2020, respectively, and $128 and $85 for the nine months ended September 30, 2021 and 2020, respectively | 179 | 138 | 550 | 380 |
Derivative instruments, net of income taxes of $1,812 and $297 for the three months ended September 30, 2021 and 2020, respectively, and $13,476 and $(31,300) for the nine months ended September 30, 2021 and 2020, respectively | 5,548 | 503 | 40,975 | (96,992) |
Other comprehensive (loss) income | (48,356) | 46,243 | (11,472) | (103,804) |
Comprehensive income (loss) | 120,759 | 55,345 | 256,443 | (45,711) |
Comprehensive income attributable to noncontrolling interest | (1,689) | (2,078) | (2,805) | (5,651) |
Comprehensive income (loss) attributable to PPD, Inc. | 119,070 | 53,267 | 253,638 | (51,362) |
Recapitalization investment portfolio consideration | (14,150) | 44,468 | 22,189 | (6,529) |
Comprehensive income (loss) attributable to common stockholders of PPD, Inc. | $ 104,920 | $ 97,735 | $ 275,827 | $ (57,891) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Defined benefit plan, net of income taxes | $ 41 | $ 28 | $ 128 | $ 85 |
Derivative instruments adjustments, income tax expense (benefit) | $ 1,812 | $ 297 | $ 13,476 | $ (31,300) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,172,716 | $ 767,999 |
Accounts receivable and unbilled services, net | 2,071,676 | 1,609,718 |
Income taxes receivable | 12,312 | 22,386 |
Prepaid expenses and other current assets | 172,363 | 146,100 |
Total current assets | 3,429,067 | 2,546,203 |
Property and equipment, net | 509,314 | 496,474 |
Investments in unconsolidated affiliates | 78,037 | 43,178 |
Investments | 241,482 | 265,894 |
Goodwill, net | 1,798,369 | 1,820,208 |
Intangible assets, net | 619,749 | 748,404 |
Other assets | 191,923 | 201,643 |
Operating lease right-of-use assets | 160,076 | 171,839 |
Total assets | 7,028,017 | 6,293,843 |
Current liabilities: | ||
Accounts payable | 181,499 | 176,341 |
Accrued expenses: | ||
Payables to investigators | 524,647 | 404,654 |
Accrued employee compensation | 354,604 | 331,156 |
Other accrued expenses | 202,465 | 195,779 |
Income taxes payable | 26,453 | 21,206 |
Unearned revenue | 1,429,817 | 1,060,544 |
Current portion of operating lease liabilities | 44,555 | 51,643 |
Current portion of long-term debt and finance lease obligations | 34,521 | 36,238 |
Total current liabilities | 2,798,561 | 2,277,561 |
Accrued income taxes | 22,198 | 18,658 |
Deferred tax liabilities | 50,827 | 54,535 |
Recapitalization investment portfolio liability | 169,734 | 191,923 |
Long-term operating lease liabilities, less current portion | 128,382 | 137,657 |
Long-term debt and finance lease obligations, less current portion | 4,207,811 | 4,226,192 |
Other liabilities | 37,191 | 98,908 |
Total liabilities | 7,414,704 | 7,005,434 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 37,734 | 34,929 |
Stockholders’ deficit: | ||
Preferred stock - $0.01 par value; 100,000 shares authorized; None issued and outstanding | 0 | 0 |
Common stock - $0.01 par value; 2,000,000 shares authorized; 352,029 shares issued and 351,390 shares outstanding as of September 30, 2021 and 350,858 shares issued and 350,132 shares outstanding as of December 31, 2020 | 3,520 | 3,509 |
Treasury stock, at cost, 639 and 726 shares as of September 30, 2021 and December 31, 2020, respectively | (11,928) | (13,268) |
Additional paid-in-capital | 1,865,963 | 1,819,892 |
Accumulated deficit | (1,985,659) | (2,271,808) |
Accumulated other comprehensive loss | (296,317) | (284,845) |
Total stockholders’ deficit | (424,421) | (746,520) |
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit | $ 7,028,017 | $ 6,293,843 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par or stated value per share (in usd 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 or stated value per share (in usd per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Shares issued (in shares) | 352,029,000 | 350,858,000 |
Shares outstanding (in shares) | 351,390,000 | 350,132,000 |
Treasury stock, shares (in shares) | 639,000 | 726,000 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt and finance lease obligations, less current portion | Long-term debt and finance lease obligations, less current portion |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt and finance lease obligations | Current portion of long-term debt and finance lease obligations |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 267,915 | $ 58,093 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 227,426 | 206,395 |
Stock-based compensation expense | 33,548 | 16,099 |
Operating lease right-of-use asset expense | 34,174 | 34,625 |
Amortization of debt issuance costs and debt discounts | 6,046 | 8,263 |
Loss (gain) on investments | 28,127 | (16,649) |
Deferred income tax (benefit) expense | (8,907) | 5,770 |
Loss on extinguishment of debt | 10,677 | 93,534 |
Amortization of costs to obtain a contract | 11,793 | 7,973 |
Equity in (earnings) losses of unconsolidated affiliates, net of income taxes | (22,488) | 5,686 |
Other | (1,280) | 256 |
Change in operating assets and liabilities: | ||
Accounts receivable and unbilled services, net | (516,639) | (148,501) |
Prepaid expenses and other current assets | (24,150) | 26,908 |
Other assets | (6,570) | (39,813) |
Income taxes, net | 22,101 | (21,445) |
Accounts payable, accrued expenses and other liabilities | 167,687 | 116,503 |
Operating lease liabilities | (38,203) | (33,165) |
Unearned revenue | 395,136 | (52,065) |
Net cash provided by operating activities | 586,393 | 268,467 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (88,213) | (116,418) |
Capital contributions paid for investments | (3,827) | (5,382) |
Distributions received from investments | 112 | 19,704 |
Investment in unconsolidated affiliate | (5,000) | (10,000) |
Other | (1,600) | 321 |
Net cash used in investing activities | (98,528) | (111,775) |
Cash flows from financing activities: | ||
Proceeds from New Term Loan | 3,034,750 | 0 |
Redemption of 2015 Term Loan | (3,064,006) | 0 |
Borrowing on revolving credit facility | 0 | 150,000 |
Repayment of revolving credit facility | 0 | (150,000) |
Proceeds from issuance of 2025 and 2028 Notes | 0 | 1,200,000 |
Redemption of HoldCo Notes | 0 | (1,464,500) |
Redemption of OpCo Notes | 0 | (1,160,865) |
Payments on long-term debt and finance leases | (18,118) | (32,080) |
Payment of debt issuance costs | (24,120) | (18,525) |
Payment of contingent consideration for acquisition of business | 0 | (4,338) |
Net proceeds from initial public offering | 0 | 1,772,960 |
Recapitalization investment portfolio distribution | (12,819) | 0 |
Proceeds from exercise of stock options | 16,075 | 14,272 |
Payments related to tax withholdings for stock-based compensation | (2,314) | 0 |
Purchase of treasury stock | 0 | (626) |
Net cash (used in) provided by financing activities | (70,552) | 306,298 |
Effect of exchange rate changes on cash and cash equivalents | (12,596) | (5,087) |
Net increase in cash and cash equivalents | 404,717 | 457,903 |
Cash and cash equivalents, beginning of the period | 767,999 | 345,187 |
Cash and cash equivalents, end of the period | $ 1,172,716 | $ 803,090 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT AND REDEEMABLE NONCONTROLLING INTEREST - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-in-Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Redeemable Noncontrolling Interest | ||||||
Beginning balance | $ 30,036 | |||||
Net income | 4,499 | |||||
Other comprehensive loss | 1,152 | |||||
Ending balance at Dec. 31, 2019 | 30,036 | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 280,127 | 701 | ||||
Beginning balance at Dec. 31, 2019 | (2,698,148) | $ 2,801 | $ 1,983 | $ (12,707) | $ (298,904) | $ (2,391,321) |
PPD, Inc. Stockholders’ Deficit | ||||||
Net income | 53,594 | 53,594 | ||||
Other comprehensive income (loss) | (103,804) | (103,804) | ||||
Issuance of common stock (in shares) | 70,164 | |||||
Issuance of common stock | 1,789,227 | $ 702 | 1,788,525 | |||
Repurchases of common stock (in shares) | 25 | |||||
Repurchases of common stock | (561) | $ (561) | ||||
Stock-based compensation expense | 16,099 | 16,099 | ||||
Recapitalization investment portfolio consideration | (6,529) | (6,529) | ||||
Other | (806) | (806) | ||||
Ending balance (in shares) at Sep. 30, 2020 | 350,291 | 726 | ||||
Ending balance at Sep. 30, 2020 | (950,928) | $ 3,503 | 1,806,607 | $ (13,268) | (402,708) | (2,345,062) |
Redeemable Noncontrolling Interest | ||||||
Beginning balance | 33,609 | |||||
Net income | 1,587 | |||||
Other comprehensive loss | 491 | |||||
Ending balance at Jun. 30, 2020 | 33,609 | |||||
Beginning balance (in shares) at Jun. 30, 2020 | 349,312 | 726 | ||||
Beginning balance at Jun. 30, 2020 | (1,068,126) | $ 3,493 | 1,787,645 | $ (13,268) | (448,951) | (2,397,045) |
PPD, Inc. Stockholders’ Deficit | ||||||
Net income | 7,515 | 7,515 | ||||
Other comprehensive income (loss) | 46,243 | 46,243 | ||||
Issuance of common stock (in shares) | 979 | |||||
Issuance of common stock | 13,563 | $ 10 | 13,553 | |||
Stock-based compensation expense | 5,409 | 5,409 | ||||
Recapitalization investment portfolio consideration | 44,468 | 44,468 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 350,291 | 726 | ||||
Ending balance at Sep. 30, 2020 | (950,928) | $ 3,503 | 1,806,607 | $ (13,268) | (402,708) | (2,345,062) |
Redeemable Noncontrolling Interest | ||||||
Beginning balance | 35,687 | |||||
Beginning balance | 34,929 | |||||
Net income | 3,955 | |||||
Other comprehensive loss | (1,150) | |||||
Ending balance at Dec. 31, 2020 | 34,929 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 350,858 | 726 | ||||
Beginning balance at Dec. 31, 2020 | (746,520) | $ 3,509 | 1,819,892 | $ (13,268) | (284,845) | (2,271,808) |
PPD, Inc. Stockholders’ Deficit | ||||||
Net income | 263,960 | 263,960 | ||||
Other comprehensive income (loss) | (11,472) | (11,472) | ||||
Issuance of common stock (in shares) | 1,171 | (87) | ||||
Issuance of common stock | 16,187 | $ 11 | 14,836 | $ 1,340 | ||
Stock-based compensation expense | 33,548 | 33,548 | ||||
Payments for taxes withheld for stock-based compensation | (2,313) | (2,313) | ||||
Recapitalization investment portfolio consideration | 22,189 | 22,189 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 352,029 | 639 | ||||
Ending balance at Sep. 30, 2021 | (424,421) | $ 3,520 | 1,865,963 | $ (11,928) | (296,317) | (1,985,659) |
Redeemable Noncontrolling Interest | ||||||
Beginning balance | 36,045 | |||||
Net income | 2,044 | |||||
Other comprehensive loss | (355) | |||||
Ending balance at Jun. 30, 2021 | 36,045 | |||||
Beginning balance (in shares) at Jun. 30, 2021 | 351,952 | 640 | ||||
Beginning balance at Jun. 30, 2021 | (542,787) | $ 3,520 | 1,852,175 | $ (11,941) | (247,961) | (2,138,580) |
PPD, Inc. Stockholders’ Deficit | ||||||
Net income | 167,071 | 167,071 | ||||
Other comprehensive income (loss) | (48,356) | (48,356) | ||||
Issuance of common stock (in shares) | 77 | (1) | ||||
Issuance of common stock | 1,275 | $ 0 | 1,262 | $ 13 | ||
Stock-based compensation expense | 12,600 | 12,600 | ||||
Payments for taxes withheld for stock-based compensation | (74) | (74) | ||||
Recapitalization investment portfolio consideration | (14,150) | (14,150) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 352,029 | 639 | ||||
Ending balance at Sep. 30, 2021 | (424,421) | $ 3,520 | $ 1,865,963 | $ (11,928) | $ (296,317) | $ (1,985,659) |
Redeemable Noncontrolling Interest | ||||||
Beginning balance | $ 37,734 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business PPD, Inc. (together with its subsidiaries “PPD” or the “Company”) is a holding company incorporated in Delaware. References to the “Company” throughout these condensed consolidated financial statements refer to PPD, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. The Company is a leading provider of drug development services to the biopharmaceutical industry, focused on helping the Company’s customers bring their medicines and other treatments to patients around the world. The Company has been in the drug development services business for 35 years, providing a comprehensive suite of clinical development and laboratory services to pharmaceutical, biotechnology, medical device, government organizations and other industry participants. The Company has deep experience across a broad range of rapidly growing areas of drug development and engages with customers through a variety of commercial models, including both full-service and functional service partnerships and other offerings tailored to address the specific needs of the Company’s customers. The Company has two reportable segments, Clinical Development Services (“Clinical Development Services”) and Laboratory Services (“Laboratory Services”). Unaudited Interim Financial Information and the Use of Estimates The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies it follows for annual financial reporting and are disclosed in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). There have been no significant changes to the Company’s significant accounting policies during the first nine months of 2021. The preparation of financial statements in conformity with U.S. 