COVER
COVER - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 11, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-04321 | ||
Entity Registrant Name | Fortrea Holdings Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 92-2796441 | ||
Entity Address, Address Line One | 8 Moore Drive, | ||
Entity Address, City or Town | Durham | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27709 | ||
City Area Code | (877) | ||
Local Phone Number | 495-0816 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | FTRE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.3 | ||
Entity Common Stock, Shares Outstanding | 89.4 | ||
Entity Central Index Key | 0001965040 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2024 annual meeting of stockholders, which is to be filed within 120 days of the registrant’s fiscal year ended December 31, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Raleigh, North Carolina |
CONSOLIDATED AND COMBINED BALAN
CONSOLIDATED AND COMBINED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 108.6 | $ 112 |
Accounts receivable and unbilled services, net | 1,052.1 | 1,022.2 |
Prepaid expenses and other | 92.4 | 112.7 |
Total current assets | 1,253.1 | 1,246.9 |
Property, plant and equipment, net | 220.9 | 164.9 |
Goodwill, net | 2,029.3 | 1,997.3 |
Intangible assets, net | 771.2 | 823.3 |
Deferred income taxes | 3.2 | 1.2 |
Other assets, net | 79.5 | 54.3 |
Total assets | 4,357.2 | 4,287.9 |
Current liabilities: | ||
Accounts payable | 132.8 | 81.5 |
Accrued expenses and other current liabilities | 356.1 | 322.7 |
Unearned revenue | 241.4 | 271.5 |
Current portion of long-term debt | 26.1 | 0 |
Short-term operating lease liabilities | 19.5 | 23.3 |
Total current liabilities | 775.9 | 699 |
Long-term debt, less current portion | 1,565.9 | 0 |
Operating lease liabilities | 66.5 | 40.1 |
Deferred income taxes and other tax liabilities | 148.8 | 184.5 |
Other liabilities | 61.3 | 21.7 |
Total liabilities | 2,618.4 | 945.3 |
Commitments and contingent liabilities (Note 15) | ||
Equity: | ||
Former parent investment | 0 | 3,618.6 |
Common stock, 88.8 and 0.0 shares outstanding at December 31, 2023, and December 31, 2022, respectively | 0.1 | 0 |
Additional paid-in capital | 2,006.2 | 0 |
Accumulated deficit | (49.1) | 0 |
Accumulated other comprehensive loss | (218.4) | (276) |
Total equity | 1,738.8 | 3,342.6 |
Total liabilities and equity | $ 4,357.2 | $ 4,287.9 |
CONSOLIDATED AND COMBINED BAL_2
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | |||
Common stock, outstanding (in shares) | 88.8 | 88.8 | 0 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenues | $ 3,109 | $ 3,096.1 | $ 3,057.5 |
Costs and expenses: | |||
Direct costs, exclusive of depreciation and amortization (including costs incurred from related parties of $48.8, $87.1 and $70.1 during the years ended December 31, 2023, 2022 and 2021, respectively. See Note 18.) | 2,588.6 | 2,447.4 | 2,453.1 |
Selling, general and administrative expenses, exclusive of depreciation and amortization | 336.6 | 279.8 | 303.1 |
Depreciation and amortization | 96.4 | 92.7 | 166.3 |
Goodwill and other asset impairment | 0 | 9.8 | 0 |
Restructuring and other charges | 24.3 | 30.5 | 20.7 |
Total costs and expenses | 3,045.9 | 2,860.2 | 2,943.2 |
Operating income | 63.1 | 235.9 | 114.3 |
Other income (expense): | |||
Interest expense | (69.8) | (0.2) | (0.2) |
Foreign exchange gain (loss) | 0.9 | (0.9) | 20.2 |
Other, net | 6.9 | 2.2 | 2.1 |
Income before income taxes | 1.1 | 237 | 136.4 |
Provision for income taxes | 4.5 | 44.1 | 38.4 |
Net income (loss) | $ (3.4) | $ 192.9 | $ 98 |
Earnings per common share | |||
Basic (in dollars per share) | $ (0.04) | $ 2.17 | $ 1.10 |
Diluted (in dollars per share) | $ (0.04) | $ 2.17 | $ 1.10 |
CONSOLIDATED AND COMBINED STA_2
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Direct costs, exclusive of depreciation and amortization | $ 2,588.6 | $ 2,447.4 | $ 2,453.1 |
Related party | |||
Direct costs, exclusive of depreciation and amortization | $ 48.8 | $ 87.1 | $ 70.1 |
CONSOLIDATED AND COMBINED STA_3
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (3.4) | $ 192.9 | $ 98 |
Foreign currency translation adjustments | 57.6 | (127) | (32.3) |
Net benefit plan adjustments | 1.2 | (0.6) | 5.7 |
Unrealized gain (loss) on derivative instruments | (1.9) | 0 | 0 |
Other comprehensive income (loss) before tax | 56.9 | (127.6) | (26.6) |
(Provision) benefit for income tax related to items of comprehensive income | 0.7 | 0 | (1.4) |
Other comprehensive income (loss), net of tax | 57.6 | (127.6) | (28) |
Comprehensive income | $ 54.2 | $ 65.3 | $ 70 |
CONSOLIDATED AND COMBINED STA_4
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Former Parent Investment | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||
Beginning balance at Dec. 31, 2020 | $ 3,291.6 | $ 0 | $ 0 | $ 3,412 | $ 0 | $ (120.4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 98 | 98 | ||||
Other comprehensive (loss) income, net of tax | (28) | (28) | ||||
Net transfers (to) from Former Parent | (101) | (101) | ||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | |||||
Ending balance at Dec. 31, 2021 | 3,260.6 | $ 0 | 0 | 3,409 | 0 | (148.4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 192.9 | 192.9 | ||||
Other comprehensive (loss) income, net of tax | (127.6) | (127.6) | ||||
Net transfers (to) from Former Parent | $ 16.7 | 16.7 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 0 | ||||
Ending balance at Dec. 31, 2022 | $ 3,342.6 | $ 0 | 0 | 3,618.6 | 0 | (276) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (3.4) | 45.7 | (49.1) | |||
Other comprehensive (loss) income, net of tax | 57.6 | 57.6 | ||||
Special payment to Former Parent | (1,595) | (1,595) | ||||
Net transfers (to) from Former Parent | (89.7) | (89.7) | ||||
Reclassification of Former Parent investment to additional paid-in capital | 0 | 1,979.6 | (1,979.6) | |||
Issuance of common stock (in shares) | 88.8 | |||||
Issuance of common stock | 0.1 | $ 0.1 | ||||
Stock compensation | $ 26.6 | 26.6 | ||||
Ending balance (in shares) at Dec. 31, 2023 | 88.8 | 88.8 | ||||
Ending balance at Dec. 31, 2023 | $ 1,738.8 | $ 0.1 | $ 2,006.2 | $ 0 | $ (49.1) | $ (218.4) |
CONSOLIDATED AND COMBINED STA_5
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ (3.4) | $ 192.9 | $ 98 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 96.4 | 92.7 | 166.3 |
Stock compensation | 42.7 | 25.4 | 27.5 |
Operating lease right-of-use asset expense | 27.4 | 24.9 | 32.5 |
Goodwill and other asset impairment | 0 | 9.8 | 0 |
Deferred income taxes | (40.5) | (16.5) | (30.2) |
Other, net | (1) | 4.1 | 2.9 |
Change in assets and liabilities: | |||
Increase in accounts receivable and unbilled services, net | (28.8) | (105) | (187.6) |
Increase in prepaid expenses and other | (2) | (12.2) | (25.7) |
Increase (decrease) in accounts payable | 51.1 | 22.4 | (6.2) |
Increase (decrease) in deferred revenue | (3.4) | (32.5) | 39.6 |
Increase (decrease) in accrued expenses and other | 28.9 | (118.5) | 52.7 |
Net cash provided by operating activities | 167.4 | 87.5 | 169.8 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (40.3) | (54.4) | (26.5) |
Proceeds from sale of assets | 8.5 | 0.4 | 0.3 |
Net cash used for investing activities | (31.8) | (54) | (26.2) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facilities | 164 | 0 | 0 |
Payments on revolving credit facilities | (164) | 0 | 0 |
Proceeds from term loans | 1,061.4 | 0 | 0 |
Proceeds from issuance of senior notes | 570 | 0 | 0 |
Debt issuance costs | (26.4) | 0 | 0 |
Principal payments of long-term debt | (15.4) | 0 | 0 |
Special payment to Former Parent | (1,595) | 0 | 0 |
Net transfers (to) from Former Parent | (133.6) | (8.7) | (128.5) |
Net cash used for financing activities | (139) | (8.7) | (128.5) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (7.4) | (0.8) |
Net (decrease) increase in cash and cash equivalents | (3.4) | 17.4 | 14.3 |
Cash and cash equivalents at beginning of period | 112 | 94.6 | 80.3 |
Cash and cash equivalents at end of period | $ 108.6 | $ 112 | $ 94.6 |
BUSINESS
BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Description of Business Fortrea Holdings Inc. ("Fortrea" or the “Company”), a Delaware corporation incorporated on January 31, 2023, is a leading global contract research organization (“CRO”) providing biopharmaceutical product and medical device development services, patient access solutions and other enabling services to pharmaceutical, biotechnology and medical device customers. The Company offers customers highly flexible delivery models that include Full Service, Functional Service Provider, and Hybrid Service structures. The Company has a rich history of providing clinical development services for over 30 years across more than 20 therapeutic areas, first as Covance and later as Labcorp Drug Development. On June 30, 2023, the Company completed a spin-off (the “Spin” or the “Separation”) from Laboratory Corporation of America Holdings (“Labcorp” or “Former Parent”). The Company leverages its global scale, clinical data insights, technology innovation, industry network and decades of experience as a standalone company and as a business unit prior to the Spin to deliver tailored solutions to its customers. With what the Company believes is a distinctive market offering, Fortrea meets growing global demand for clinical development services. The Company manages its business in two reportable segments - Clinical Services and Enabling Services. The Clinical Services segment provides services across the clinical pharmacology and clinical development spectrum. The Enabling Services segment provides patient access and clinical trial technology solutions to customers that streamline complex randomization and optimize the trial drug supply process, while minimizing operational costs and supporting timely and accurate patient dosing. For further financial information about these segments, see Note 20, Business Segment Information to the consolidated and combined financial statements. The Company has established access to key markets worldwide through a strategic footprint of primary office locations in five countries (the United States, the United Kingdom, China, India and Singapore) with field operations in other jurisdictions worldwide. Agreements with Labcorp On June 30, 2023, the Company completed the Spin from Labcorp. The Company has entered into several agreements with Labcorp that govern the relationship of the parties following the Separation, including the Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, and the Transition Services Agreement, which are described in the Company’s Registration Statement on Form 10, as amended (“Form 10”), as filed with the Securities and Exchange Commission (the “SEC”). Under the terms of the Transition Services Agreement, the Company and Labcorp agreed to provide each other certain transitional services. The services and assets to be provided to Fortrea by Labcorp support the Company’s enterprise functions, most notably IT applications, network and security support and hosting as well as finance, human resources, marketing and other administrative support. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Financial Statement Presentation Prior to June 30, 2023, Fortrea existed and functioned as part of the consolidated business of Former Parent. The Company’s financial statements for periods through the Spin reflect the historical financial position, results of operations and cash flows of the Company, for the periods presented, prepared on a “carve-out” basis and have been derived from the consolidated financial statements and accounting records of Labcorp using the historical results of operations and historical basis of assets and liabilities of the Company and reflect Labcorp’s net investment in the Company. The Company’s balance sheet as of December 31, 2023 is a consolidated balance sheet based on the financial position of Fortrea as a standalone company. All periods prior to the Spin include combined financial statements. The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this document as “financial statements.” The Company’s consolidated and combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated and combined financial statements do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the prior periods presented. The combined statements of operations include all revenues and costs directly attributable to Fortrea’s business. The combined statements of operations for prior periods also include costs for certain centralized functions and programs provided and administered by Labcorp that were allocated to Fortrea. These centralized functions and programs include, but are not limited to legal, tax, treasury, risk management, sales expenses, information technology, human resources, finance, supply chain, executive leadership and stock-based compensation. These expenses were allocated to Fortrea based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net revenues or headcount or other reasonable driver, as applicable. Fortrea considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, Fortrea during the prior periods presented. However, the allocations may not reflect the expenses Fortrea would have incurred as an independent company for the prior periods presented. Actual costs that may have been incurred if Fortrea had been a standalone company would depend on a number of factors, including, but not limited to, the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. For a period following the Spin some of these functions are provided by Labcorp. Labcorp utilizes a centralized approach to cash management and financing of its operations. The cash and cash equivalents held by Labcorp at the corporate level were not specifically identifiable to Fortrea and therefore have not been reflected in the Company’s combined balance sheet as of December 31, 2022. Cash and cash equivalents in the consolidated and combined balance sheets represent cash and cash equivalents held by the Company. As of December 31, 2022, the combined financial statements include certain assets and liabilities that have historically been held at the Labcorp corporate level but are specifically identifiable or otherwise attributable to Fortrea. Labcorp’s third-party long-term debt and the related interest expense have not been allocated to Fortrea for any of the periods presented because Fortrea was not the legal obligor of such debt. As of December 31, 2022, a Former Parent investment is shown in lieu of common stock and retained earnings accounts in the combined financial statements. The total net effect of the settlement of the transactions between the Company and Labcorp, exclusive of those historically settled in cash, is reflected in the combined statements of cash flows in cash flows from financing activities as net transfers (to) from Former Parent and in the consolidated and combined balance sheets as Former Parent investment. All intercompany transactions within the Company have been eliminated. All transactions between the Company and Former Parent prior to the Spin have been included in these consolidated and combined financial statements. For those transactions between the Company and Former Parent that were historically settled in cash, the Company has reflected such balances in the consolidated and combined balance sheets as due from related parties or due to related parties for the period after the Spin. The Former Parent investment and all amounts due from or due to Former Parent were settled at the time of the Spin. Refer to Note 18, Related Party Transactions for further information. Reclassification Certain previously reported amounts have been reclassified to conform to the current year presentation. The Company reclassified $0.2 and $0.2 from Other, net to Interest expense in the consolidated and combined statement of operations for the periods December 31, 2022 and 2021, respectively. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Company 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 reported periods. Significant estimates include revenue estimates, deferred tax assets, fair value of goodwill, amortization lives for acquired intangible assets, and the fair values of assets acquired and liabilities assumed in business combinations. Actual results could differ from those estimates. Recognition of Revenues The Company provides phase I through phase IV clinical development services to pharmaceutical, biotechnology, and medical device companies worldwide. A majority of the Company’s revenues are earned under contracts that are long term in nature, ranging in duration from a few months to many years. The majority of the Company's contracts contain a single performance obligation, as the Company provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another. For contracts that include multiple performance obligations, the Company allocates the contract value to the goods and services based on a customer price list, if available. If a price list is not available, the Company will estimate the transaction price using either market prices or an “expected cost plus margin” approach. The total contract value is estimated at the beginning of the contract and is equal to the amount expected to be billed to the customer. Other payments and billing adjustments may also factor into the calculation of total contract value, such as the reimbursement of out-of-pocket costs and volume-based rebates. These contracts generally take the form of fixed-price, fee-for-service or software-as-a-service arrangements subject to pricing adjustments based on changes in scope. Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that are specific to the service provided. In an output method, revenue is determined by dividing the actual units of output achieved by the total units of output required under the contract and multiplying that percentage by the total contract value. When using an input method, revenue is recognized by dividing the actual costs incurred by the total estimated cost expected to complete the contract and multiplying that percentage by the total contract value. Contract costs principally include direct labor and reimbursable out-of-pocket costs. The estimate of total costs expected to complete the contract requires significant judgment and estimates are based on various assumptions of events that often span several years. These estimates are reviewed periodically and any adjustments are recognized on a cumulative catch-up basis in the period they become known. Fee-for-service contracts are typically priced based on transaction volume or time and materials. For volume-based contracts the contract value is entirely variable and revenue is recognized as the specific product or service is completed. For services billed based on time and materials, revenue is recognized using the right to invoice practical expedient. Software as a service (“SaaS”) arrangements represent a single promise to provide continuous access to a hosted software platform. As each day of providing access to the platform is substantially the same, and the customer simultaneously receives and consumes the benefits as access is provided, the Company recognizes revenue using an output method based on time elapsed, which is on a straight-line basis over the course of the contracted SaaS hosting period. Contracts are often modified to account for changes in contract specifications and requirements. Generally, when contract modifications create new performance obligations, the modification is considered to be a separate contract and revenue is recognized prospectively. When contract modifications change existing performance obligations, the impact on the existing transaction price and measure of progress for the performance obligation to which it relates is generally recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Most contracts are terminable with or without cause by the customer, either immediately or upon notice. These contracts typically require payment to the Company of expenses to wind-down the study or project, fees earned to date and, in some cases, a termination fee or a payment to the Company of some portion of the fees or profits that could have been earned by the Company under the contract if it had not been terminated early. Termination fees are included in revenues when services are performed and realization is assured. Contract costs The Company incurs sales commissions in the process of obtaining contracts with customers, which are recoverable through the service fees in the contract. Sales commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term, along with related payroll tax expense. The amortization of commission expense is based on the weighted average contract duration for all commissionable awards in the respective business in which the commission expense is paid, which approximates the period over which goods and services are transferred to the customer. The amortization period of sales commissions ranges from approximately 1 to 4 years, depending on the business. For businesses that enter primarily short-term contracts, the Company applies the practical expedient which allows costs to obtain a contract to be expensed when incurred if the amortization period of the assets that would otherwise have been recognized is one year or less. Amortization of assets from sales commissions is included in selling, general, and administrative expense. The Company incurs costs to fulfill contracts with customers, which are recoverable through the service fees in the contract. Contract fulfillment costs include software implementation costs and setup costs for certain services. These costs are recognized as assets and amortized to direct costs over the expected term of the contract to which the implementation relates, which is the period over which services are expected to be provided to the customer. This period typically ranges from 2 to 5 years. Accounts Receivable, Unbilled Services and Unearned Revenue Differences in the timing of revenue recognition and associated billing and cash collections result in recording accounts receivable, unbilled services and unearned revenue in the consolidated and combined balance sheet. Payments received in advance of services being provided are contract liabilities recognized as unearned revenue. Revenue recognized in advance of billing is recognized as unbilled services. Once a customer is invoiced, the contract asset is reduced for the amount billed, and a corresponding accounts receivable is recognized. All contract assets are billable to customers within one year from the respective balance sheet date. Reimbursable Out-of-Pocket Expenses The Company pays on behalf of its customers certain out-of-pocket costs for which it is reimbursed at cost, without mark-up or profit. Out-of-pocket costs paid by the Company are reflected in direct costs, while the reimbursements received are reflected in revenues in the consolidated and combined statements of operations. Costs and Expenses Direct costs include payroll and related benefits for project-related employees, pass through costs, transition services agreement direct costs, information technology costs and other direct costs. Selling, general and administrative expenses consist primarily of administrative payroll and related benefit charges, advertising and promotional expenses, administrative travel and an allocation of facility charges and information technology costs. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and unbilled services. The Company maintains cash and cash equivalents with various major financial institutions. These financial institutions are generally highly rated and geographically dispersed. The Company evaluates the relative credit standing of these financial institutions and has not sustained credit losses from instruments held at financial institutions. Substantially all of the Company’s accounts receivable and unbilled services are with companies in the pharmaceutical, biotechnology and medical device industries. As of December 31, 2023, two pharmaceutical companies accounted for approximately 16.0% and 10.7% of the Company’s combined gross accounts receivable and unbilled services. For the year ended December 31, 2022, one pharmaceutical company accounted for approximately 10.5% of the Company's combined gross accounts receivable and unbilled services. Additionally, for the year ended December 31, 2023, one customer accounted for approximately 10.6% of revenue, and for the years ended December 31, 2022 and 2021, no customer accounted for more than 10% of revenues. Concentrations of credit risk are mitigated due to the number of the Company’s customers, as well as their dispersion across many different geographic regions. Additionally, the Company applies assumptions and judgments, including historical collection experience and reasonable and supportable forecasts, for assessing collectability and determining allowances for doubtful accounts. Stock Compensation Plans Certain employees participate in the stock compensation plans sponsored by Fortrea. The Company’s stock compensation awards consist of stock options, restricted stock unit awards and performance share awards and are based on its common shares. Compensation expense for all stock-based employee grants are recognized based on the fair value of the Company`s shares on the date of grant. Stock-based compensation expense is recognized net of an estimated forfeiture rate on a straight-line basis over the requisite service period of the award. The estimation of equity awards that will ultimately vest requires judgment, and the Company considers many factors when estimating expected forfeitures, including types of awards and historical experience. Forfeitures are recognized as a reduction of compensation expense in earnings in the period in which they occur. The consolidated and combined statements of operations also include an allocation of the Former Parent’s corporate and shared employee stock-based compensation expenses. See Note 14, Stock Compensation Plans , for additional information. Cash Equivalents Cash and cash equivalents consist of highly liquid instruments, such as commercial paper, time deposits, and other money market instruments, which have maturities when purchased of three months or less. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation and amortization expense is computed on all classes of assets based on their estimated useful lives, as indicated below, using the straight-line method. Years Buildings and building improvements 10 - 35 Machinery and equipment 3 - 10 Furniture and fixtures 5 - 10 Software 3 - 10 Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related leases. Expenditures for repairs and maintenance are charged to operations as incurred. Retirements, sales and other disposals of assets are recorded by removing the cost and accumulated depreciation from the related accounts with any resulting gain or loss reflected in the consolidated and combined statements of operations. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Capitalized Software Costs The Company capitalizes purchased software that is ready for service and capitalizes software development costs incurred on significant projects starting from the time that the preliminary project stage is completed and the Company commits to funding a project until the project is substantially complete and the software is ready for its intended use. Other computer software maintenance costs related to software development are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful life of the underlying system ranging from three Goodwill The Company assesses goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The annual impairment test for goodwill includes an option to perform a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying value. Reporting units are businesses with discrete financial information that is available and reviewed by management. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. The Company may also choose to bypass the qualitative assessment for any reporting unit in its goodwill assessment and proceed directly to performing the quantitative assessment. The Company recognizes an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. In the qualitative assessment, the Company considers relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate changes, and (vi) changes in products or services offered by the reporting unit. If applicable, performance in recent years is compared to forecasts included in prior quantitative valuations. Based on the results of the qualitative assessment, if the Company concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying values of the reporting unit, then no quantitative assessment is performed. The quantitative assessment includes the estimation of the fair value of each reporting unit as compared to the carrying value of the reporting unit. The Company estimates the fair value of a reporting unit using both income-based and market-based valuation methods. The income-based approach is based on the reporting unit's forecasted future cash flows that are discounted to the present value using the reporting unit's weighted average cost of capital. For the market-based approach, the Company utilizes a number of factors such as operating results, business plans, market multiples, and present value techniques. Based upon the range of estimated values developed from the income and market-based methods, the Company determines the estimated fair value for the reporting unit. If the estimated fair value of the reporting unit exceeds the carrying value, the goodwill is not impaired and no further review is required. Goodwill is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Recoverability of assets to be held and used is determined by the Company at the level for which there are identifiable cash flows, by comparison of the carrying amount of the assets to future undiscounted net cash flows before interest expense and income taxes expected to be generated by the assets. Impairment, if any, is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets (based on market prices in an active market or on discounted cash flows). Assets to be disposed of are reported at the lower of the carrying amount or fair value. Intangible Assets Intangible assets are amortized on a straight-line basis over the expected periods to be benefited, as set forth in the table below. Years Customer relationships 9 - 25 Technology 2 - 13 Non-compete agreements 3 - 5 Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Leases All leases with a lease term greater than 12 months, regardless of lease type classification, are recorded as an obligation on the balance sheet with a corresponding right-of-use asset. Leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A certain number of these leases contain rent escalation clauses either fixed or adjusted periodically for inflation or market rates that are factored into the Company's determination of lease payments. As most of the Company's leases do not provide an implicit rate, the Company estimates an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar debt financing, and adjusting this amount based on the impact of collateral over the term of each lease. The Company uses this rate to discount payments to present value. Some operating leases contain renewal options, some of which also include options to early terminate the leases. The exercise of these options is at the Company's discretion and the Company evaluates each renewal option to determine if it is reasonably possible to be exercised and should be included in the accounting lease term. See Note 7, Leases , to the consolidated and combined financial statements. Income Taxes During the periods prior to 2023 presented in the consolidated and combined financial statements, the operations of the Company were included in the consolidated U.S. federal and certain state and local and foreign income tax returns filed by Labcorp. For 2023, for U.S. federal and state purposes, the Company will be included in the tax returns filed by Labcorp for the period prior to the Spin and will file its own federal and state filings for the period after the Spin. The Company will file foreign income tax returns for 2023 for the entire year. The income tax provision in these consolidated and combined financial statements was calculated using the separate return basis, as if the Company was a separate taxpayer for all years, with the first half of 2023 and prior periods calculated on a carveout basis and the second half of 2023 based on as reported amounts. The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. The Company recognizes and measures its uncertain tax positions based on the rules under Accounting Standards Codification (“ASC”) 740, “Income Taxes”. Interest and penalties related to these unrecognized tax benefits are reported in income tax expense. Derivative Financial Instruments The Company addresses its exposure to market risks, principally the market risk associated with changes in interest rates and currency exchange rates, through a controlled program of risk management that includes, from time to time, the use of derivative financial instruments. The Company does not hold or issue derivative financial instruments for trading purposes. The Company does not believe that its exposure to market risk is material to the Company’s financial position or results of operations. Interest rate swap agreements, which are used by the Company from time to time in the management of interest rate exposure, are accounted for at fair value. These derivative instruments are accounted for as cash flow hedges and recognized as assets and liabilities, as applicable, and classified as current or noncurrent based on the swap’s settlement dates. The derivative instruments have been assessed and are considered to be perfectly effective hedges and accordingly, changes in the fair value of the interest rate swaps are initially recorded in the condensed consolidated and combined statements of comprehensive income. Cash flows from the interest rate swaps are included in operating activities. Foreign currency forward contracts, which are used by the Company to hedge the Company’s foreign currency exposure, are accounted for at fair value. These contracts are short-term in nature and are not designated hedging instruments; therefore changes in the fair value of the Company’s foreign currency forward contracts are recognized directly in earnings. Cash flows from the foreign currency forward contracts are included in operating activities. Fair Value of Financial Instruments Fair value measurements for financial assets and liabilities are determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered fair value hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2), and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The carrying amounts of cash and cash equivalents, accounts receivable, income taxes receivable, and accounts payable are considered to be representative of their respective fair values due to their short-term nature. Foreign Currencies For subsidiaries outside of the U.S. that operate in a local currency environment, income and expense items are translated to U.S. dollars at the monthly average rates of exchange prevailing during the period, assets and liabilities are translated at period-end exchange rates and equity accounts are translated at historical exchange rates. Translation adjustments are accumulated in a separate component of equity in the combined balance sheets and are included in the determination of comprehensive income in the combined statements of comprehensive earnings and combined statements of changes in equity. Transaction gains and losses are included in the determination of net income in the consolidated and combined statements of operations. Earnings Per Share Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net earnings including the impact of dilutive adjustments by the weighted average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s stock options, restricted stock units, and performance share awards. Recently Issued and Adopted Accounting Standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements. The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included in the reported measure of segment profit or loss. It does not change the definition of a segment or the guidance for determining reportable segments. The new guidance will be effective for the Company in the annual period beginning January 1, 2024 and in 2025 for interim periods. The Company is assessing the impacts of this ASU on its disclosures within the consolidated financial statements. In December 2023, the FASB issued guidance to require qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES The Company’s revenue by segment and geography for the years ended December 31, 2023, 2022 and 2021 is as follows: Year Ended December 31, 2023 Europe North America Other Total Clinical Services $ 827.5 $ 1,395.4 $ 616.6 $ 