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. The Company monitors estimates and assumptions on a continuous basis and updates these estimates and assumptions as facts and circumstances change and new information is obtained, including facts and circumstances related to the novel coronavirus disease (“COVID-19”) pandemic. Actual results could differ from those estimates and assumptions due to, among other things, the impacts caused by the COVID-19 pandemic. In the opinion of the Company’s management, these condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full twelve-month period ending December 31, 2021 or any other future period. Therefore, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the 2020 Form 10-K. The information as of December 31, 2020 in the Company’s condensed consolidated balance sheet included herein is derived from the Company’s audited consolidated financial statements included in the 2020 Form 10-K. Merger Agreement On April 15, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Thermo Fisher Scientific Inc., a company organized under the laws of Delaware (“Thermo Fisher”) and Powder Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Thermo Fisher (“Merger Sub”) pursuant to which the Company will be, subject to the terms and conditions of the Merger Agreement, merged with and into Merger Sub, with PPD continuing as the surviving corporation and a wholly owned subsidiary of Thermo Fisher. Under, and subject to, the terms of the Merger Agreement, the Company’s stockholders will have the right to receive $47.50 per share in cash, without interest and less applicable withholding tax, for each share of Company common stock upon the closing of the proposed merger. The board of directors of the Company have unanimously approved the Merger Agreement and the transactions contemplated thereby and stockholders holding in aggregate approximately 60% of the issued and outstanding shares of the Company’s common stock duly executed and delivered to Thermo Fisher a written consent, adopting and approving the Merger Agreement and the transactions contemplated thereby. The consummation of the proposed merger remains subject to the satisfaction or, to the extent permitted by law, waiver of customary closing conditions, including approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and certain other competition and foreign direct investment laws. Subject to such closing conditions, the Company continues to expect the proposed merger to close by the end of 2021. Third-party costs incurred related to the proposed merger during the three and nine months ended September 30, 2021 were $1.9 million and $13.4 million, respectively, and are recorded as a component of selling, general and administrative (“SG&A”) expenses on the condensed consolidated statements of operations. Gain on Investment in Unconsolidated Affiliate During September 2021, one of the Company’s equity method investments, Medable, Inc. (“Medable”), completed a round of financing to raise capital which resulted in a dilution of the Company’s ownership. The net effect of this dilution on the Company’s ownership resulted in a gain of $31.9 million, net of taxes. The gain is recorded as a component of equity in earnings (losses) of unconsolidated affiliates, net of income taxes, on the condensed consolidated statements of operations. The Company continues to have the ability to exercise significant influence from its investment in Medable. See Note 6, “Investments,” of the Company’s 2020 Form 10-K for additional information on the Company’s investments. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Performance Obligations Revenue recognized from performance obligations partially satisfied in prior periods was $65.3 million and $149.3 million for the three and nine months ended September 30, 2021, respectively, and $28.4 million and $82.9 million for the three and nine months ended September 30, 2020, respectively. These cumulative catch-up adjustments primarily relate to contract modifications executed in the relevant period, which resulted in changes to the transaction price, and to a lesser extent, changes in transaction price related to variable consideration and changes in estimates such as estimated total costs. As of September 30, 2021, the aggregate amounts of transaction price allocated to unsatisfied performance obligations with an original contract term of greater than one year was $10.3 billion. The Company expects to recognize 36% to 42% of the transaction price allocated to unsatisfied performance obligations over the next 12 months as services are rendered, with the remainder recognized thereafter during the remaining contract term. The Company does not include the value of the transaction price allocated to unsatisfied performance obligations for contracts that have an original contract term of less than one year, for contracts which are determined to be short-term based on certain termination for convenience provisions or where the right to invoice practical expedient has been applied. Accounts Receivable and Unbilled Services, Net and Unearned Revenue The Company’s accounts receivable and unbilled services, net, consisted of the following amounts on the dates set forth below: (in thousands) September 30, 2021 December 31, 2020 Accounts receivable $ 1,031,077 $ 735,568 Unbilled services 1,047,180 882,078 Total accounts receivable and unbilled services 2,078,257 1,617,646 Allowance for doubtful accounts (6,581) (7,928) Total accounts receivable and unbilled services, net $ 2,071,676 $ 1,609,718 The Company’s unearned revenue consisted of the following amounts on the dates set forth below: (in thousands) September 30, 2021 December 31, 2020 Unearned revenue $ 1,429,817 $ 1,060,544 As of September 30, 2021 and December 31, 2020, contract assets of $215.3 million and $171.2 million, respectively, were included in unbilled services. The changes in the Company’s contract assets and unearned revenue resulted from the timing difference between the Company’s satisfaction of performance obligations under its contracts, achievement of billing milestones and customer payments. Additionally, during the nine months ended September 30, 2021 and 2020, the Company recognized revenue of $757.7 million and $815.4 million, respectively, from the balance of unearned revenue outstanding as of the beginning of each respective year. Impairments of accounts receivable, unbilled services and contract assets were insignificant during the three and nine months ended September 30, 2021 and 2020. Customer Concentration Concentrations of credit risk with respect to accounts receivable and unbilled services, net, are limited due to the Company’s large number of customers. As of September 30, 2021 and December 31, 2020, one customer accounted for approximately 11% and 12%, respectively, of accounts receivable and unbilled services, net. No one customer accounted for greater than 10% of revenues for the three and nine months ended September 30, 2021 or 2020. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill, Net The changes in the carrying amount of goodwill by segment consisted of the following on the dates set forth below: (in thousands) Total Clinical Development Services Laboratory Services Balance at December 31, 2020: Goodwill $ 1,946,919 $ 1,720,305 $ 226,614 Accumulated impairment losses (126,711) (99,432) (27,279) Goodwill, net 1,820,208 1,620,873 199,335 Activity: Translation adjustments (21,839) (21,839) — Balance at September 30, 2021: Goodwill 1,925,080 1,698,466 226,614 Accumulated impairment losses (126,711) (99,432) (27,279) Goodwill, net $ 1,798,369 $ 1,599,034 $ 199,335 Intangible Assets, Net The Company’s definite-lived intangible assets consisted of the following on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Accumulated Amortization Net Carrying Amount Accumulated Amortization Net Customer relationships $ 893,385 $ (513,486) $ 379,899 $ 902,302 $ (479,341) $ 422,961 Trade names 375,156 (177,687) 197,469 378,764 (159,131) 219,633 Backlog 179,686 (179,686) — 181,762 (181,196) 566 Investigator/payer network 240,168 (231,480) 8,688 245,683 (217,963) 27,720 Technology/intellectual property 8,600 (4,934) 3,666 8,600 (4,256) 4,344 Know-how/processes 593,343 (563,316) 30,027 598,922 (525,742) 73,180 Total $ 2,290,338 $ (1,670,589) $ 619,749 $ 2,316,033 $ (1,567,629) $ 748,404 |
Long-term Debt and Finance Leas
Long-term Debt and Finance Lease Obligations | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt and Finance Lease Obligations | Long-term Debt and Finance Lease Obligations Long-term debt and finance lease obligations consisted of the following on the dates set forth below: (dollars in thousands) Maturity Date Effective Rate Stated Rate September 30, 2021 December 31, 2020 New Term Loan January 2028 2.70% 2.50% $ 3,034,750 $ — 2025 Notes June 2025 4.97% 4.63% 500,000 500,000 2028 Notes June 2028 5.24% 5.00% 700,000 700,000 2015 Term Loan (1) August 2022 3.71% 3.50% — 3,064,006 Finance lease obligations Various Various Various 57,297 25,734 4,292,047 4,289,740 Unamortized debt discount (13,756) (4,198) Unamortized debt issuance costs (35,959) (23,112) Current portion of long-term debt and finance lease obligations (34,521) (36,238) Long-term debt and finance lease obligations, less current portion $ 4,207,811 $ 4,226,192 (1) Maturity date, effective rate and stated rate are as of December 31, 2020 for the extinguished 2015 Term Loan. Extinguished 2015 Credit Agreement On August 18, 2015, Jaguar Holding Company II and Pharmaceutical Product Development, LLC entered into a credit agreement (the “2015 Credit Agreement”), as amended, consisting of a $2.575 billion senior secured term loan (the “2015 Term Loan”) issued at 99.5% of face value, or a discount of 0.5%, and a $300.0 million senior secured revolving credit facility (the “2015 Revolving Credit Facility”). In May and November of 2016, the Company amended the 2015 Credit Agreement to increase the borrowings of the 2015 Term Loan by $660.0 million in total. Borrowings under the 2015 Term Loan bore interest at a variable rate based on the London Inter-bank Offered Rate (“LIBOR”) for a specific interest period plus an applicable margin, subject to a Eurocurrency rate floor of 1.00%. The 2015 Term Loan was scheduled to mature on August 18, 2022 and the 2015 Revolving Credit Facility was scheduled to mature on May 15, 2022. On January 13, 2021, the Company extinguished the 2015 Term Loan in accordance with the provisions governing the 2015 Credit Agreement for $3,064.0 million with the proceeds received from the Company’s New Term Loan (as defined below), together with cash on hand. At the same time, the Company also extinguished its then existing 2015 Revolving Credit Facility. The total loss on extinguishment of debt associated with the extinguishments of the 2015 Term Loan and the 2015 Revolving Credit Facility was $10.7 million. As a result, the obligations of the Company under the 2015 Credit Agreement were discharged on that date. New Credit Agreement On January 13, 2021, the Company and its indirect wholly-owned subsidiary, PPD Development, L.P. (the “Co-Borrower”) entered into and closed a new (i) $3,050.0 million aggregate principal amount senior secured first-lien term loan facility (the “New Term Loan”) issued at 99.5% of face value, or a discount of 0.5%, maturing in January 2028 and (ii) $600.0 million committed principal amount senior secured first-lien revolving credit facility (the “New Revolving Credit Facility”) maturing in January 2026 under the credit agreement dated as of January 13, 2021 (the “New Credit Agreement”). Debt issuance costs of $23.0 million, consisting primarily of arrangement fees and professional fees, were deferred in connection with the New Term Loan. Additionally, debt issuance costs of $1.1 million related to professional fees were deferred in connection with the New Revolving Credit Facility. The proceeds from borrowings under the New Term Loan, together with cash on hand, were used to (i) refinance in full the principal amount outstanding and accrued and unpaid interest, fees and other amounts then due and owing under the 2015 Term Loan and (ii) pay fees and expenses relating to the New Credit Agreement. Borrowings under the New Term Loan bear interest at a rate equal to, at the option of the Company, either (a) Adjusted LIBOR (as defined in the New Credit Agreement) plus a margin of 2.00% with an “Adjusted LIBOR floor” of 0.50% or (b) Base Rate (as defined in the New Credit Agreement) plus a margin of 1.00%, with a “Base Rate floor” of 1.50%. Loans under the New Revolving Credit Facility bear interest, at a rate equal to, at the option of the Company either (a) Adjusted LIBOR plus a margin of 1.75% with an “Adjusted LIBOR floor” of 0.00% or (b) Base Rate plus a margin of 0.75% with a “Base Rate floor” of 1.00%. Pricing on each of the New Term Loan and New Revolving Credit Facility included a 25 basis point step-down to the respective interest rate margins for achievement and maintenance of a total net leverage ratio of 3.75:1.00 or lower which was achieved during the quarter ended September 30, 2021. Interest on the New Term Loan was based on Adjusted LIBOR as of September 30, 2021. In addition to paying interest on outstanding principal under the New Revolving Credit Facility, the Company is required to pay a commitment fee, payable quarterly in arrears, of 0.50% per annum on the average daily unused portion of the New Revolving Credit Facility, with step-downs to (i) 0.375% and (ii) 0.25% per annum on such portion upon achievement of a total net leverage ratio equal to or less than (i) 4.75x and (ii) 3.75x, respectively, and an additional 0.125% per annum upon the public announcement that the Company’s corporate credit rating from each of Moody’s and S&P is equal to or better than Ba2 or BB, respectively. The commitment fee shall, however, in no event be less than 0.25% per annum. The commitment fee was set at 0.25% per annum for the quarter ending September 30, 2021. The borrowers must also pay customary letter of credit fees. The borrowers are required, subject to certain exceptions, to pay outstanding loans under the New Term Loan, (i) commencing with the fiscal year ending December 31, 2022, with 50% of excess cash flow, with step-downs upon achievement of certain first lien net leverage ratios, (ii) with 100% of the net cash proceeds of all non-ordinary course asset sales by the Company and its restricted subsidiaries, with step-downs upon achievement of certain first lien net leverage ratios and subject to the Company’s reinvestment right and (iii) with 100% of the net cash proceeds of issuances of debt obligations of the Company and its restricted subsidiaries, other than permitted debt. The borrowers may also voluntarily repay outstanding loans under the New Term Loan and the New Revolving Credit Facility at any time without premium or penalty, except in connection with, or resulting in, any repricing event. In addition, the borrowers may elect to permanently terminate or reduce all or a portion of the revolving credit commitments and the letter of credit sub-limit under the New Revolving Credit Facility at any time without premium or penalty. The borrowers are required to repay installments on the New Term Loan in quarterly principal amounts equal to 0.25% of the original principal amount of the New Term Loan borrowed on the last business day of each calender quarter end, with the balance payable on January 13, 2028. The entire principal amount of revolving loans outstanding (if any) under the New Revolving Credit Facility are due and payable in full at maturity on January 13, 2026, on which day the revolving credit commitments thereunder will terminate. All obligations under the New Credit Agreement are unconditionally guaranteed on a senior basis by, subject to certain exceptions, each existing and subsequently acquired or organized wholly owned restricted subsidiary of the Company organized in the United States and certain other non-U.S. subsidiaries. The obligations of the borrowers under the New Credit Agreement and the guarantees are secured, subject to certain exceptions and excluded assets, by (i) the equity securities of the Co-Borrower and each guarantor, and of each direct, restricted subsidiary of the Company, the Co-Borrower and of each subsidiary guarantor and (ii) security interests in, and mortgages on, substantially all personal property and material owned real property of the Company and each subsidiary guarantor. The New Credit Agreement includes negative covenants limiting the ability of the Company and its restricted subsidiaries to incur indebtedness and liens, sell assets and make restricted payments, including dividends and investments, subject to certain exceptions. In addition, the New Credit Agreement also contains other customary affirmative and negative covenants and customary events of default (with customary grace periods, as applicable). Additionally, certain negative covenants are subject to customary investment grade fall-away provisions if the Company has a public corporate credit/family ratings that is investment grade from Moody’s and S&P (so long as there is no ongoing event of default) and will be reinstated if the rating condition is no longer met. If an event of default occurs the administrative agent shall, at the request of, or may, with the consent of the required lenders, (i) terminate lenders’ commitments under the New Credit Agreement, (ii) declare any outstanding loans under the New Credit Agreement to be immediately due and payable, (iii) require that the Company cash collateralize the letters of credit (“L/C”) obligations and (iv) exercise on behalf of itself, the L/C issuers and the lenders all rights and remedies available to it, the L/C issuers and the lenders under the loan documents or applicable law. From time to time, the Company is required to have L/C issued on its behalf to provide credit support for guarantees, contractual commitments or insurance policies. As of September 30, 2021 and December 31, 2020, the Company had L/C outstanding with an aggregate value of $1.6 million which reduced available borrowings under the New Revolving Credit Facility and 2015 Revolving Credit Facility by such amount. As of September 30, 2021, the Company had available credit under the New Revolving Credit Facility of $598.4 million. The Company did not have any borrowings outstanding under the New Revolving Credit Facility as of or at any time during the three and nine month periods ended September 30, 2021. Debt Covenants and Default Provisions Other than the customary covenants and default provisions related to the New Credit Agreement, there were no changes to the debt covenants or default provisions related to the Company’s other outstanding debt or other obligations during the first nine months of 2021. The Company was in compliance with all covenants for all long-term debt arrangements as of September 30, 2021 and December 31, 2020. For additional information on the Company’s debt arrangements, debt covenants and default provisions, see Note 9, “Long-term Debt and Finance Lease Obligations,” of the Company’s audited consolidated financial statements included in the 2020 Form 10-K. New Finance Lease Agreement In January 2021, the Company entered into a new lease agreement for its existing laboratory facilities in Virginia. The new lease agreement replaced the prior operating lease agreements for certain existing facilities, consolidated multiple operating leases into one new lease agreement and extended the term of the lease for the facilities. The new finance lease totaling $26.3 million was recorded as a component of property and equipment, net, and current and long-term debt and finance lease obligations on the condensed consolidated balance sheets. Scheduled Maturities of Long-term Debt and Finance Lease Obligations As of September 30, 2021, the scheduled maturities of long-term debt and settlement of finance lease obligations for the remainder of 2021, each of the next five years and thereafter were as follows (in thousands): Year Amount 2021 (remaining three months) $ 8,597 2022 34,910 2023 34,581 2024 34,615 2025 534,720 2026 35,135 Thereafter 3,609,489 Total $ 4,292,047 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective income tax rate was 22.0% and 50.0% for the three months ended September 30, 2021 and 2020, respectively, and 24.9% and 24.5% for the nine months ended September 30, 2021 and 2020, respectively. The Company’s provision for income taxes for the three months ended September 30, 2021 and the nine months ended September 30, 2021 and 2020 was primarily due to the estimated tax effect on the Company’s pre-tax income. The Company’s provision for income taxes for the three months ended September 30, 2020 was primarily due to the estimated tax on the Company’s distribution of pre-tax income among domestic and foreign jurisdictions and the impact of statutory rate changes in the United Kingdom. As of September 30, 2021 and December 31, 2020, the Company’s total unrecognized tax benefits were $23.9 million and $21.3 million, respectively. Included in the balance of unrecognized tax benefits as of September 30, 2021 and December 31, 2020, were $17.1 million and $14.9 million, respectively, net of the federal benefit for state taxes that, if recognized, would reduce the Company’s effective tax rate. In addition, the Company believes that it is reasonably possible that the total amount of unrecognized tax benefits could decrease by up to $8.1 million within the next 12 months due to the filing of amended returns, settlement of audits and the expiration of the statutes of limitations. The Company has analyzed its filing positions in all significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. The significant jurisdictions with periods subject to examination where the Company does business are the 2017 through 2020 tax years for the United States and the United Kingdom. Various U.S., foreign and state income tax returns are under examination by taxing authorities. The Company does not believe that the outcome of any examination will have a material impact on its results of operations, financial condition and/or cash flows. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging ActivitiesThe Company has variable rate borrowings under its New Term Loan, and as a result, is exposed to interest rate fluctuations on these borrowings. From time to time, the Company enters into interest rate swaps to mitigate the risk in fluctuations in interest rates. For hedges that qualify, the Company accounts for these interest rate swaps as cash flow hedges because their purpose is to hedge the Company’s exposure to increases in interest rates on its variable rate borrowings and as the interest rate swaps effectively convert variable rate borrowings to fixed rate borrowings based on the fixed interest rate for the interest rate swaps plus the applicable margin on the New Term Loan. For those designated interest rate swaps accounted for as cash flow hedges, the Company recognizes in accumulated other comprehensive loss (“AOCL”) or accumulated other comprehensive income (“AOCI”), net of tax, any changes in the fair value, representing unrealized gains or losses, of its interest rate swaps. The Company assesses effectiveness at inception and on an ongoing quarterly basis. The Company may also enter into interest rate swap agreements that are not designated as cash flow hedges for accounting purposes. Changes in the fair value of interest rate swaps not designated as cash flow hedges are reported in the statements of operations as part of other income (expense), net. The Company does not use derivative financial instruments for speculative or trading purposes and does not offset the fair value amounts of its derivatives. Current market conditions, including dislocation in the financial markets and volatility in interest rates, may affect the performance of the Company’s hedging relationships for cash flow hedges, which could cause the hedges to no longer be effective. The following table summarizes the material terms of the interest rate swaps outstanding as of September 30, 2021 (dollars in thousands): Swap # Terms Notional Amount Fixed Interest Rate Maturity Date Designated/Undesignated 1 Variable to fixed $ 1,500,000 1.19% March 31, 2025 Designated 2 Variable to fixed 1,428,000 1.22% March 31, 2025 Designated 3 Variable to fixed 72,000 1.22% March 31, 2025 Undesignated 4 Variable to fixed 500,000 1.17% March 31, 2025 Undesignated 5 Fixed to variable 500,000 0.52% March 31, 2025 Undesignated During the three months ended September 30, 2021 and 2020, the Company recorded a loss of $0.1 million and a gain of $0.4 million, respectively, in other income (expense), net, from the settlement and change in the fair value of the undesignated interest rate swaps. During the nine months ended September 30, 2021 and 2020, the Company recorded a gain of $0.6 million and a loss of $1.5 million, respectively, in other income (expense), net, from the settlement and change in the fair value of the undesignated interest rate swaps. The Company expects to reclassify current unrealized losses of $32.6 million within the next 12 months from AOCL to interest expense, net, on the condensed consolidated statements of operations as interest payments are made on the New Term Loan. The Company recognized the following amounts of pre-tax (loss) gain as a component of other comprehensive income (“OCI”) or other comprehensive loss (“OCL”) during the three and nine months ended September 30, 2021 and 2020: (in thousands) Pre-Tax (Loss) Gain Recognized in OCI or OCL Derivatives in Cash Flow Hedging Relationships Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest rate swaps $ (1,174) $ (4,364) $ 29,421 $ (142,709) The following table provides the location of the pre-tax loss reclassified from AOCL into the condensed consolidated statements of operations for the periods indicated below: Pre-Tax Loss Reclassified from AOCL into Statements of Operations (in thousands) Location of Loss Reclassified from AOCL into Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest rate swaps Interest expense, net $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest rate swaps Other income (expense), net — (163) — (9,904) The fair value of derivative instruments consisted of the following balances on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Balance sheet location Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Interest rate swaps Other accrued expenses $ — $ 31,635 $ — $ 32,188 Interest rate swaps Other liabilities — 18,447 — 74,286 Derivatives not designated as hedging instruments: Interest rate swaps Prepaid expenses and other current assets 1,942 — 1,901 — Interest rate swaps Other assets — — 1,667 — Interest rate swaps Other accrued expenses — 6,011 — 5,184 Interest rate swaps Other liabilities — 8,355 — 11,893 $ 1,942 $ 64,448 $ 3,568 $ 123,551 The Company considers the fair value of interest rate swap assets and liabilities to be a Level 2 classification within the fair value hierarchy. See Note 8, “Fair Value Measurements,” for additional information. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company records liabilities for pending and threatened litigation matters when an adverse outcome is probable and the amount of the potential liability can be reasonably estimated. The Company reviews claims and legal proceedings on a continuous basis and records or adjusts liabilities recorded for such matters based on updated facts and circumstances including settlements or offers to settle, judicial rulings, advice of counsel or other information pertinent to a particular matter. Legal costs associated with contingencies are charged to expense as incurred. In the ordinary course of business, the Company periodically becomes involved in a variety of pending and threatened proceedings and claims, including investigations, disputes, litigations and regulatory matters. These actions may be threatened or commenced by various parties, including customers, current or former employees, vendors, government agencies, including tax authorities, or others. Based on the latest information available, the Company does not expect that any pending or threatened proceeding, claim or investigation, dispute, litigation or regulatory matter, either individually or in the aggregate, will have a material adverse effect on the business, financial position, results of operations and/or cash flows of the Company. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company records certain assets and liabilities at fair value on a recurring and nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy that gives highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest level to unobservable inputs. The inputs used to measure fair value are classified into the following fair value hierarchy: • Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement date. • Level 2 - Observable inputs other than quoted prices in Level 1, including (i) quoted prices for similar assets and liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active and (iii) observable inputs for the assets or liabilities other than quoted market prices. • Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes assets and liabilities determined using pricing models, discounted cash flow methodologies or similar techniques reflecting the Company’s own assumptions. Recurring Fair Value Measurements The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands): As of September 30, 2021 Level 1 Level 2 Level 3 Total Assets Investments $ 1,222 $ — $ 240,260 $ 241,482 Derivative instruments — 1,942 — 1,942 Total assets $ 1,222 $ 1,942 $ 240,260 $ 243,424 Liabilities Derivative instruments $ — $ 64,448 $ — $ 64,448 Recapitalization investment portfolio liability — — 169,734 169,734 Total liabilities $ — $ 64,448 $ 169,734 $ 234,182 As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets Investments $ 1,307 $ — $ 264,587 $ 265,894 Derivative instruments — 3,568 — 3,568 Total assets $ 1,307 $ 3,568 $ 264,587 $ 269,462 Liabilities Derivative Instruments $ — $ 123,551 $ — $ 123,551 Recapitalization investment portfolio liability — — 204,742 204,742 Total liabilities $ — $ 123,551 $ 204,742 $ 328,293 Fair Value Investments The following table summarizes the Company’s quantitative information about the fair value measurements of Auven Therapeutics Holdings, L.P. (“Auven”) and venBio Global Strategic Fund, L.P. (“venBio”) on the dates set forth below (dollars in thousands): Quantitative Information About Level 3 Fair Value Measurements for September 30, 2021 Description Fair Value Valuation Technique Unobservable Input Range of Rates Fair value option investments $224,314 Market evaluation/pricing models Discount for lack of marketability 20.0% - 32.5% Recent acquisition transactions Discount for lack of control 20.0% - 35.0% Quantitative Information About Level 3 Fair Value Measurements for December 31, 2020 Description Fair Value Valuation Technique Unobservable Input Range of Rates Fair value option investments $253,801 Market evaluation/pricing models Discount for lack of marketability 12.5% - 32.5% Recent acquisition transactions Discount for lack of control 20.0% - 35.0% See Note 6, “Investments,” of the Company’s audited consolidated financial statements included in the 2020 Form 10-K for additional information on the Company’s investments. Changes in fair value of the Company’s investments measured on a recurring basis using significant unobservable inputs (Level 3) for the respective periods were as follows: (in thousands) 2021 2020 Balance as of January 1, $ 264,587 $ 248,453 Recognized fair value (loss) gain (28,042) 16,296 Cash distributions received (112) (19,704) Capital contributions paid 3,827 5,382 Balance as of September 30, $ 240,260 $ 250,427 Recapitalization Investment Portfolio Liability Changes in fair value of the recapitalization investment portfolio liability measured on a recurring basis using significant unobservable inputs (Level 3) for the respective periods were as follows: (in thousands) 2021 2020 Balance as of January 1, $ 204,742 $ 191,678 Recapitalization investment portfolio consideration change in value (22,189) 6,529 Cash distributions paid (12,819) — Balance as of September 30, $ 169,734 $ 198,207 Fair Value of Financial Instruments The Company estimated the fair value of its financial instruments using available market information. The estimate of fair value has been determined based on the fair value hierarchy for U.S. GAAP. The carrying amounts for cash and cash equivalents, accounts receivable and unbilled services, net, accounts payable and unearned revenue approximate their fair values due to the short-term nature of these financial instruments. The following table presents information about the carrying value and estimated fair value of the Company’s financial instruments on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value New Term Loan $ 3,034,750 $ 3,030,957 $ — $ — 2025 Notes 500,000 521,875 500,000 527,645 2028 Notes 700,000 753,375 700,000 754,257 2015 Term Loan — — 3,064,006 3,067,652 The estimated fair value of the New Term Loan, 2025 Notes and 2028 Notes is based on recently reported market transactions and prices for identical or similar financial instruments obtained from a third-party pricing source. The Company considers the fair value of the New Term Loan, 2025 Notes and the 2028 Notes to be within the Level 2 classification of the fair value hierarchy. The estimated fair value of the Company’s previously outstanding 2015 Term Loan was determined in the same manner as the New Term Loan. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The balances of AOCL, net of tax, were as follows for the three and nine months ended September 30, 2021 and 2020: (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of June 30, 2021 $ (200,340) $ (44,495) $ (3,126) $ (247,961) OCL before reclassifications (54,083) (884) — (54,967) Amounts reclassified from AOCL — 6,432 179 6,611 Net (OCL) or OCI (54,083) 5,548 179 (48,356) Balance as of September 30, 2021 $ (254,423) $ (38,947) $ (2,947) $ (296,317) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of December 31, 2020 $ (201,426) $ (79,922) $ (3,497) $ (284,845) (OCL) or OCI before reclassifications (52,997) 22,124 — (30,873) Amounts reclassified from AOCL — 18,851 550 19,401 Net (OCL) or OCI (52,997) 40,975 550 (11,472) Balance as of September 30, 2021 $ (254,423) $ (38,947) $ (2,947) $ (296,317) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of June 30, 2020 $ (359,246) $ (88,929) $ (776) $ (448,951) OCI or (OCL) before reclassifications 45,602 (3,073) — 42,529 Amounts reclassified from AOCL — 3,576 138 3,714 Net OCI 45,602 503 138 46,243 Balance as of September 30, 2020 $ (313,644) $ (88,426) $ (638) $ (402,708) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of December 31, 2019 $ (306,452) $ 8,566 $ (1,018) $ (298,904) OCL before reclassifications (7,192) (107,546) (22) (114,760) Amounts reclassified from AOCI or AOCL — 10,554 402 10,956 Net (OCL) or OCI (7,192) (96,992) 380 (103,804) Balance as of September 30, 2020 $ (313,644) $ (88,426) $ (638) $ (402,708) The following table presents the significant reclassifications to the condensed consolidated statements of operations out of AOCL or AOCI and the line item affected on the condensed consolidated statements of operations for the respective periods were as follows: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Details about AOCL or AOCI Components 2021 2020 2021 2020 Affected line item in statements of operations Losses on derivative instruments: Interest rate swaps $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest expense, net Interest rate swaps — (163) — (9,904) Other income (expense), net Income tax benefit 2,102 1,588 6,179 3,863 Provision for income taxes Total net of income tax $ (6,432) $ (3,576) $ (18,851) $ (10,554) Defined benefit plan: Amortization of actuarial loss $ (220) $ (166) $ (678) $ (487) Other income (expense), net Income tax benefit 41 28 128 85 Provision for income taxes Total net of income tax $ (179) $ (138) $ (550) $ (402) |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Majority Sponsors Transactions The Company’s majority sponsors include the Carlyle Group Inc. (“Carlyle”) and Hellman & Friedman LLC (“H&F”). Affiliates of Carlyle had investments in the 2015 Term Loan totaling $12.6 million as of December 31, 2020 and no investments in the New Term Loan as of September 30, 2021. The amounts paid to the relevant affiliates for those loans for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Interest paid $ — $ 114 $ 1,174 $ 1,511 Principal paid — 33 12,853 408 Recapitalization investment portfolio distributions made to affiliates of Carlyle and affiliates of H&F during the nine months ended September 30, 2021 were $11.8 million. There were no such payments made during the three months ended September 30, 2021 or the three and nine months ended September 30, 2020. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Company’s audited consolidated financial statements included in the 2020 Form 10-K for additional information related to the recapitalization investment portfolio liability. SNBL Transactions The Company owns 60% of its consolidated subsidiary PPD-SNBL K.K. (“PPD-SNBL”). The 40% ownership interest held by Shin Nippon Biomedical Laboratories Ltd. (“SNBL”) is classified as a redeemable noncontrolling interest on the condensed consolidated balance sheets due to certain put options, one of which is triggered by a change in control of the Company, under which SNBL may require the Company to purchase SNBL’s remaining ownership interest at fair value upon the occurrence of certain events described in the PPD-SNBL shareholders agreement. As of September 30, 2021, no such events had occurred. Upon closing of the proposed merger with Thermo Fisher and for a period of one year thereafter, SNBL will have the right, but not the obligation, to exercise its put option to sell its 40% ownership interest in PPD-SNBL to the Company. Both the Company and SNBL have service agreements to provide administrative and support services to PPD-SNBL, both of which will remain in effect as long as the PPD-SNBL shareholders agreement remains in effect. The Company and SNBL also have a collaboration agreement under which the parties may collaborate on various drug development services. This collaboration agreement will remain in effect as long as SNBL owns at least 20% of PPD-SNBL. For the three months ended September 30, 2021 and 2020, the Company incurred expenses for services rendered under the services agreement of $0.3 million and $0.2 million, respectively. For each of the nine months ended September 30, 2021 and 2020, the Company incurred expenses under the services agreement of $0.8 million. The expenses are recorded as a component of SG&A expenses on the condensed consolidated statements of operations. Additionally, as of September 30, 2021, the Company owed SNBL $0.3 million for services rendered under the services agreement. No such amount was owed to SNBL as of December 31, 2020. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table provides a reconciliation of the numerator and denominator of the basic and diluted earnings per share (“EPS”) computations for the periods set forth below: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net income $ 169,115 $ 9,102 $ 267,915 $ 58,093 Net income attributable to noncontrolling interest (2,044) (1,587) (3,955) (4,499) Recapitalization investment portfolio consideration (14,150) 44,468 22,189 (6,529) Net income attributable to common stockholders of PPD, Inc. $ 152,921 $ 51,983 $ 286,149 $ 47,065 Denominator: Basic weighted-average common shares outstanding 351,351 348,672 350,974 338,277 Effect of dilutive stock options and share awards 8,187 6,158 7,852 4,882 Diluted weighted-average common shares outstanding 359,538 354,830 358,826 343,159 Earnings per share: Basic $ 0.44 $ 0.15 $ 0.82 $ 0.14 Diluted $ 0.43 $ 0.15 $ 0.80 $ 0.14 See Note 4, “Stockholders’ Deficit and Redeemable Noncontrolling Interest,” and Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Company’s audited consolidated financial statements included in the 2020 Form 10-K for additional information related to shares and the recapitalization investment portfolio consideration. The Company does not include potentially dilutive shares in the calculation of diluted weighted-average number of common shares outstanding in cases where the inclusion of such additional shares would be anti-dilutive. Potential common shares related to time-based and vested performance-based stock options and unvested restricted stock units may be determined to be anti-dilutive based on the application of the treasury stock method and are also anti-dilutive in periods when there is a net loss attributable to common stockholders of PPD, Inc. The number of potential common shares outstanding that were considered anti-dilutive using the treasury stock method and therefore excluded from the computation of diluted EPS, weighted for the portion of the period they were outstanding, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Anti-dilutive equity awards 2,256 320 2,106 469 At September 30, 2021, unvested (i) performance-based options, (ii) performance stock units and (iii) liquidity/realization options totaling 5.2 million potential shares were outstanding but excluded from the calculation of diluted EPS, as these shares are contingently issuable based on the Company’s actual or expected achievement of performance factors or certain market conditions. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company is managed through two reportable segments, Clinical Development Services and Laboratory Services. The Company determines reportable segments using the management approach. The management approach is based on how the Company’s chief operating decision maker (“CODM”) organizes the segments for purposes of assessing performance and making operating decisions. The Clinical Development Services segment provides a wide range of services to its customers including early development/Phase I, patient recruitment and enrollment, investigator site management, Phase II-IV clinical trial management, medical communications and various peri- and post-approval services. The Laboratory Services segment provides comprehensive services to its customers including bioanalytical, vaccine sciences, good manufacturing practice, central lab and biomarker testing. Both segments provide services to pharmaceutical, biotechnology, medical device, government organizations and other industry participants. The Company’s CODM assesses segment performance and makes resource allocation decisions based on segment revenues and segment operating income. The CODM reviews the Company’s assets on a consolidated basis and does not assess performance or make operating decisions based on segment assets. Information on reportable segment revenue and segment operating income, including a reconciliation of segment operating income to consolidated income from operations, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Segment revenue: Clinical Development Services $ 1,270,613 $ 1,008,639 $ 3,688,200 $ 2,694,775 Laboratory Services 290,183 225,163 826,448 622,407 Total segment revenue 1,560,796 1,233,802 4,514,648 3,317,182 Segment direct costs: Clinical Development Services 397,416 330,281 1,130,521 922,737 Laboratory Services 129,785 102,355 368,741 279,154 Total segment direct costs 527,201 432,636 1,499,262 1,201,891 Segment reimbursed costs: Clinical Development Services 399,687 309,117 1,229,773 730,872 Laboratory Services 33,671 26,749 100,931 79,651 Total segment reimbursed costs 433,358 335,866 1,330,704 810,523 Segment SG&A expenses: Clinical Development Services 206,644 137,984 574,069 415,334 Laboratory Services 31,217 23,283 88,651 66,929 Total segment SG&A expenses 237,861 161,267 662,720 482,263 Segment operating income: Clinical Development Services 266,866 231,257 753,837 625,832 Laboratory Services 95,510 72,776 268,125 196,673 Total segment operating income 362,376 304,033 1,021,962 822,505 Operating costs and expenses not allocated to segments: Direct costs 2,489 786 8,248 20,809 SG&A expenses 97,763 88,053 296,867 252,449 Depreciation and amortization 74,028 71,317 227,426 206,395 Long-lived asset impairment — 1,414 1,584 1,414 Income from operations $ 188,096 $ 142,463 $ 487,837 $ 341,438 The table below presents certain entity-wide information about the Company’s operations by geographic location. The Company allocates revenues to geographic locations based on where the services are performed. Total revenues by geographic location for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Revenue: North America $ 977,628 $ 737,234 $ 2,766,477 $ 1,869,533 Latin America 41,220 39,589 135,236 130,210 Europe, Middle East and Africa 396,285 331,996 1,170,669 965,606 Asia-Pacific 145,663 124,983 442,266 351,833 Revenue $ 1,560,796 $ 1,233,802 $ 4,514,648 $ 3,317,182 |
Entity-wide Information by Geog
Entity-wide Information by Geographic Location | 9 Months Ended |
Sep. 30, 2021 | |
Segments, Geographical Areas [Abstract] | |
Entity-wide Information by Geographic Location | Segments The Company is managed through two reportable segments, Clinical Development Services and Laboratory Services. The Company determines reportable segments using the management approach. The management approach is based on how the Company’s chief operating decision maker (“CODM”) organizes the segments for purposes of assessing performance and making operating decisions. The Clinical Development Services segment provides a wide range of services to its customers including early development/Phase I, patient recruitment and enrollment, investigator site management, Phase II-IV clinical trial management, medical communications and various peri- and post-approval services. The Laboratory Services segment provides comprehensive services to its customers including bioanalytical, vaccine sciences, good manufacturing practice, central lab and biomarker testing. Both segments provide services to pharmaceutical, biotechnology, medical device, government organizations and other industry participants. The Company’s CODM assesses segment performance and makes resource allocation decisions based on segment revenues and segment operating income. The CODM reviews the Company’s assets on a consolidated basis and does not assess performance or make operating decisions based on segment assets. Information on reportable segment revenue and segment operating income, including a reconciliation of segment operating income to consolidated income from operations, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Segment revenue: Clinical Development Services $ 1,270,613 $ 1,008,639 $ 3,688,200 $ 2,694,775 Laboratory Services 290,183 225,163 826,448 622,407 Total segment revenue 1,560,796 1,233,802 4,514,648 3,317,182 Segment direct costs: Clinical Development Services 397,416 330,281 1,130,521 922,737 Laboratory Services 129,785 102,355 368,741 279,154 Total segment direct costs 527,201 432,636 1,499,262 1,201,891 Segment reimbursed costs: Clinical Development Services 399,687 309,117 1,229,773 730,872 Laboratory Services 33,671 26,749 100,931 79,651 Total segment reimbursed costs 433,358 335,866 1,330,704 810,523 Segment SG&A expenses: Clinical Development Services 206,644 137,984 574,069 415,334 Laboratory Services 31,217 23,283 88,651 66,929 Total segment SG&A expenses 237,861 161,267 662,720 482,263 Segment operating income: Clinical Development Services 266,866 231,257 753,837 625,832 Laboratory Services 95,510 72,776 268,125 196,673 Total segment operating income 362,376 304,033 1,021,962 822,505 Operating costs and expenses not allocated to segments: Direct costs 2,489 786 8,248 20,809 SG&A expenses 97,763 88,053 296,867 252,449 Depreciation and amortization 74,028 71,317 227,426 206,395 Long-lived asset impairment — 1,414 1,584 1,414 Income from operations $ 188,096 $ 142,463 $ 487,837 $ 341,438 The table below presents certain entity-wide information about the Company’s operations by geographic location. The Company allocates revenues to geographic locations based on where the services are performed. Total revenues by geographic location for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Revenue: North America $ 977,628 $ 737,234 $ 2,766,477 $ 1,869,533 Latin America 41,220 39,589 135,236 130,210 Europe, Middle East and Africa 396,285 331,996 1,170,669 965,606 Asia-Pacific 145,663 124,983 442,266 351,833 Revenue $ 1,560,796 $ 1,233,802 $ 4,514,648 $ 3,317,182 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | Other Income (Expense), Net The components of other income (expense), net, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Other income (expense), net: Foreign currency gains (losses), net $ 20,773 $ (17,509) $ 16,008 $ (3,055) Interest rate swap (losses) gains (69) 209 598 (11,398) Other income 351 365 1,029 954 Other expense (33) (218) (243) (598) Total other income (expense), net $ 21,022 $ (17,153) $ 17,392 $ (14,097) |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited Interim Financial Information | The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting. The significant accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies it follows for annual financial reporting and are disclosed in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies,” of the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). There have been no significant changes to the Company’s significant accounting policies during the first nine months of 2021. |
Use of Estimates | The preparation of financial statements in conformity with U.S. 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. The Company monitors estimates and assumptions on a continuous basis and updates these estimates and assumptions as facts and circumstances change and new information is obtained, including facts and circumstances related to the novel coronavirus disease (“COVID-19”) pandemic. Actual results could differ from those estimates and assumptions due to, among other things, the impacts caused by the COVID-19 pandemic. |
Derivative Instruments and Hedging Activities | The Company has variable rate borrowings under its New Term Loan, and as a result, is exposed to interest rate fluctuations on these borrowings. From time to time, the Company enters into interest rate swaps to mitigate the risk in fluctuations in interest rates. For hedges that qualify, the Company accounts for these interest rate swaps as cash flow hedges because their purpose is to hedge the Company’s exposure to increases in interest rates on its variable rate borrowings and as the interest rate swaps effectively convert variable rate borrowings to fixed rate borrowings based on the fixed interest rate for the interest rate swaps plus the applicable margin on the New Term Loan. For those designated interest rate swaps accounted for as cash flow hedges, the Company recognizes in accumulated other comprehensive loss (“AOCL”) or accumulated other comprehensive income (“AOCI”), net of tax, any changes in the fair value, representing unrealized gains or losses, of its interest rate swaps. The Company assesses effectiveness at inception and on an ongoing quarterly basis. The Company may also enter into interest rate swap agreements that are not designated as cash flow hedges for accounting purposes. Changes in the fair value of interest rate swaps not designated as cash flow hedges are reported in the statements of operations as part of other income (expense), net. The Company does not use derivative financial instruments for speculative or trading purposes and does not offset the fair value amounts of its derivatives. Current market conditions, including dislocation in the financial markets and volatility in interest rates, may affect the performance of the Company’s hedging relationships for cash flow hedges, which could cause the hedges to no longer be effective. |
Commitments and Contingencies | The Company records liabilities for pending and threatened litigation matters when an adverse outcome is probable and the amount of the potential liability can be reasonably estimated. The Company reviews claims and legal proceedings on a continuous basis and records or adjusts liabilities recorded for such matters based on updated facts and circumstances including settlements or offers to settle, judicial rulings, advice of counsel or other information pertinent to a particular matter. Legal costs associated with contingencies are charged to expense as incurred. |
Fair Value Measurements | The Company records certain assets and liabilities at fair value on a recurring and nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a fair value hierarchy that gives highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest level to unobservable inputs. The inputs used to measure fair value are classified into the following fair value hierarchy: • Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement date. • Level 2 - Observable inputs other than quoted prices in Level 1, including (i) quoted prices for similar assets and liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active and (iii) observable inputs for the assets or liabilities other than quoted market prices. • Level 3 - Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. This includes assets and liabilities determined using pricing models, discounted cash flow methodologies or similar techniques reflecting the Company’s own assumptions. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Accounts Receivable and Unbilled Services | The Company’s accounts receivable and unbilled services, net, consisted of the following amounts on the dates set forth below: (in thousands) September 30, 2021 December 31, 2020 Accounts receivable $ 1,031,077 $ 735,568 Unbilled services 1,047,180 882,078 Total accounts receivable and unbilled services 2,078,257 1,617,646 Allowance for doubtful accounts (6,581) (7,928) Total accounts receivable and unbilled services, net $ 2,071,676 $ 1,609,718 |
Contract with Customer, Asset and Liability | The Company’s unearned revenue consisted of the following amounts on the dates set forth below: (in thousands) September 30, 2021 December 31, 2020 Unearned revenue $ 1,429,817 $ 1,060,544 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by segment consisted of the following on the dates set forth below: (in thousands) Total Clinical Development Services Laboratory Services Balance at December 31, 2020: Goodwill $ 1,946,919 $ 1,720,305 $ 226,614 Accumulated impairment losses (126,711) (99,432) (27,279) Goodwill, net 1,820,208 1,620,873 199,335 Activity: Translation adjustments (21,839) (21,839) — Balance at September 30, 2021: Goodwill 1,925,080 1,698,466 226,614 Accumulated impairment losses (126,711) (99,432) (27,279) Goodwill, net $ 1,798,369 $ 1,599,034 $ 199,335 |