2,839.5 Enabling Services — 268.1 1.4 269.5 Total $ 827.5 $ 1,663.5 $ 618.0 $ 3,109 Year Ended December 31, 2022 Europe North America Other Total Clinical Services $ 841.9 $ 1,403.9 $ 579.6 $ 2,825.4 Enabling Services — 268.6 2.1 270.7 Total $ 841.9 $ 1,672.5 $ 581.7 $ 3,096.1 Year Ended December 31, 2021 Europe North America Other Total Clinical Services $ 868.4 $ 1,357.6 $ 537.5 $ 2,763.5 Enabling Services — 292.0 2.0 294.0 Total $ 868.4 $ 1,649.6 $ 539.5 $ 3,057.5 Revenue from the United States comprises substantially all revenue in North America. Contract costs The following table provides information about contract asset balances: December 31, 2023 December 31, 2022 Sales commission assets $ 16.4 $ 18.6 Deferred contract costs 12.7 14.8 Total $ 29.1 $ 33.4 Amortization related to sales commission assets for the years ended December 31, 2023, 2022 and 2021, was $13.8, $13.4 and $11.4, respectively. Amortization related to deferred contract costs for the years ended December 31, 2023, 2022 and 2021, was $9.2, $12.4 and $13.5, respectively. The Company applies the practical expedient to not recognize the effect of financing in its contracts with customers, when the difference in timing of payment and performance is one year or less. Accounts Receivable, Unbilled Services and Unearned Revenue The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers: December 31, 2023 December 31, 2022 Accounts receivable $ 481.0 $ 449.2 Unbilled services 603.4 585.7 Less: allowance for credit losses (32.3) (12.7) Total $ 1,052.1 $ 1,022.2 Unearned revenue $ 268.8 $ 271.5 Revenue recognized during the period, that was included in the unearned revenue balance at the beginning of the period, was $211.1, $230.8 and $208.7 for the years ended December 31, 2023, 2022 and 2021, respectively. Credit Loss Rollforward The Company estimates future expected losses on accounts receivable and unbilled services over the remaining collection period of the instrument. The rollforward for the allowance for credit losses for the years ended December 31, 2023 and 2022, is as follows: Accounts Receivable and Unbilled Services Allowance for credit losses as of December 31, 2021 $ 11.7 Credit loss expense 3.4 Write-offs (2.4) Allowance for credit losses as of December 31, 2022 $ 12.7 Credit loss expense 27.8 Write-offs (8.2) Allowance for credit losses as of December 31, 2023 $ 32.3 Performance Obligations Under Long-Term Contracts The amount of existing performance obligations under such long-term contracts unsatisfied as of December 31, 2023, was $4,762.8. The Company expects to recognize approximately 31% of the existing performance obligations as of December 31, 2023, as revenue over the following 12 months, and the remaining balance thereafter. The Company's long-term contracts generally range from 1 to 8 years. During the year ended December 31, 2023, the Company had reductions of approximately $60.1 in the Company’s revenues related to performance obligations partially satisfied in previous periods. During the years ended December 31, 2022 and 2021, revenue of $72.3 and $80.3, respectively, was recognized from performance obligations that were partially satisfied in a previous period. Substantially all of these adjustments were associated with changes in scope or price for full service clinical studies. The gross and net amounts of revenue recognized solely from changes in estimates were not material. Accounts Receivable Purchase Program On June 23, 2023, Fortrea entered into an accounts receivable purchase program (“ARPP”) with a financial institution ( the "Financial Institution") . The ARPP establishes a receivables factoring facility whereby the Company may sell up to $80.0 in customer receivables based on the availability of certain eligible receivables and the satisfaction of certain conditions. Under the facility, the Company may sell eligible receivables and retains no interest in the transferred receivables other than collection and administrative functions for the Financial Institution. The Company accounts for these receivable transfers as sales and derecognizes the sold receivables from its balance sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. The Company continues to service, administer and collect the receivables on behalf of the Financial Institution and does not receive a servicing fee as part of the arrangement. During the year ended December 31, 2023, $17.5 of receivables were sold with net proceeds of $17.3. |
RESTRUCTURING AND OTHER CHARGES
RESTRUCTURING AND OTHER CHARGES | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER CHARGES | RESTRUCTURING AND OTHER CHARGES The Company regularly undertakes various programs aimed at increasing efficiency, utilizing lower cost locations and adapting to changes in the needs of its customers. These programs include the regular review of the number and location of the Company’s existing employees and facilities compared to the shifting needs of its customers, developments in technology and remote working, and its capabilities to utilize lower cost locations. Restructuring and other charges are not allocated to the Company’s reportable segments as they are not part of the segment performance measures regularly reviewed by management. 2023 Restructuring During 2023, the Company took actions to reduce overcapacity, align resources, and restructure certain operations. These actions included eliminating redundant positions and aligning resources for cost improvement and to meet customer requirements. These restructuring actions are expected to continue throughout 2024. The Company recorded net restructuring charges of $24.3, including impairment of facility related assets of $0.2, which are reflected within restructuring and other charges in the consolidated and combined statements of operations. The charges were comprised of $20.0 in severance and other employee costs and $4.3 in lease and other facility-related costs. The Company expects the restructuring and other charges accrued as of December 31, 2023 will be paid within the next twelve months and are included within accrued expenses and other current liabilities on the accompanying consolidated and combined balance sheets. 2022 Restructuring During 2022, the Company recorded net restructuring charges of $30.5, including impairment of facility related assets of $2.3, which are reflected within restructuring and other charges in the combined statements of operations. The charges were comprised of $16.5 in severance and other employee costs and $14.2 in lease and other facility- related costs. The charges were partially offset by the reversal of previously established liability of $0.2 in unused severance. 2021 Restructuring During 2021, the Company recorded net restructuring charges of $20.7, including impairment of facility related assets of $2.8, which are reflected within restructuring and other charges in the combined statements of operations. The charges were comprised of $5.2 in severance and other employee costs and $16.2 in lease and other facility-related costs. The charges were partially offset by the reversal of the previously established liability of $0.1 in unused severance and $0.6 in unused facility-related costs. The Company recorded restructuring and other charges as follows: Years Ended December 31, 2023 2022 2021 Restructuring charges $ 23.9 $ 27.5 $ 16.1 Impairment of facility related assets 0.2 2.3 2.8 Restructuring charges allocated from Former Parent 0.2 0.7 1.8 Total $ 24.3 $ 30.5 $ 20.7 The following represents the Company’s restructuring accrual activities for the periods indicated: Severance and Lease and Other Total Balance as of December 31, 2020 $ 0.6 $ 2.7 $ 3.3 Restructuring charges 3.7 13.1 16.8 Reduction of prior restructuring accruals (0.1) (0.6) (0.7) Cash payments and other adjustments (3.6) (12.7) (16.3) Balance as of December 31, 2021 0.6 2.5 3.1 Restructuring charges 15.9 11.8 27.7 Reduction of prior restructuring accruals (0.2) — (0.2) Cash payments and other adjustments (14.4) (9.3) (23.7) Balance as of December 31, 2022 1.9 5.0 6.9 Restructuring charges 20.0 4.3 24.3 Reduction of prior restructuring accruals — — — Cash payments and other adjustments (20.6) (5.9) (26.5) Balance as of December 31, 2023 $ 1.3 $ 3.4 $ 4.7 Current $ 2.1 Non-current 2.6 $ 4.7 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE On June 30, 2023, the Separation from Labcorp was effected through a pro-rata distribution of one share of the Company's common stock for every share of Labcorp common stock held at the close of business on the record date of June 20, 2023. As a result, on June 30, 2023, the Company had 88.8 shares of common stock outstanding. This share amount is being utilized for the calculation of basic earnings per share for all periods presented through the Separation date. As of the Separation date, actual outstanding shares are used to calculate basic weighted average common shares outstanding. Basic earnings per share is computed by dividing net earnings attributable to the Company by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net earnings including the impact of dilutive adjustments by the weighted average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s outstanding stock options, restricted stock units, and performance share awards. The following represents a reconciliation of basic earnings per share to diluted earnings per share. Year ended December 31, 2023 2022 2021 Earnings Shares Per Share Amount Earnings Shares Per Share Amount Earnings Shares Per Share Amount Basic earnings per share: Net earnings $ (3.4) 88.8 $ (0.04) $ 192.9 88.8 $ 2.17 $ 98.0 88.8 $ 1.10 Dilutive effect of employee stock options & awards — — — — — — — — — Net earnings including impact of dilutive adjustments $ (3.4) 88.8 $ (0.04) $ 192.9 88.8 $ 2.17 $ 98.0 88.8 $ 1.10 Diluted earnings per share represent the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. These potential shares include dilutive stock options and unissued restricted stock awards. Potential common shares are also considered antidilutive in the event of a net loss from operations. The following table summarizes the potential common shares not included in the computation of diluted earnings per share because their impact would have been antidilutive: Year Ended December 31, 2023 2022 2021 Employee stock options and awards 0.3 — — Antidilutive employee stock options and awards excluded based on reporting a net loss for the period 0.3 — — |
PREPAID EXPENSES AND OTHER
PREPAID EXPENSES AND OTHER | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER | PREPAID EXPENSES AND OTHER The components of prepaid expense and other current assets are as follows: December 31, December 31, Prepaid expenses $ 35.3 $ 32.7 Research & development tax credit receivables 22.0 29.2 Other 35.1 50.8 Prepaid expenses & other $ 92.4 $ 112.7 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for clinical facilities, general office spaces, vehicles, and office equipment. Leases have remaining lease terms of less than a year to 18 years, some of which include options to extend the leases for up to 6 years. The components of lease expense were as follows: For the Year Ended December 31, December 31, December 31, Operating lease cost $ 27.4 $ 24.9 $ 32.5 Supplemental cash flow information related to leases was as follows: For the Year Ended December 31, December 31, December 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (29.9) $ (28.1) $ (30.9) ROU assets obtained in exchange for lease obligations: Operating leases $ 64.2 $ 18.2 $ 25.6 Supplemental balance sheet information related to leases was as follows: December 31, December 31, Operating lease ROU assets (included in Property, plant and equipment, net) $ 78.2 $ 50.0 Short-term operating lease liabilities 19.5 23.3 Operating lease liabilities 66.5 40.1 Total operating lease liabilities $ 86.0 $ 63.4 Weighted Average Remaining Lease Term 9.2 years 4.2 years Weighted Average Discount Rate 5.1 % 3.2 % Maturities of lease liabilities are as follows: Year ended December 31, 2023 Operating Leases 2024 $ 22.5 2025 16.8 2026 11.3 2027 8.2 2028 7.5 Thereafter 43.1 Total lease payments $ 109.4 Less imputed interest (23.4) Less current portion (19.5) Total maturities, due beyond one year $ 66.5 There was $0.2 rent expense for short term leases with a term less than one year for the year ended December 31, 2023 and no rent expense for short term leases with a term less than one year for the years ended December 31, 2022 and 2021. Additionally, the Company earned $1.7, $— and $— in sublease income for the years ended December 31, 2023, 2022 and 2021. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET December 31, December 31, Land, buildings, and building improvements $ 6.0 $ 14.6 Machinery and equipment 77.3 74.4 Software 95.1 74.6 Leasehold improvements 72.1 30.0 Furniture and fixtures 15.2 8.6 Construction in progress 45.9 41.4 Operating lease ROU assets 78.2 50.0 389.8 293.6 Less accumulated depreciation (168.9) (128.7) $ 220.9 $ 164.9 Depreciation expense and amortization of property, plant and equipment, net was $32.6, $27.0 and $26.3 for the years ended December 31, 2023, 2022 and 2021, respectively, including software amortization of $11.6, $9.5 and $10.5 for the years ended December 31, 2023, 2022 and 2021, respectively. The Company’s property, plant and equipment, net by segment and geography as of December 31, 2023 is as follows: Clinical Services Enabling Services Total Geographic distribution of property, plant and equipment, net: North America $ 82.1 $ 40.3 $ 122.4 Europe 73.2 — 73.2 Other 25.3 — 25.3 Total property, plant and equipment, net $ 180.6 $ 40.3 $ 220.9 The Company’s property, plant and equipment, net by segment and geography as of December 31, 2022 is as follows: Clinical Services Enabling Services Total Geographic distribution of property, plant and equipment, net: North America $ 46.4 $ 29.0 $ 75.4 Europe 43.8 0.1 43.9 Other 45.6 — 45.6 Total property, plant and equipment, net $ 135.8 $ 29.1 $ 164.9 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company's goodwill and intangible assets are the result of historical acquisitions; primarily the acquisition of Covance in 2015 by Labcorp. Subsequent acquisitions of businesses were allocated to Fortrea based on the inclusion of the business activities using valuations at the time of acquisition. The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 are as follows: Clinical Services Enabling Services Total December 31, December 31, December 31, December 31, December 31, December 31, Balance as of January 1 $ 1,707.4 $ 1,791.0 $ 289.9 $ 289.9 $ 1,997.3 $ 2,080.9 Goodwill acquired during the year — — — — — — Foreign currency impact and other adjustments to goodwill 32.0 (83.6) — — 32.0 (83.6) Balance at end of year $ 1,739.4 $ 1,707.4 $ 289.9 $ 289.9 $ 2,029.3 $ 1,997.3 The components of identifiable intangible assets are as follows: December 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 1,209.7 $ (443.2) $ 766.5 $ 1,191.1 $ (376.7) $ 814.4 Technology 53.7 (50.5) 3.2 53.7 (47.8) 5.9 Other 13.3 (11.8) 1.5 13.3 (10.3) 3.0 Total $ 1,276.7 $ (505.5) $ 771.2 $ 1,258.1 $ (434.8) $ 823.3 Amortization of intangible assets was $63.8, $65.7 and $140.0 for the years ended December 31, 2023, 2022 and 2021 respectively. Amortization expense of intangible assets is estimated to be $64.2 in 2024, $61.3 in 2025, $60.5 in 2026, $60.5 in 2027, $53.5 in 2028, and $471.2 thereafter. In 2022, impairment |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT In connection with the Spin, Fortrea incurred indebtedness in an aggregate principal amount of approximately $1,640.0, which consisted of borrowings under senior secured term loan facilities and senior secured notes. Fortrea also entered into a $450.0 senior secured revolving credit facility. Fortrea used the proceeds from these debt transactions to make a cash distribution to the Former Parent as consideration for the assets that were contributed to the Company in connection with the Spin. The current portion of long-term debt at December 31, 2023 and December 31, 2022 consisted of the following: December 31, 2023 December 31, 2022 Current portion of senior secured term loan A facility due 2028 $ 25.0 $ — Current portion of senior secured term loan B facility due 2030 5.7 — Debt issuance costs (4.6) — Total short-term borrowings and current portion of long-term debt $ 26.1 $ — Long-term debt at December 31, 2023 and December 31, 2022 consisted of the following: December 31, 2023 December 31, 2022 7.5% senior notes due 2030 $ 570.0 $ — Senior secured term loan A due 2028 462.5 — Senior secured term loan B due 2030 561.5 — Debt issuance costs (28.1) — Total long-term debt $ 1,565.9 $ — Senior Notes On June 27, 2023, the Company issued $570.0 aggregate principal amount of 7.50% senior notes due 2030 (the “Notes"). Interest on these notes is payable semi-annually on January 1 and July 1 of each year. Net proceeds from the offering of the Notes were $560.2 after deducting expenses of the offering. Credit Facilities On June 30, 2023, Fortrea entered into a credit agreement (the “Credit Agreement”) providing for (i) a senior secured revolving credit facility in the principal amount of up to $450.0; (ii) a five-year $500.0 first lien senior secured term A loan facility; and (iii) a seven-year $570.0 first lien senior secured term B loan facility. The initial revolving facility includes a $75.0 swingline sub-facility and a $75.0 letter of credit sub-facility. The Company drew on the term A and term B loans on June 30, 2023. The net proceeds received for the term A and term B loans were $491.8 and $552.9, respectively after deducting underwriting discounts and other expenses. The term A and term B loans will mature on June 30, 2028 and June 30, 2030, respectively. The term loans accrue interest at a per annum rate equal to the sum of, at the option of the Company, a Base Rate or a Term SOFR Rate and the Applicable Margin as defined by the Credit Agreement. As of December 31, 2023, the effective interest rate on the term A loan and term B loan was 7.61% and 9.11%, respectively. The revolving credit facility is permitted, subject to certain covenant restrictions, to be used for general corporate purposes, including working capital and capital expenditures. There were no balances outstanding on the Company's current revolving credit facility and approximately $348.4 was available for borrowing as of December 31, 2023. As of December 31, 2023, the effective interest rate on the revolving credit facility, assuming a one month borrowing, was 7.61%. There is a commitment fee associated with the revolving credit facility of 0.35% (per annum and paid quarterly) and an annual $0.1 agency fee (paid in quarterly installments). The credit facility matures on June 30, 2028. Under the Credit Agreement, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for similarly rated borrowers, and the Company is required to maintain certain net leverage and interest coverage ratios. The Company is permitted to make adjustments, such as excluding certain costs, from the calculation of leverage and interest coverage ratios for compliance purposes. The Company was in compliance with all covenants in the Credit Agreement at December 31, 2023. There were no outstanding letters of credit under the Credit Agreement as of December 31, 2023. The scheduled payments of long-term debt at the end of 2023 are summarized as follows: Year ended December 31, 2023 2024 $ 30.7 2025 30.7 2026 30.7 2027 30.7 2028 393.2 Thereafter 1,108.7 Total scheduled principal payments $ 1,624.7 Less debt issuance costs (32.7) Less current portion (26.1) Long-term debt, due beyond one year $ 1,565.9 Fair Value Disclosures for Financial Instruments Not Carried at Fair Value The estimated fair values of term loans A and B and the Notes are determined based on the price that the Company would have had to pay to settle the liabilities. As these liabilities are not actively traded, they are classified as Level 2 fair value measurements. The estimated fair values of the Company’s term loans and the Notes were as follows: December 31, 2023 December 31, 2022 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value 7.5% senior notes due 2030 $ 570.0 $ 552.0 $ — $ — Senior secured term loan A due 2028 $ 487.5 $ 493.7 $ — $ — Senior secured term loan B due 2030 $ 567.2 $ 566.4 $ — $ — |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Summary of Derivative Instruments The Company addresses its exposure to market risks, principally the market risk associated with changes in interest rates and foreign currency exchange rates, through a controlled program of risk management that includes, from time to time, the use of derivative instruments such as foreign currency forward contracts (see “Foreign Currency Forward Contracts” section below) and interest rate swap agreements (see “Interest Rate Swaps” section below). The Company does not hold or issue derivative instruments for trading purposes. The derivative instrument contracts are with major investment grade financial institutions and the Company does not anticipate any material non-performance by any of the counterparties. The Company does not believe that its exposure to market risk is material to the Company’s financial position or results of operations. Interest rate swap agreements, which are used by the Company from time to time in the management of interest rate exposure, are accounted for at fair value. These derivative instruments are accounted for as cash flow hedges and recognized as assets and liabilities, as applicable, and classified as current or noncurrent based on the swap’s settlement dates. The derivative instruments have been assessed and are considered to be perfectly effective hedges and accordingly, changes in the fair value of the interest rate swaps are initially recorded in the consolidated and combined statements of comprehensive income. Cash flows from the interest rate swaps are included in operating activities. Foreign currency forward contracts, which are used by the Company to hedge the Company’s foreign currency exposure, are accounted for at fair value. As these contracts are short-term in nature and are not designated hedging instruments, changes in the fair value of the Company’s foreign currency forward contracts are recognized directly in earnings. Cash flows from the foreign currency forward contracts are included in operating activities. The fair value of the Company's interest rate swaps and foreign currency forward contracts are determined based on observable market inputs (Level 2). The table below presents the fair value of the Company’s derivatives on a gross basis and the balance sheet classification of those instruments: Fair Value of Derivative at December 31, 2023 December 31, 2022 Balance Sheet Classification Asset Liability Asset Liability Derivatives designated as hedging instruments: Interest rate swaps Other liabilities $ 0.7 $ 2.6 $ — $ — Derivatives not designated as hedging instruments: Foreign currency forward contracts Prepaid expenses and other $ 0.8 $ — $ — $ — Derivative Contracts Designated as Hedges Interest Rate Swaps On August 4 and August 7, 2023, respectively, the Company entered into two fixed-to-variable interest rate swap agreements for its senior secured term A loan facilities to hedge the cash flow variability associated with the Company’s floating interest rate exposure. The interest rate swaps, both which mature on December 31, 2026, had an aggregate notional amount of $150.0 at December 31, 2023, each a fixed interest rate of 4.20%, and each return variable interest rates based on one-month SOFR. Because these derivative instruments meet the criteria for hedge accounting, all related gains and losses are accumulated within other comprehensive income and are being reclassified to earnings as interest payments are recognized in the consolidated and combined statements of operations. The following table presents the pre-tax effects of cash flow hedges included in the Company's consolidated and combined statements of comprehensive income (loss): Pre-Tax Gain (Loss) Included in Other Comprehensive Income For the Years Ended December 31 2023 2022 2021 Interest rate swaps $ (1.5) $ — $ — The following table presents amounts reclassified out of accumulated other comprehensive loss and recognized in consolidated and combined statements of operations: Amounts Reclassified from Other Comprehensive Loss into Earnings For the Years Ended December 31 Statement of Operations Classification 2023 2022 2021 Interest rate swaps Interest expense $ (0.4) $ — $ — The estimated amount of pre-tax net losses included in other comprehensive loss that is expected to be reclassified into earnings over the twelve months following December 31, 2023, is $0.7. Refer to Note 16 – Accumulated Other Comprehensive Income (Loss) for the impact of the Company’s derivative instruments included in accumulated other comprehensive loss. Derivative Contracts Not Designated as Hedges Foreign Currency Forward Contracts The Company utilizes foreign currency forward contracts with external counterparties to hedge the Company’s exposure to foreign currencies with exposure predominantly to the Euro and British Pound. These contracts do not qualify for hedge accounting and are recognized as assets or liabilities at their fair value with changes in fair value recorded directly to earnings. The contracts are short-term in nature and the fair value of these contracts is based on market prices for comparable contracts. The aggregate notional value of these contracts was $458.3 at December 31, 2023. The following table presents a summary of the loss for derivative contracts not designated as hedges included in the Company's consolidated and combined statements of operations: Gain (Loss) on Derivatives Recognized in Earnings For the Years Ended December 31 Statement of Operations Classification 2023 2022 2021 Foreign currency Forward contracts Foreign exchange loss $ (0.8) $ — $ — |