Schedule of Definite-Lived Intangible Assets | The Company’s definite-lived intangible assets consisted of the following on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Accumulated Amortization Net Carrying Amount Accumulated Amortization Net Customer relationships $ 893,385 $ (513,486) $ 379,899 $ 902,302 $ (479,341) $ 422,961 Trade names 375,156 (177,687) 197,469 378,764 (159,131) 219,633 Backlog 179,686 (179,686) — 181,762 (181,196) 566 Investigator/payer network 240,168 (231,480) 8,688 245,683 (217,963) 27,720 Technology/intellectual property 8,600 (4,934) 3,666 8,600 (4,256) 4,344 Know-how/processes 593,343 (563,316) 30,027 598,922 (525,742) 73,180 Total $ 2,290,338 $ (1,670,589) $ 619,749 $ 2,316,033 $ (1,567,629) $ 748,404 |
Long-term Debt and Finance Le_2
Long-term Debt and Finance Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt and Finance Lease Obligations | Long-term debt and finance lease obligations consisted of the following on the dates set forth below: (dollars in thousands) Maturity Date Effective Rate Stated Rate September 30, 2021 December 31, 2020 New Term Loan January 2028 2.70% 2.50% $ 3,034,750 $ — 2025 Notes June 2025 4.97% 4.63% 500,000 500,000 2028 Notes June 2028 5.24% 5.00% 700,000 700,000 2015 Term Loan (1) August 2022 3.71% 3.50% — 3,064,006 Finance lease obligations Various Various Various 57,297 25,734 4,292,047 4,289,740 Unamortized debt discount (13,756) (4,198) Unamortized debt issuance costs (35,959) (23,112) Current portion of long-term debt and finance lease obligations (34,521) (36,238) Long-term debt and finance lease obligations, less current portion $ 4,207,811 $ 4,226,192 (1) Maturity date, effective rate and stated rate are as of December 31, 2020 for the extinguished 2015 Term Loan. |
Scheduled Maturities of Long-term Debt and Finance Lease Obligations | As of September 30, 2021, the scheduled maturities of long-term debt and settlement of finance lease obligations for the remainder of 2021, each of the next five years and thereafter were as follows (in thousands): Year Amount 2021 (remaining three months) $ 8,597 2022 34,910 2023 34,581 2024 34,615 2025 534,720 2026 35,135 Thereafter 3,609,489 Total $ 4,292,047 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following table summarizes the material terms of the interest rate swaps outstanding as of September 30, 2021 (dollars in thousands): Swap # Terms Notional Amount Fixed Interest Rate Maturity Date Designated/Undesignated 1 Variable to fixed $ 1,500,000 1.19% March 31, 2025 Designated 2 Variable to fixed 1,428,000 1.22% March 31, 2025 Designated 3 Variable to fixed 72,000 1.22% March 31, 2025 Undesignated 4 Variable to fixed 500,000 1.17% March 31, 2025 Undesignated 5 Fixed to variable 500,000 0.52% March 31, 2025 Undesignated |
Derivative Instruments, Gain (Loss) | The Company recognized the following amounts of pre-tax (loss) gain as a component of other comprehensive income (“OCI”) or other comprehensive loss (“OCL”) during the three and nine months ended September 30, 2021 and 2020: (in thousands) Pre-Tax (Loss) Gain Recognized in OCI or OCL Derivatives in Cash Flow Hedging Relationships Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest rate swaps $ (1,174) $ (4,364) $ 29,421 $ (142,709) |
Reclassification out of Accumulated Other Comprehensive Income | The following table provides the location of the pre-tax loss reclassified from AOCL into the condensed consolidated statements of operations for the periods indicated below: Pre-Tax Loss Reclassified from AOCL into Statements of Operations (in thousands) Location of Loss Reclassified from AOCL into Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest rate swaps Interest expense, net $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest rate swaps Other income (expense), net — (163) — (9,904) The following table presents the significant reclassifications to the condensed consolidated statements of operations out of AOCL or AOCI and the line item affected on the condensed consolidated statements of operations for the respective periods were as follows: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Details about AOCL or AOCI Components 2021 2020 2021 2020 Affected line item in statements of operations Losses on derivative instruments: Interest rate swaps $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest expense, net Interest rate swaps — (163) — (9,904) Other income (expense), net Income tax benefit 2,102 1,588 6,179 3,863 Provision for income taxes Total net of income tax $ (6,432) $ (3,576) $ (18,851) $ (10,554) Defined benefit plan: Amortization of actuarial loss $ (220) $ (166) $ (678) $ (487) Other income (expense), net Income tax benefit 41 28 128 85 Provision for income taxes Total net of income tax $ (179) $ (138) $ (550) $ (402) |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments consisted of the following balances on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Balance sheet location Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Interest rate swaps Other accrued expenses $ — $ 31,635 $ — $ 32,188 Interest rate swaps Other liabilities — 18,447 — 74,286 Derivatives not designated as hedging instruments: Interest rate swaps Prepaid expenses and other current assets 1,942 — 1,901 — Interest rate swaps Other assets — — 1,667 — Interest rate swaps Other accrued expenses — 6,011 — 5,184 Interest rate swaps Other liabilities — 8,355 — 11,893 $ 1,942 $ 64,448 $ 3,568 $ 123,551 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liability Measured at Fair Value | The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands): As of September 30, 2021 Level 1 Level 2 Level 3 Total Assets Investments $ 1,222 $ — $ 240,260 $ 241,482 Derivative instruments — 1,942 — 1,942 Total assets $ 1,222 $ 1,942 $ 240,260 $ 243,424 Liabilities Derivative instruments $ — $ 64,448 $ — $ 64,448 Recapitalization investment portfolio liability — — 169,734 169,734 Total liabilities $ — $ 64,448 $ 169,734 $ 234,182 As of December 31, 2020 Level 1 Level 2 Level 3 Total Assets Investments $ 1,307 $ — $ 264,587 $ 265,894 Derivative instruments — 3,568 — 3,568 Total assets $ 1,307 $ 3,568 $ 264,587 $ 269,462 Liabilities Derivative Instruments $ — $ 123,551 $ — $ 123,551 Recapitalization investment portfolio liability — — 204,742 204,742 Total liabilities $ — $ 123,551 $ 204,742 $ 328,293 |
Fair Value Measurement Inputs and Valuation Techniques | The following table summarizes the Company’s quantitative information about the fair value measurements of Auven Therapeutics Holdings, L.P. (“Auven”) and venBio Global Strategic Fund, L.P. (“venBio”) on the dates set forth below (dollars in thousands): Quantitative Information About Level 3 Fair Value Measurements for September 30, 2021 Description Fair Value Valuation Technique Unobservable Input Range of Rates Fair value option investments $224,314 Market evaluation/pricing models Discount for lack of marketability 20.0% - 32.5% Recent acquisition transactions Discount for lack of control 20.0% - 35.0% Quantitative Information About Level 3 Fair Value Measurements for December 31, 2020 Description Fair Value Valuation Technique Unobservable Input Range of Rates Fair value option investments $253,801 Market evaluation/pricing models Discount for lack of marketability 12.5% - 32.5% Recent acquisition transactions Discount for lack of control 20.0% - 35.0% |
Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in fair value of the Company’s investments measured on a recurring basis using significant unobservable inputs (Level 3) for the respective periods were as follows: (in thousands) 2021 2020 Balance as of January 1, $ 264,587 $ 248,453 Recognized fair value (loss) gain (28,042) 16,296 Cash distributions received (112) (19,704) Capital contributions paid 3,827 5,382 Balance as of September 30, $ 240,260 $ 250,427 |
Fair Value Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in fair value of the recapitalization investment portfolio liability measured on a recurring basis using significant unobservable inputs (Level 3) for the respective periods were as follows: (in thousands) 2021 2020 Balance as of January 1, $ 204,742 $ 191,678 Recapitalization investment portfolio consideration change in value (22,189) 6,529 Cash distributions paid (12,819) — Balance as of September 30, $ 169,734 $ 198,207 |
Fair Value by Balance Sheet Grouping | The following table presents information about the carrying value and estimated fair value of the Company’s financial instruments on the dates set forth below: September 30, 2021 December 31, 2020 (in thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value New Term Loan $ 3,034,750 $ 3,030,957 $ — $ — 2025 Notes 500,000 521,875 500,000 527,645 2028 Notes 700,000 753,375 700,000 754,257 2015 Term Loan — — 3,064,006 3,067,652 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The balances of AOCL, net of tax, were as follows for the three and nine months ended September 30, 2021 and 2020: (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of June 30, 2021 $ (200,340) $ (44,495) $ (3,126) $ (247,961) OCL before reclassifications (54,083) (884) — (54,967) Amounts reclassified from AOCL — 6,432 179 6,611 Net (OCL) or OCI (54,083) 5,548 179 (48,356) Balance as of September 30, 2021 $ (254,423) $ (38,947) $ (2,947) $ (296,317) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of December 31, 2020 $ (201,426) $ (79,922) $ (3,497) $ (284,845) (OCL) or OCI before reclassifications (52,997) 22,124 — (30,873) Amounts reclassified from AOCL — 18,851 550 19,401 Net (OCL) or OCI (52,997) 40,975 550 (11,472) Balance as of September 30, 2021 $ (254,423) $ (38,947) $ (2,947) $ (296,317) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of June 30, 2020 $ (359,246) $ (88,929) $ (776) $ (448,951) OCI or (OCL) before reclassifications 45,602 (3,073) — 42,529 Amounts reclassified from AOCL — 3,576 138 3,714 Net OCI 45,602 503 138 46,243 Balance as of September 30, 2020 $ (313,644) $ (88,426) $ (638) $ (402,708) (in thousands) Foreign Derivative Defined Benefit Plan Accumulated Other Comprehensive Loss Balance as of December 31, 2019 $ (306,452) $ 8,566 $ (1,018) $ (298,904) OCL before reclassifications (7,192) (107,546) (22) (114,760) Amounts reclassified from AOCI or AOCL — 10,554 402 10,956 Net (OCL) or OCI (7,192) (96,992) 380 (103,804) Balance as of September 30, 2020 $ (313,644) $ (88,426) $ (638) $ (402,708) |
Reclassification out of Accumulated Other Comprehensive Income | The following table provides the location of the pre-tax loss reclassified from AOCL into the condensed consolidated statements of operations for the periods indicated below: Pre-Tax Loss Reclassified from AOCL into Statements of Operations (in thousands) Location of Loss Reclassified from AOCL into Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest rate swaps Interest expense, net $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest rate swaps Other income (expense), net — (163) — (9,904) The following table presents the significant reclassifications to the condensed consolidated statements of operations out of AOCL or AOCI and the line item affected on the condensed consolidated statements of operations for the respective periods were as follows: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Details about AOCL or AOCI Components 2021 2020 2021 2020 Affected line item in statements of operations Losses on derivative instruments: Interest rate swaps $ (8,534) $ (5,001) $ (25,030) $ (4,513) Interest expense, net Interest rate swaps — (163) — (9,904) Other income (expense), net Income tax benefit 2,102 1,588 6,179 3,863 Provision for income taxes Total net of income tax $ (6,432) $ (3,576) $ (18,851) $ (10,554) Defined benefit plan: Amortization of actuarial loss $ (220) $ (166) $ (678) $ (487) Other income (expense), net Income tax benefit 41 28 128 85 Provision for income taxes Total net of income tax $ (179) $ (138) $ (550) $ (402) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The amounts paid to the relevant affiliates for those loans for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Interest paid $ — $ 114 $ 1,174 $ 1,511 Principal paid — 33 12,853 408 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator of the basic and diluted earnings per share (“EPS”) computations for the periods set forth below: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2021 2020 2021 2020 Numerator: Net income $ 169,115 $ 9,102 $ 267,915 $ 58,093 Net income attributable to noncontrolling interest (2,044) (1,587) (3,955) (4,499) Recapitalization investment portfolio consideration (14,150) 44,468 22,189 (6,529) Net income attributable to common stockholders of PPD, Inc. $ 152,921 $ 51,983 $ 286,149 $ 47,065 Denominator: Basic weighted-average common shares outstanding 351,351 348,672 350,974 338,277 Effect of dilutive stock options and share awards 8,187 6,158 7,852 4,882 Diluted weighted-average common shares outstanding 359,538 354,830 358,826 343,159 Earnings per share: Basic $ 0.44 $ 0.15 $ 0.82 $ 0.14 Diluted $ 0.43 $ 0.15 $ 0.80 $ 0.14 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potential common shares outstanding that were considered anti-dilutive using the treasury stock method and therefore excluded from the computation of diluted EPS, weighted for the portion of the period they were outstanding, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Anti-dilutive equity awards 2,256 320 2,106 469 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Information on reportable segment revenue and segment operating income, including a reconciliation of segment operating income to consolidated income from operations, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Segment revenue: Clinical Development Services $ 1,270,613 $ 1,008,639 $ 3,688,200 $ 2,694,775 Laboratory Services 290,183 225,163 826,448 622,407 Total segment revenue 1,560,796 1,233,802 4,514,648 3,317,182 Segment direct costs: Clinical Development Services 397,416 330,281 1,130,521 922,737 Laboratory Services 129,785 102,355 368,741 279,154 Total segment direct costs 527,201 432,636 1,499,262 1,201,891 Segment reimbursed costs: Clinical Development Services 399,687 309,117 1,229,773 730,872 Laboratory Services 33,671 26,749 100,931 79,651 Total segment reimbursed costs 433,358 335,866 1,330,704 810,523 Segment SG&A expenses: Clinical Development Services 206,644 137,984 574,069 415,334 Laboratory Services 31,217 23,283 88,651 66,929 Total segment SG&A expenses 237,861 161,267 662,720 482,263 Segment operating income: Clinical Development Services 266,866 231,257 753,837 625,832 Laboratory Services 95,510 72,776 268,125 196,673 Total segment operating income 362,376 304,033 1,021,962 822,505 Operating costs and expenses not allocated to segments: Direct costs 2,489 786 8,248 20,809 SG&A expenses 97,763 88,053 296,867 252,449 Depreciation and amortization 74,028 71,317 227,426 206,395 Long-lived asset impairment — 1,414 1,584 1,414 Income from operations $ 188,096 $ 142,463 $ 487,837 $ 341,438 |