ACCRUED EXPENSES AND OTHER
ACCRUED EXPENSES AND OTHER | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER | ACCRUED EXPENSES AND OTHER The components of accrued expenses and other current liabilities are as follows: December 31, 2023 December 31, 2022 Employee compensation and benefits $ 118.0 $ 123.0 Accrued pass through expenses 117.7 133.1 Accrued taxes 61.9 39.5 Accrued interest 22.5 — Other 36.0 27.1 $ 356.1 $ 322.7 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES See Note 2, Summary of Significant Accounting Policies for a description of the Company’s accounting policies and carve-out methodology on income taxes for the periods prior to the Spin. The sources of income before taxes, classified between domestic and foreign entities are as follows: 2023 2022 2021 Domestic $ (123.3) $ 114.9 $ 22.8 Foreign 124.4 122.1 113.6 Total pre-tax income $ 1.1 $ 237.0 $ 136.4 The provisions (benefits) for income taxes in the accompanying consolidated and combined statements of operations consist of the following: Years Ended December 31, 2023 2022 2021 Current: Federal $ 3.6 $ 18.6 $ 23.9 State 0.9 10.7 8.9 Foreign 40.5 31.3 35.8 $ 45.0 $ 60.6 $ 68.6 Deferred: Federal $ (24.3) $ (8.0) $ (27.9) State (4.0) (5.9) (4.7) Foreign (12.2) (2.6) 2.4 (40.5) (16.5) (30.2) Total provision for income taxes $ 4.5 $ 44.1 $ 38.4 The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows: Years Ended December 31, 2023 2022 2021 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of U.S. Federal income tax effect (276.1) 1.1 1.7 Foreign earnings taxed at rates different than the statutory U.S. rate 337.9 0.7 2.3 Permanent non-deductible items 18.7 (0.5) 0.7 Changes in valuation allowance (6.8) — — Employee benefits 146.8 (0.9) (0.7) Changes in enacted tax rates — 0.3 7.0 Net tax on U.S. international income inclusions 65.2 (2.3) (6.1) Change in uncertain tax positions 26.5 0.2 — R&D credit (244.6) (1.0) — Withholding tax 136.2 0.7 2.3 BEAT 168.6 — — Other 12.9 (0.7) — Effective rate 406.3 % 18.6 % 28.2 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2023 December 31, 2022 Deferred tax assets: Employee compensation and benefits $ 12.5 $ 14.9 Operating lease liability 7.8 4.5 Acquisition and restructuring reserves 0.9 3.1 Interest expense carryforward 14.1 — Capitalized R&D Costs 24.5 10.2 Loss and credit carryforwards, net 8.1 — Other 2.1 3.4 Total gross deferred tax assets 70.0 36.1 Less: valuation allowance (2.8) — Deferred tax assets, net of valuation allowance $ 67.2 $ 36.1 Deferred tax liabilities: Right of use asset $ (6.6) $ (2.1) Revenue recognition (6.2) (8.9) Intangible assets (187.5) (200.1) Property, plant and equipment (12.5) (8.3) Total gross deferred tax liabilities (212.8) (219.4) Net deferred tax liabilities $ (145.6) $ (183.3) Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets (“DTAs”). We have determined that the reversal of future taxable temporary differences corresponding to our deferred tax liabilities (“DTLs”) will provide a sufficient source of income for realization of our DTAs. Based on this evaluation, as of December 31, 2023, no valuation allowance has been recorded against our Federal DTAs. In the absence of future taxable income, reductions in our DTLs may result in the need for a valuation allowance in a subsequent period. The Company has gross state NOL carryforwards of $1,111.0, which have a full valuation allowance as of December 31, 2023. Of these NOLs, $953.3 expire between 2024 and 2043, and $157.7 having an indefinite carryforward. The Company has gross foreign net operating losses of $11.8, all of which are expected to be fully realized with either indefinite carryforward or expire between 2028 and 2043. The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions for the years ended December 31, 2023, 2022 and 2021: 2023 2022 2021 Balance as of January 1 $ 1.4 $ 2.1 $ 10.3 Decreases related to positions taken on prior year items (1.4) — (1.6) Increases related to positions taken on prior year items — 2.0 — Increases related to positions taken on current year items 0.3 0.2 1.0 Settlement of uncertain tax positions with tax authorities — (3.1) (7.6) Exchange (gain) loss — 0.2 — Balance as of December 31 $ 0.3 $ 1.4 $ 2.1 Unrecognized income tax benefits which relate to the Company’s business operations were $0.3, $1.4 and $2.1 at December 31, 2023, 2022 and 2021, respectively. It is anticipated that none of the unrecognized income tax benefits will change within the next 12 months. These changes are not expected to have a significant impact on the results of operations, cash flows or the financial position of the Company. The Company recognizes interest and penalties related to unrecognized income tax benefits in income tax expense. Accrued interest and penalties related to uncertain tax positions totaled $0.0, $0.1 and $2.2 as of December 31, 2023, 2022 and 2021, respectively. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $0.0, $(2.2) and $0.6, respectively, in interest and penalties expense. As of December 31, 2023, 2022 and 2021, there are $0.3, $1.4 and $4.3, respectively, of tax benefits, including interest and penalties, that, if recognized would favorably affect the effective income tax rate. The operations of the Company are subject to income tax examination by taxing authorities in the jurisdictions where Labcorp filed income tax returns previously and jurisdictions where the Company files tax returns after the Separation. The Company has substantially concluded all U.S. federal income tax matters for years through 2018, while it filed as part of the Labcorp consolidated group, and is currently under IRS examination for tax years 2019 and 2020. The Company has not yet been required to file a U.S. federal income tax return after the Separation. Substantially all material state and local and foreign income tax matters have been concluded through 2017 and 2018, respectively. |
STOCK COMPENSATION PLANS
STOCK COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK COMPENSATION PLANS | STOCK COMPENSATION PLANS Stock Incentive Plans Prior to the Separation, certain Company employees were covered by the Former Parent-sponsored stock compensation arrangements. The stock compensation expense for the period prior to the Separation has been derived from the equity awards granted by Labcorp to the Company’s employees who are specifically identified in the plans, as well as an allocation of expense related to corporate employees of Labcorp. The Former Parent-sponsored stock compensation arrangements are approved under the Laboratory Corporation of America Holdings 2016 Omnibus Incentive Plan (the “Labcorp Plan”). In June of 2023, Fortrea’s Board of Directors approved Fortrea’s Omnibus Incentive Plan and Employee Stock Purchase Plan (the “Plans”) and the current Board of Directors of Fortrea ratified the Plans by a unanimous written consent dated July 3, 2023. Under the Plans, the Company may grant incentive stock options, restricted stock units, and performance shares, as well as other forms of stock-based compensation to the Company’s employees, officers, and non-employee directors. On July 18, 2023, all Labcorp equity incentive awards held by Fortrea employees that were outstanding on the distribution date were converted to 2.5 shares of Fortrea restricted stock units and 0.1 shares of Fortrea performance shares. Additionally, during the remainder of 2023, the Company granted awards under the Plans, including restricted stock units, performance stock units, and stock options, as indicated below. As of December 31, 2023, 11.0 and 1.8 shares were authorized for future grants under Fortrea’s Omnibus Incentive Plan and Employee Stock Purchase Plan, respectively. The Company measures stock compensation cost for all equity awards at fair value on the date of grant and recognizes compensation expense over the service period for awards expected to vest. The fair value of restricted stock units (“RSUs”) is determined based on the number of shares granted and the quoted price of Fortrea’s common stock on the grant date. The grant date fair value of performance share awards is based on a Monte Carlo simulated fair value for the relative (as compared to the peer companies) total shareholder return component of the performance awards. Such value is recognized as an expense over the service period, net of estimated forfeitures and Fortrea’s determination of whether it is probable that the performance targets will be achieved. At the end of each reporting period, the Company reassesses the probability of achieving performance targets. The estimation of equity awards that will ultimately vest requires judgment and Fortrea considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Forfeitures are recognized as a reduction of compensation expense in earnings in the period in which they occur. Stock Options The following table summarizes grants of non-qualified options made by the Company to officers, key employees, or non-employee directors under all plans. Stock options are generally granted at an exercise price equal to or greater than the fair market price per share on the date of grant. Options vest ratably over a period of 3 years on the anniversaries of the grant date and have a contractual exercise period of 10 years subject to their earlier expiration or termination. Number of Options Weighted-Average Exercise Price per Option Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at June 30, 2023 — $ — Granted 0.8 $ 26.52 Exercised — $ — Cancelled — $ — Outstanding at December 31, 2023 0.8 $ 26.52 9.6 years $ 6.7 Exercisable at December 31, 2023 — $ — 0.0 years $ — The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2023. The Company uses the Black-Scholes model to calculate the fair value of stock options. The following table shows the weighted average grant-date fair values of options issued during the period and the weighted average assumptions that the Company used to develop the fair value estimates: Year Ended Weighted-average grant date fair value per option $ 12.51 Weighted-average expected life (in years) 6.3 Risk free interest rate 4.4 % Expected volatility 40.4 % Expected dividend yield — % The volatility used in the determination of the fair value of the stock options was based on analysis of the historical volatility of guideline public companies and factors specific to the Company. Restricted Stock Units and Performance Shares The Company grants RSUs to officers, key employees, and non-employee directors. RSUs typically vest annually in equal one-third increments beginning on the first anniversary of the grant (e.g., a share grant in 2023 represents a three-year award opportunity for the period of 2023-2025 and, if earned, vests fully (to the extent earned) in the first quarter of 2026). The Company grants performance shares (non-vested shares) to officers and key employees. Performance share awards are subject to a 3-year cliff vesting period in addition to certain revenue and adjusted EBITDA targets, the achievement of which may increase or decrease the number of shares which the grantee earns and therefore receives upon vesting. Unearned RSU and performance share compensation is amortized to expense, when probable, over the applicable vesting periods. The following table shows a summary of non-vested shares for the year ended December 31, 2023: Number of Shares Weighted-Average Grant Date Fair Value Restricted Stock Units Performance Shares Restricted Stock Units Performance Shares Non-vested at June 30, 2023 — — $ — $ — Converted 2.5 0.1 $ 34.20 $ 43.78 Granted 1.6 — $ 27.93 $ — Vested (0.1) — $ 34.60 $ — Forfeited (0.2) — $ 34.14 $ — Non-vested at December 31, 2023 3.8 0.1 $ 31.54 $ 43.78 For 2023, 2022 and 2021, total restricted stock, restricted stock unit and performance share compensation expense was $42.1, $23.1 and $25.1, respectively, including $2.3, $4.6 and $4.9 of expense related to corporate allocations. As of December 31, 2023, there was $95.6 of total unrecognized compensation cost related to non-vested restricted stock, restricted stock unit and performance share-based compensation arrangements granted under the Company's stock incentive plans. That cost is expected to be recognized over a weighted average period of 1.9 years and will be included in direct costs and selling, general and administrative expenses. All Stock Awards Total stock-based compensation expense and the associated income tax benefits recognized by the Company in the consolidated and combined statements of operations was as follows: Years Ended December 31, 2023 2022 2021 Direct costs $ 25.8 $ 14.6 $ 14.1 Selling, general and administrative 16.9 10.8 13.4 Stock compensation expense $ 42.7 $ 25.4 $ 27.5 Income tax benefits $ 7.8 $ 9.7 $ 6.5 Of the total stock-based compensation expense recognized by the Company for the years ended December 31, 2023, 2022 and 2021, $40.2, $20.3 and $22.1, respectively, related directly to Company employees and $2.5, $5.1 and $5.4, respectively, related to allocations of Labcorp’s corporate and shared employee stock compensation expenses. Stock compensation expense is included in direct costs and selling, general and administrative expenses in the combined statements of operations. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. These matters may include commercial and contract disputes, employee-related matters, and professional liability claims. In accordance with FASB ASC 450, Contingencies, the Company establishes reserves for claims and legal actions when those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, the Company does not establish reserves. The Company does not believe that any liabilities related to such claims and legal actions will have a material effect on its financial condition, results of operations or cash flows. The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its drug development support services. The drug development industry is, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations. Therefore, the applicable statutes and regulations could be interpreted or applied by a prosecutorial, regulatory, or judicial authority in a manner that would adversely affect the Company. Potential sanctions for violation of these statutes and regulations include significant civil and criminal penalties, fines, the loss of various licenses, certificates and authorizations, and/or additional liabilities from third-party claims. Fortrea obtains insurance coverage for certain catastrophic exposures as well as those risks required to be insured by law or contract. The Company is covered by those policies but is responsible for the uninsured portion of losses related primarily to general, professional and vehicle liability, certain medical costs and workers' compensation. The self-insured retentions are on a per-occurrence basis without any aggregate annual limit. Provisions for losses expected under these programs are recorded based upon the Company's estimates of the aggregated liability of claims incurred. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Unrealized Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ (140.2) $ (8.2) $ — $ (148.4) Current year adjustments (127.0) (0.6) — (127.6) Tax effect of adjustments — — — — Balance at December 31, 2022 $ (267.2) $ (8.8) $ — $ (276.0) Current year foreign exchange adjustments 57.6 — — 57.6 Current year benefit plan adjustments — (0.9) — (0.9) Unrealized gain (loss) on derivative instruments — — (1.5) (1.5) Amounts reclassified from accumulated other comprehensive income (loss) — — (0.4) (0.4) Tax effect of adjustments — 0.2 0.5 0.7 Transfers (to) from Former Parent $ — $ 2.1 $ — $ 2.1 Balance at December 31, 2023 $ (209.6) $ (7.4) $ (1.4) $ (218.4) |
PENSION AND POSTRETIREMENT PLAN
PENSION AND POSTRETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
PENSION AND POSTRETIREMENT PLANS | PENSION AND POSTRETIREMENT PLANS Defined Contribution Retirement Plans The Company has various U.S. defined contribution retirement plans (401K Plans). Under these 401K Plans, employees can contribute a portion of their salary to the plan and the Company makes minimum non-elective contributions and matching contributions, depending on the terms of the specific plan. On January 1, 2021, all of the 401K Plans were modified to provide for 100% match of employee contributions up to 5% of their salary. In addition to the U.S. 401K plans, there are other defined contribution plans outside of the U.S., primarily in the UK, EU and Asia-Pacific regions. Total expense for all defined contribution plans for the years ended December 31, 2023, 2022 and 2021 was $57.3, $54.9 and $57.7 respectively. Defined Benefit Pension Plans Company employees participate in a funded defined benefit pension plan in the United Kingdom (the “UK Plan”). The UK Plan provides benefits based on various criteria such as years of service and salary, and is closed to new entrants and the accrual of service credits is as of December 31, 2020. Net Periodic Benefit Costs The components of the net periodic benefit costs for the defined benefit pension plans are as follows: Years Ended December 31, 2023 2022 2021 Service cost for benefits earned $ 0.2 $ 0.2 $ 0.2 Interest cost on benefit obligation 1.6 1.0 0.9 Expected return on plan assets (1.7) (2.2) (2.0) Net amortization and deferral 0.2 0.1 0.2 Defined-benefit plan costs $ 0.3 $ (0.9) $ (0.7) Service costs are the only component of net periodic benefit costs recorded within Operating income. The amounts recognized in accumulated other comprehensive income(loss) are as follows: Years Ended December 31, 2023 2022 2021 Net actuarial loss in accumulated other comprehensive income (loss) $ (1.0) $ (0.6) $ 4.3 Change in Projected Benefit Obligation The change in the projected benefit obligation as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Balance at beginning of the year $ 32.7 $ 64.0 Service cost 0.2 0.2 Interest cost 1.6 1.0 Actuarial (gain) loss 1.9 (24.3) Benefits and administrative expenses paid (0.7) (2.0) Foreign currency exchange rate changes 1.9 (6.2) Balance at end of the year $ 37.6 $ 32.7 The accumulated benefit obligation as of December 31, 2023 and December 31, 2022 was $37.6 and $32.7, respectively. Change in Fair Value of Plan Assets The change in plan assets as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Balances at beginning of the year $ 30.7 $ 59.4 Business contributions 2.3 1.9 Actual return on plan assets 2.4 (22.8) Benefits and administrative expenses paid (0.7) (2.0) Foreign currency exchange rate changes 1.7 (5.8) Fair value of plan assets at end of year $ 36.4 $ 30.7 Change in Funded Status and Reconciliation of Amounts Recorded in the Balance Sheet The change in the funded status of the plan and a reconciliation of such funded status to the amounts reported in the combined balance sheet as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Funded status $ (1.2) $ (2.1) Recorded as: Other liabilities $ (1.2) $ (2.1) Assumptions Weighted average assumptions used to determine net periodic benefit costs are as follows: Years Ended December 31, 2023 2022 2021 Discount rate 4.9 % 1.9 % 1.3 % Salary increases N/A N/A N/A Expected long term rate of return 5.5 % 4.0 % 3.3 % Cash balance interest credit rate N/A N/A N/A A one percentage point decrease or increase in the discount rate would have resulted in no respective increase or decrease in 2023 retirement plan expense. Weighted average assumptions used to determine net periodic benefit obligations are as follows: Years Ended December 31, 2023 2022 Discount rate 4.5 % 4.9 % Salary increases N/A N/A The discount rate is determined using the weighted-average yields on high-quality fixed income securities that have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligation and generally increase pension expense in the following year; higher discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension expense. The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, the Business considers the composition of plan investments, historical returns earned, and expectations about the future. Actual asset over/under performance compared to expected returns will respectively decrease/increase unrecognized loss. The change in the unrecognized loss will change amortization cost in upcoming periods. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2023 pension expense of $(0.3). The Company evaluates other assumptions periodically, such as retirement age, mortality and turnover, and updates them as necessary to reflect the Business's actual experience and expectations for the future. Differences between actual results and assumptions utilized are recorded in Accumulated other comprehensive income each period. These differences are amortized into earnings over the remaining average future service of active participating employees or the expected life of inactive participants, as applicable. Plan Assets The fair values of the assets at December 31, 2023 by asset category are as follows: Asset Category Level of Valuation Input Fair Value Investments valued using NAV per share Total 2023 Cash and cash equivalents Level 1 $ 0.3 $ — $ 0.3 Annuities Level 3 10.7 — 10.7 Pooled investment funds — 25.4 25.4 Total fair value $ 11.0 $ 25.4 $ 36.4 The fair values of the assets at December 31, 2022, by asset category is as follows: Asset Category Level of Valuation Input Fair Value Investments valued using NAV per share Total 2022 Cash and cash equivalents Level 1 $ 0.4 $ — $ 0.4 Annuities Level 3 10.0 — 10.0 Pooled investment funds — 20.3 20.3 Total fair value $ 10.4 $ 20.3 $ 30.7 The fair market value of index funds and pooled investment funds are valued using the net asset value (NAV) unit price provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund. The fair value of annuity investments is based on discounted cash flow techniques using unobservable valuation inputs such as discount rates and actuarial mortality tables. Fair Value Measurement of Level 3 Pension Assets Annuities Balance at December 31, 2021 $ 16.6 Actual return on plan assets (6.6) Balance at December 31, 2022 $ 10.0 Actual return on plan assets 0.7 Balance at December 31, 2023 $ 10.7 Investment Policies Plan fiduciaries of various plans set investment policies and strategies, based on consultation with professional advisors, and oversee investment allocation, which includes selecting investment managers and setting long-term strategic targets. The primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range. The weighted average asset allocation of the plan assets as of December 31, 2023, by asset category is as follows: December 31, 2023 Equity securities 14.5 % Debt securities 55.3 % Annuities 29.5 % Real estate — % Other 0.7 % The weighted average target asset allocation of the plan assets is as follows: December 31, 2023 Equity securities 10.0% to 20.0% Debt securities 50.0% to 60.0% Annuities 25.0% to 35.0% Real estate —% to 10.0% Other —% to 5.0% Pension Funding and Cash Flows The Company expects to make approximately $1.9 in required contributions to its defined benefit pension plans during 2024. The Company targets funding the minimum required contributions but may make additional contributions into the pension plans in 2024, depending upon factors such as how the funded status of those plans change or to reduce the administrative costs of the plan. The estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows: 2024 $ 1.1 2025 1.2 2026 1.3 2027 1.8 2028 1.7 Years 2029 to 2033 $ 10.2 