Entity-wide Information by Ge_2
Entity-wide Information by Geographic Location (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segments, Geographical Areas [Abstract] | |
Revenue from External Customers by Geographic Area | Total revenues by geographic location for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Revenue: North America $ 977,628 $ 737,234 $ 2,766,477 $ 1,869,533 Latin America 41,220 39,589 135,236 130,210 Europe, Middle East and Africa 396,285 331,996 1,170,669 965,606 Asia-Pacific 145,663 124,983 442,266 351,833 Revenue $ 1,560,796 $ 1,233,802 $ 4,514,648 $ 3,317,182 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Components of Other Nonoperating Income (Expense) | The components of other income (expense), net, for the respective periods were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Other income (expense), net: Foreign currency gains (losses), net $ 20,773 $ (17,509) $ 16,008 $ (3,055) Interest rate swap (losses) gains (69) 209 598 (11,398) Other income 351 365 1,029 954 Other expense (33) (218) (243) (598) Total other income (expense), net $ 21,022 $ (17,153) $ 17,392 $ (14,097) |
Basis of Presentation (Details)
Basis of Presentation (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2021$ / shares | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of reportable segments | segment | 2 | |||||
Equity in (earnings) losses of unconsolidated affiliates, net of income taxes | $ 31,900 | $ 27,250 | $ (2,057) | $ 22,488 | $ (5,686) | |
PPD, Inc. | Thermo Fisher Scientific Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs | $ 1,900 | $ 13,400 | ||||
Forecast | PPD, Inc. | Thermo Fisher Scientific Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, share price (in usd per share) | $ / shares | $ 47.50 | |||||
Majority shareholders, percentage | 60.00% |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||||
Revenue recognized from performance obligations partially satisfied in prior periods | $ 65.3 | $ 28.4 | $ 149.3 | $ 82.9 | |
Unsatisfied performance obligations, amount | 10,300 | 10,300 | |||
Contract assets | $ 215.3 | 215.3 | $ 171.2 | ||
Contract with customer, liability, revenue recognized | $ 757.7 | $ 815.4 | |||
Customer Concentration Risk | Largest Customer | Accounts Receivable and Unbilled Revenues | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | 12.00% |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) | Sep. 30, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, expected timing of satisfaction, period | 12 months |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, percentage | 36.00% |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, percentage | 42.00% |
Revenue - Schedule of Accounts
Revenue - Schedule of Accounts Receivable and Unbilled Services (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 1,031,077 | $ 735,568 |
Unbilled services | 1,047,180 | 882,078 |
Total accounts receivable and unbilled services | 2,078,257 | 1,617,646 |
Allowance for doubtful accounts | (6,581) | (7,928) |
Total accounts receivable and unbilled services, net | $ 2,071,676 | $ 1,609,718 |
Revenue - Contract with Custome
Revenue - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Unearned revenue | $ 1,429,817 | $ 1,060,544 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Carrying Amount of Goodwill by Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 1,946,919 |
Accumulated impairment losses, beginning balance | (126,711) |
Goodwill, net, beginning balance | 1,820,208 |
Translation adjustments | (21,839) |
Goodwill, ending balance | 1,925,080 |
Accumulated impairment losses, ending balance | (126,711) |
Goodwill, net, ending balance | 1,798,369 |
Clinical Development Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,720,305 |
Accumulated impairment losses, beginning balance | (99,432) |
Goodwill, net, beginning balance | 1,620,873 |
Translation adjustments | (21,839) |
Goodwill, ending balance | 1,698,466 |
Accumulated impairment losses, ending balance | (99,432) |
Goodwill, net, ending balance | 1,599,034 |
Laboratory Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 226,614 |
Accumulated impairment losses, beginning balance | (27,279) |
Goodwill, net, beginning balance | 199,335 |
Translation adjustments | 0 |
Goodwill, ending balance | 226,614 |
Accumulated impairment losses, ending balance | (27,279) |
Goodwill, net, ending balance | $ 199,335 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | $ 2,290,338 | $ 2,316,033 |
Accumulated Amortization | (1,670,589) | (1,567,629) |
Net | 619,749 | 748,404 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 893,385 | 902,302 |
Accumulated Amortization | (513,486) | (479,341) |
Net | 379,899 | 422,961 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 375,156 | 378,764 |
Accumulated Amortization | (177,687) | (159,131) |
Net | 197,469 | 219,633 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 179,686 | 181,762 |
Accumulated Amortization | (179,686) | (181,196) |
Net | 0 | 566 |
Investigator/payer network | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 240,168 | 245,683 |
Accumulated Amortization | (231,480) | (217,963) |
Net | 8,688 | 27,720 |
Technology/intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 8,600 | 8,600 |
Accumulated Amortization | (4,934) | (4,256) |
Net | 3,666 | 4,344 |
Know-how/processes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 593,343 | 598,922 |
Accumulated Amortization | (563,316) | (525,742) |
Net | $ 30,027 | $ 73,180 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 37.8 | $ 39.5 | $ 122.5 | $ 118.6 |
Long-term Debt and Finance Le_3
Long-term Debt and Finance Lease Obligations - Schedule of Long-term Debt and Finance Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Finance lease obligations | $ 57,297 | $ 26,300 | $ 25,734 |
Long-term debt and finance lease obligations | 4,292,047 | 4,289,740 | |
Unamortized debt discount | (13,756) | (4,198) | |
Unamortized debt issuance costs | (35,959) | (23,112) | |
Current portion of long-term debt and finance lease obligations | (34,521) | (36,238) | |
Long-term debt and finance lease obligations, less current portion | $ 4,207,811 | 4,226,192 | |
Senior Notes | 2025 Notes | |||
Debt Instrument [Line Items] | |||
Effective Rate | 4.97% | ||
Stated Rate | 4.63% | ||
Long-term debt, gross | $ 500,000 | 500,000 | |
Senior Notes | 2028 Notes | |||
Debt Instrument [Line Items] | |||
Effective Rate | 5.24% | ||
Stated Rate | 5.00% | ||
Long-term debt, gross | $ 700,000 | 700,000 | |
Term Loan Facility | Line of Credit | New Term Loan | |||
Debt Instrument [Line Items] | |||
Effective Rate | 2.70% | ||
Stated Rate | 2.50% | ||
Long-term debt, gross | $ 3,034,750 | $ 0 | |
Term Loan Facility | Line of Credit | 2015 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective Rate | 3.71% | ||
Stated Rate | 3.50% | ||
Long-term debt, gross | $ 0 | $ 3,064,006 |
Long-term Debt and Finance Le_4
Long-term Debt and Finance Lease Obligations - Senior Secured Credit Facilities (Details) - USD ($) | Jan. 13, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2016 | Aug. 18, 2015 |
Line of Credit Facility [Line Items] | |||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 10,677,000 | $ 93,534,000 | |||||
Letters of credit outstanding, aggregate value | 1,600,000 | 1,600,000 | $ 1,600,000 | ||||||
Finance lease, right-of-use asset | $ 26,300,000 | ||||||||
Finance lease obligations | 57,297,000 | 57,297,000 | $ 26,300,000 | $ 25,734,000 | |||||
Line of Credit | New Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 0.25% | ||||||||
Total net leverage ratio | 3.75 | ||||||||
Term Loan Facility | 2015 Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Loss on extinguishment of debt | $ 10,700,000 | ||||||||
Term Loan Facility | Line of Credit | 2015 Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Aggregate principal amount | $ 2,575,000,000 | ||||||||
Percentage of face value at issuance | 99.50% | ||||||||
Discount percentage | 0.50% | ||||||||
Accordion feature, increase capacity | $ 660,000,000 | ||||||||
Extinguishment of debt, amount | 3,064,000,000 | ||||||||
Term Loan Facility | Line of Credit | 2015 Credit Agreement | Eurocurrency | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Rate floor | 1.00% | ||||||||
Term Loan Facility | Line of Credit | New Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Aggregate principal amount | $ 3,050,000,000 | ||||||||
Percentage of face value at issuance | 99.50% | ||||||||
Discount percentage | 0.50% | ||||||||
Debt issuance costs | $ 23,000,000 | ||||||||
Percentage of excess cash flow | 50.00% | ||||||||
Percentage of net cash proceeds of course asset sales | 100.00% | ||||||||
Percentage of net cash proceeds of debt issuances | 100.00% | ||||||||
Redemption price, percentage | 0.25% | ||||||||
Term Loan Facility | Line of Credit | New Credit Agreement | LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Rate floor | 0.50% | ||||||||
Interest rate | 2.00% | ||||||||
Term Loan Facility | Line of Credit | New Credit Agreement | Base Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Rate floor | 1.50% | ||||||||
Interest rate | 1.00% | ||||||||
Revolving Credit Facility | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Borrowings outstanding under the facility | 0 | 0 | |||||||
Revolving Credit Facility | Line of Credit | 2015 Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | $ 600,000,000 | ||||||||
Debt issuance costs | $ 1,100,000 | ||||||||
Commitment fee percentage on unused portion | 0.25% | ||||||||
Commitment fee percentage | 0.125% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | Step-down One | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Total net leverage ratio | 4.75 | ||||||||
Commitment fee percentage on unused portion | 0.375% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | Step-down Two | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Total net leverage ratio | 3.75 | ||||||||
Commitment fee percentage on unused portion | 0.25% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage on unused portion | 0.50% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee percentage on unused portion | 0.25% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Rate floor | 0.00% | ||||||||
Interest rate | 1.75% | ||||||||
Revolving Credit Facility | Line of Credit | New Credit Agreement | Base Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Rate floor | 1.00% | ||||||||
Interest rate | 0.75% | ||||||||
Letter of Credit | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Available credit | $ 598,400,000 | $ 598,400,000 |
Long-term Debt and Finance Le_5
Long-term Debt and Finance Lease Obligations - Scheduled Maturities of Long-term Debt and Finance Lease Obligations (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 (remaining three months) | $ 8,597 |
2022 | 34,910 |
2023 | 34,581 |
2024 | 34,615 |
2025 | 534,720 |
2026 | 35,135 |
Thereafter | 3,609,489 |
Total | $ 4,292,047 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 22.00% | 50.00% | 24.90% | 24.50% | |
Unrecognized tax benefits | $ 23.9 | $ 23.9 | $ 21.3 | ||
Unrecognized tax benefits that would impact effective tax rate | 17.1 | 17.1 | $ 14.9 | ||
Maximum | |||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||
Reasonably possible decrease in unrecognized tax benefits | $ 8.1 | $ 8.1 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Schedule of Interest Rate Derivatives (Details) | Sep. 30, 2021USD ($) |
Swap 1 | Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Amount | $ 1,500,000,000 |
Fixed Interest Rate | 1.19% |
Swap 2 and 3 | Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Amount | $ 1,428,000,000 |
Fixed Interest Rate | 1.22% |
Swap 2 and 3 | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Amount | $ 72,000,000 |
Fixed Interest Rate | 1.22% |
Swap 4 | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Amount | $ 500,000,000 |
Fixed Interest Rate | 1.17% |
Swap 5 | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional Amount | $ 500,000,000 |
Fixed Interest Rate | 0.52% |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gain (loss) from settlement | $ (0.1) | $ 0.4 | $ 0.6 | $ (1.5) |
Unrealized losses to be reclassified within the next 12 months | $ 32.6 | $ 32.6 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Pre-Tax (Loss) Gain Recognized in OCI or OCL | $ (1,174) | $ (4,364) | $ 29,421 | $ (142,709) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Reclassification out of Accumulated Other Comprehensive Income (Details) - Interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Pre-Tax Loss Reclassified from AOCL into Statements of Operations | $ (8,534) | $ (5,001) | $ (25,030) | $ (4,513) |
Other income (expense), net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Pre-Tax Loss Reclassified from AOCL into Statements of Operations | $ 0 | $ (163) | $ 0 | $ (9,904) |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - Interest rate swaps - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 1,942 | $ 3,568 |
Liabilities | 64,448 | 123,551 |
Designated as Hedging Instrument | Other accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 31,635 | 32,188 |
Designated as Hedging Instrument | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 18,447 | 74,286 |
Not Designated as Hedging Instrument | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 1,942 | 1,901 |
Liabilities | 0 | 0 |
Not Designated as Hedging Instrument | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 1,667 |
Liabilities | 0 | 0 |
Not Designated as Hedging Instrument | Other accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 6,011 | 5,184 |
Not Designated as Hedging Instrument | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | $ 8,355 | $ 11,893 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liability Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Investments | $ 241,482 | $ 265,894 |
Derivative instruments | 1,942 | 3,568 |
Total assets | 243,424 | 269,462 |
Liabilities | ||
Derivative instruments | 64,448 | 123,551 |
Recapitalization investment portfolio liability | 169,734 | 204,742 |
Total liabilities | 234,182 | 328,293 |
Level 1 | ||
Assets | ||
Investments | 1,222 | 1,307 |
Derivative instruments | 0 | 0 |
Total assets | 1,222 | 1,307 |
Liabilities | ||
Derivative instruments | 0 | 0 |
Recapitalization investment portfolio liability | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Investments | 0 | 0 |
Derivative instruments | 1,942 | 3,568 |
Total assets | 1,942 | 3,568 |
Liabilities | ||
Derivative instruments | 64,448 | 123,551 |
Recapitalization investment portfolio liability | 0 | 0 |
Total liabilities | 64,448 | 123,551 |
Level 3 | ||
Assets | ||
Investments | 240,260 | 264,587 |
Derivative instruments | 0 | 0 |
Total assets | 240,260 | 264,587 |
Liabilities | ||
Derivative instruments | 0 | 0 |
Recapitalization investment portfolio liability | 169,734 | 204,742 |
Total liabilities | $ 169,734 | $ 204,742 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement Inputs and Valuation Techniques (Details) - Fair Value, Recurring - Level 3 - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 224,314 | $ 253,801 |
Discount for lack of marketability | Market evaluation/pricing models | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range of Rates | 20.00% | 12.50% |
Discount for lack of marketability | Market evaluation/pricing models | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range of Rates | 32.50% | 32.50% |
Discount for lack of control | Recent acquisition transactions | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range of Rates | 20.00% | 20.00% |
Discount for lack of control | Recent acquisition transactions | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Range of Rates | 35.00% | 35.00% |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Investments - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 264,587 | $ 248,453 |
Recognized fair value (loss) gain | (28,042) | 16,296 |
Cash distributions received | (112) | (19,704) |
Capital contributions paid | 3,827 | 5,382 |
Ending balance | $ 240,260 | $ 250,427 |
Fair Value Measurements - Fai_3
Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Recapitalization Investment Liability - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 204,742 | $ 191,678 |
Recapitalization investment portfolio consideration change in value | (22,189) | 6,529 |
Cash distributions paid | (12,819) | 0 |
Ending balance | $ 169,734 | $ 198,207 |
Fair Value Measurements - Fai_4
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - Level 2 - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Term Loan | Carrying Amount | New Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | $ 3,034,750 | $ 0 |
Term Loan | Carrying Amount | 2015 Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 0 | 3,064,006 |
Term Loan | Estimated Fair Value | New Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 3,030,957 | 0 |
Term Loan | Estimated Fair Value | 2015 Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 0 | 3,067,652 |
Senior Notes | Carrying Amount | 2025 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 500,000 | 500,000 |
Senior Notes | Carrying Amount | 2028 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 700,000 | 700,000 |
Senior Notes | Estimated Fair Value | 2025 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | 521,875 | 527,645 |
Senior Notes | Estimated Fair Value | 2028 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument | $ 753,375 | $ 754,257 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Other comprehensive (loss) income | $ (48,356) | $ 46,243 | $ (11,472) | $ (103,804) |
Accumulated Other Comprehensive Loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balances | (247,961) | (448,951) | (284,845) | (298,904) |
OCL before reclassifications | (54,967) | 42,529 | (30,873) | (114,760) |
Amounts reclassified from AOCL | 6,611 | 3,714 | 19,401 | 10,956 |
Other comprehensive (loss) income | (48,356) | 46,243 | (11,472) | (103,804) |
Ending balances | (296,317) | (402,708) | (296,317) | (402,708) |
Foreign Currency Translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balances | (200,340) | (359,246) | (201,426) | (306,452) |
OCL before reclassifications | (54,083) | 45,602 | (52,997) | (7,192) |
Amounts reclassified from AOCL | 0 | 0 | 0 | 0 |
Other comprehensive (loss) income | (54,083) | 45,602 | (52,997) | (7,192) |
Ending balances | (254,423) | (313,644) | (254,423) | (313,644) |
Derivative Instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balances | (44,495) | (88,929) | (79,922) | 8,566 |
OCL before reclassifications | (884) | (3,073) | 22,124 | (107,546) |
Amounts reclassified from AOCL | 6,432 | 3,576 | 18,851 | 10,554 |
Other comprehensive (loss) income | 5,548 | 503 | 40,975 | (96,992) |
Ending balances | (38,947) | (88,426) | (38,947) | (88,426) |
Defined Benefit Plan | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balances | (3,126) | (776) | (3,497) | (1,018) |
OCL before reclassifications | 0 | 0 | 0 | (22) |
Amounts reclassified from AOCL | 179 | 138 | 550 | 402 |
Other comprehensive (loss) income | 179 | 138 | 550 | 380 |
Ending balances | $ (2,947) | $ (638) | $ (2,947) | $ (638) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | $ (46,231) | $ (49,882) | $ (139,577) | $ (165,995) |
Other income (expense), net | 21,022 | (17,153) | 17,392 | (14,097) |
Provision for income taxes | (39,993) | (11,169) | (81,421) | (20,682) |
Net income | 169,115 | 9,102 | 267,915 | 58,093 |
Derivative Instruments | Reclassification out of AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | (8,534) | (5,001) | (25,030) | (4,513) |
Other income (expense), net | 0 | (163) | 0 | (9,904) |
Provision for income taxes | 2,102 | 1,588 | 6,179 | 3,863 |
Net income | (6,432) | (3,576) | (18,851) | (10,554) |
Defined Benefit Plan | Reclassification out of AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other income (expense), net | (220) | (166) | (678) | (487) |
Provision for income taxes | 41 | 28 | 128 | 85 |
Net income | $ (179) | $ (138) | $ (550) | $ (402) |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
SNBL | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage by parent | 40.00% | 40.00% | |||
Exercise period | 1 year | ||||
PPD-SNBL | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage of consolidated subsidiary | 60.00% | 60.00% | |||
Majority Sponsor Affiliates | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 0 | $ 0 | $ 12,600,000 | ||
SNBL | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 300,000 | $ 300,000 | $ 0 | ||
Collaboration agreement minimum requirement for ownership percentage | 20.00% | 20.00% | |||
Related party transaction, expenses incurred | $ 300,000 | $ 200,000 | $ 800,000 | $ 800,000 | |
Recapitalization Investment Liability Repayment | Majority Sponsor Affiliates | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Repayments of related party debt | $ 0 | $ 0 | $ 11,800,000 | $ 0 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - Majority Sponsor Affiliates - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest paid | ||||
Related Party Transaction [Line Items] | ||||
Repayments of related party debt | $ 0 | $ 114 | $ 1,174 | $ 1,511 |
Principal paid | ||||
Related Party Transaction [Line Items] | ||||
Repayments of related party debt | $ 0 | $ 33 | $ 12,853 | $ 408 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income | $ 169,115 | $ 9,102 | $ 267,915 | $ 58,093 |
Net income attributable to noncontrolling interest | (2,044) | (1,587) | (3,955) | (4,499) |
Recapitalization investment portfolio consideration | (14,150) | 44,468 | 22,189 | (6,529) |
Net income attributable to common stockholders of PPD, Inc. | $ 152,921 | $ 51,983 | $ 286,149 | $ 47,065 |
Denominator: | ||||
Basic weighted-average common shares outstanding (in shares) | 351,351 | 348,672 | 350,974 | 338,277 |
Effect of dilutive stock options and restricted stock (in shares) | 8,187 | 6,158 | 7,852 | 4,882 |
Diluted weighted-average common shares outstanding (in shares) | 359,538 | 354,830 | 358,826 | 343,159 |
Earnings per share: | ||||
Basic (in usd per share) | $ 0.44 | $ 0.15 | $ 0.82 | $ 0.14 |
Diluted (in usd per share) | $ 0.43 | $ 0.15 | $ 0.80 | $ 0.14 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive equity awards (in shares) | 2,256 | 320 | 2,106 | 469 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive equity awards (in shares) | 2,256 | 320 | 2,106 | 469 |
Performance-based Options, PSUs, and Liquidity/realization Event-based Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive equity awards (in shares) | 5,200 |
Segments - Additional Informati
Segments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 1,560,796 | $ 1,233,802 | $ 4,514,648 | $ 3,317,182 |
Direct costs | 529,690 | 433,422 | 1,507,510 | 1,222,700 |
Reimbursed costs | 433,358 | 335,866 | 1,330,704 | 810,523 |
SG&A expenses | 335,624 | 249,320 | 959,587 | 734,712 |
Depreciation and amortization | 74,028 | 71,317 | 227,426 | 206,395 |
Long-lived asset impairment | 0 | 1,414 | 1,584 | 1,414 |
Income from operations | 188,096 | 142,463 | 487,837 | 341,438 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,560,796 | 1,233,802 | 4,514,648 | 3,317,182 |
Direct costs | 527,201 | 432,636 | 1,499,262 | 1,201,891 |
Reimbursed costs | 433,358 | 335,866 | 1,330,704 | 810,523 |
SG&A expenses | 237,861 | 161,267 | 662,720 | 482,263 |
Income from operations | 362,376 | 304,033 | 1,021,962 | 822,505 |
Operating Segments | Clinical Development Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,270,613 | 1,008,639 | 3,688,200 | 2,694,775 |
Direct costs | 397,416 | 330,281 | 1,130,521 | 922,737 |
Reimbursed costs | 399,687 | 309,117 | 1,229,773 | 730,872 |
SG&A expenses | 206,644 | 137,984 | 574,069 | 415,334 |
Income from operations | 266,866 | 231,257 | 753,837 | 625,832 |
Operating Segments | Laboratory Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 290,183 | 225,163 | 826,448 | 622,407 |
Direct costs | 129,785 | 102,355 | 368,741 | 279,154 |
Reimbursed costs | 33,671 | 26,749 | 100,931 | 79,651 |
SG&A expenses | 31,217 | 23,283 | 88,651 | 66,929 |
Income from operations | 95,510 | 72,776 | 268,125 | 196,673 |
Not Allocated to Segments | ||||
Segment Reporting Information [Line Items] | ||||
Direct costs | 2,489 | 786 | 8,248 | 20,809 |
SG&A expenses | 97,763 | 88,053 | 296,867 | 252,449 |
Depreciation and amortization | 74,028 | 71,317 | 227,426 | 206,395 |
Long-lived asset impairment | $ 0 | $ 1,414 | $ 1,584 | $ 1,414 |
Entity-wide Information by Ge_3
Entity-wide Information by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue: | ||||
Revenue | $ 1,560,796 | $ 1,233,802 | $ 4,514,648 | $ 3,317,182 |
North America | ||||
Revenue: | ||||
Revenue | 977,628 | 737,234 | 2,766,477 | 1,869,533 |
Latin America | ||||
Revenue: | ||||
Revenue | 41,220 | 39,589 | 135,236 | 130,210 |
Europe, Middle East and Africa | ||||
Revenue: | ||||
Revenue | 396,285 | 331,996 | 1,170,669 | 965,606 |
Asia-Pacific | ||||
Revenue: | ||||
Revenue | $ 145,663 | $ 124,983 | $ 442,266 | $ 351,833 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency gains (losses), net | $ 20,773 | $ (17,509) | $ 16,008 | $ (3,055) |
Interest rate swap (losses) gains | (69) | 209 | 598 | (11,398) |
Other income | 351 | 365 | 1,029 | 954 |
Other expense | (33) | (218) | (243) | (598) |
Total other income (expense), net | $ 21,022 | $ (17,153) | $ 17,392 | $ (14,097) |