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Prior to the Separation on June 30, 2023, the consolidated and combined financial statements were prepared on a standalone basis and were derived from the consolidated financial statements and accounting records of Labcorp. The following discussion summarizes activity between the Company and Labcorp. Allocation of General Corporate and Other Expenses Prior to the Separation, the Company’s consolidated and combined statements of operations included expenses for certain centralized functions and other programs provided and administered by Labcorp that were charged directly to the Company. In addition, for purposes of preparing these consolidated and combined financial statements on a carve-out basis, a portion of Labcorp’s total corporate expenses were allocated to the Company. See Note 2 , Summary of Significant Accounting Policies for a discussion of the methodology used to allocate corporate-related costs for purposes of preparing these financial statements on a carve-out basis. The following table is a summary of corporate and other allocations for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 2022 2021 Direct costs, exclusive of depreciation and amortization $ 86.6 $ 166.6 $ 150.6 Selling, general and administrative expenses, exclusive of depreciation and amortization 105.0 207.9 146.0 Restructuring and other charges 0.2 0.7 1.8 Foreign exchange gain (loss) 2.2 6.8 5.9 Corporate and other allocations $ 194.0 $ 382.0 $ 304.3 Included in the aforementioned amounts are $147.6, $286.8 and $214.0 related to costs for certain centralized functions and programs provided and administered by Labcorp that were charged directly to the Company for the years ended December 31, 2023, 2022 and 2021, respectively. In addition, a portion of Labcorp’s total corporate expenses have been allocated to the Company for services from Labcorp. These costs were $46.4, $95.2 and $90.3 for the years ended December 31, 2023, 2022 and 2021, respectively. The allocations of foreign exchange gain (loss) represent the allocation of the results of hedging activities performed by Labcorp on behalf of the Company. The Company has arrangements with third parties where the services are subcontracted to Labcorp (and its affiliates that were not part of the Spin). The Company’s direct costs include items purchased from Labcorp totaling $48.8, $87.1 and $70.1 in 2023, 2022, and 2021, respectively. Hedging Activities Prior to the Separation, the Company did not enter into any derivative contracts with external counterparties. However, Labcorp entered into foreign currency forward contracts with external counterparties to hedge certain foreign currency transactions with exposure predominantly to the Euro and British Pound. These contracts did not qualify for hedge accounting and the changes in fair value are recorded directly to earnings. Earnings related to these contracts were included in the consolidated and combined statements of operations as part of corporate allocations. Refer to Note 11, Derivative Instruments and Hedging Activities , for information regarding derivative contracts entered into after the Separation. Net Transfers To and From Labcorp Net transfers to and from Labcorp are included within net parent investment on the consolidated and combined statements of changes in equity. The components of the transfers to and from Labcorp in 2023, 2022 and 2021 were as follows: Years Ended December 31, 2023 2022 2021 Special Payment to Former Parent $ (1,595.0) $ — $ — General financing activities (283.7) (365.3) (405.3) Corporate allocations 183.8 356.6 276.8 Stock compensation expense 10.2 25.4 27.5 Total net transfers (to) from parent $ (1,684.7) $ 16.7 $ (101.0) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Years Ended December 31, 2023 2022 2021 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 45.1 $ 0.4 $ 0.2 Income taxes, net of refunds 18.0 27.0 16.1 Disclosure of non-cash investing activities: Change in accrued property, plant and equipment (1.3) 1.8 (1.9) Disclosure of non-cash transfers to (from) Former Parent: Change in right-of-use lease assets 13.9 — — Change in property, plant and equipment net (27.7) — — |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The following tables are a summary of segment information for the years ended December 31, 2023, 2022 and 2021. The segment information is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief operating decision maker (“CODM”) for evaluating segment performance and deciding how to allocate resources to segments. The Fortrea Chief Executive Officer has been identified as the CODM. The CODM allocates resources and assesses performance based on the underlying businesses which determines the Company's operating segments. The Company reports its business in two reportable segments: Clinical Services, which provides phase I-IV clinical trials, including clinical pharmacology and comprehensive clinical development capabilities, and Enabling Services, which provides post-approval patient access services and technology enabled solutions to support clinical trials. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. The CODM evaluates performance using segment revenue and operating income. Segment asset information is not presented because it is not used by the CODM at the segment level. Revenues from external customers by reportable segment were as follows: Years Ended December 31, 2023 2022 2021 Revenues from external customers: Clinical Services $ 2,839.5 $ 2,825.4 $ 2,763.5 Enabling Services 269.5 270.7 294.0 Total revenues $ 3,109.0 $ 3,096.1 $ 3,057.5 Intersegment revenues, which were eliminated in consolidation, were as follows: Years Ended December 31, 2023 2022 2021 Intersegment revenues: Clinical Services $ 1.3 $ 1.3 $ 0.3 Enabling Services 8.6 8.3 10.0 Total revenues $ 9.9 $ 9.6 $ 10.3 Through the Spin, the condensed combined statements of operations include costs for certain centralized functions and programs provided and administered by Labcorp that were charged directly to the Company. These centralized functions and programs included, but were not limited to legal, tax, treasury, risk management, sales expenses, information technology, human resources, finance, supply chain, executive leadership and stock-based compensation. These additional allocations were reported as “corporate costs not allocated to segments” in the table below. After the Separation, the Company has allocated costs for certain centralized functions and programs to the Clinical Services and Enabling Services segments based on appropriate metrics such as revenues or headcount. The corporate costs not allocated to segments include the costs of centralized functions including corporate governance, executive management and related human resources, finance, legal, risk management, and information technology functions. Operating income of each segment represents revenues less directly identifiable expenses to arrive at operating income for the segment. Operating income by reportable segment was as follows: Years Ended December 31, 2023 2022 2021 Operating Income: Clinical Services $ 243.0 $ 413.4 $ 339.5 Enabling Services 11.4 24.4 39.0 Segment operating income 254.4 437.8 378.5 Corporate costs not allocated to segments (103.2) (95.9) (103.5) Amortization (63.8) (65.7) (140.0) Goodwill and other asset impairments — (9.8) — Restructuring and other charges (24.3) (30.5) (20.7) Total operating income (loss) $ 63.1 $ 235.9 $ 114.3 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On March 9, 2024, the Company, together with its wholly-owned subsidiary, Fortrea Inc. (“Seller”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Endeavor Buyer LLC, an affiliate of Arsenal Capital Partners, pursuant to which the Seller has agreed to sell assets relating to its Enabling Services Segment (the “Transaction”), including the sale of equity interests of Fortrea Patient Access Inc. and its subsidiaries and Endpoint Clinical, Inc. and its subsidiaries. The purchase price for the Transaction is $345.0, subject to customary purchase price adjustments, with $295.0 to be paid at closing and $50.0 to be paid upon achievement of certain transition-related milestones. The Transaction is targeted to close in the second quarter of 2024, subject to customary closing conditions and government approvals, as well as the parties entering into certain services and operating agreements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation Prior to June 30, 2023, Fortrea existed and functioned as part of the consolidated business of Former Parent. The Company’s financial statements for periods through the Spin reflect the historical financial position, results of operations and cash flows of the Company, for the periods presented, prepared on a “carve-out” basis and have been derived from the consolidated financial statements and accounting records of Labcorp using the historical results of operations and historical basis of assets and liabilities of the Company and reflect Labcorp’s net investment in the Company. The Company’s balance sheet as of December 31, 2023 is a consolidated balance sheet based on the financial position of Fortrea as a standalone company. All periods prior to the Spin include combined financial statements. The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this document as “financial statements.” The Company’s consolidated and combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated and combined financial statements do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the prior periods presented. The combined statements of operations include all revenues and costs directly attributable to Fortrea’s business. The combined statements of operations for prior periods also include costs for certain centralized functions and programs provided and administered by Labcorp that were allocated to Fortrea. These centralized functions and programs include, but are not limited to legal, tax, treasury, risk management, sales expenses, information technology, human resources, finance, supply chain, executive leadership and stock-based compensation. These expenses were allocated to Fortrea based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net revenues or headcount or other reasonable driver, as applicable. Fortrea considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, Fortrea during the prior periods presented. However, the allocations may not reflect the expenses Fortrea would have incurred as an independent company for the prior periods presented. Actual costs that may have been incurred if Fortrea had been a standalone company would depend on a number of factors, including, but not limited to, the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. For a period following the Spin some of these functions are provided by Labcorp. Labcorp utilizes a centralized approach to cash management and financing of its operations. The cash and cash equivalents held by Labcorp at the corporate level were not specifically identifiable to Fortrea and therefore have not been reflected in the Company’s combined balance sheet as of December 31, 2022. Cash and cash equivalents in the consolidated and combined balance sheets represent cash and cash equivalents held by the Company. As of December 31, 2022, the combined financial statements include certain assets and liabilities that have historically been held at the Labcorp corporate level but are specifically identifiable or otherwise attributable to Fortrea. Labcorp’s third-party long-term debt and the related interest expense have not been allocated to Fortrea for any of the periods presented because Fortrea was not the legal obligor of such debt. As of December 31, 2022, a Former Parent investment is shown in lieu of common stock and retained earnings accounts in the combined financial statements. The total net effect of the settlement of the transactions between the Company and Labcorp, exclusive of those historically settled in cash, is reflected in the combined statements of cash flows in cash flows from financing activities as net transfers (to) from Former Parent and in the consolidated and combined balance sheets as Former Parent investment. |
Consolidation | Basis of Financial Statement Presentation Prior to June 30, 2023, Fortrea existed and functioned as part of the consolidated business of Former Parent. The Company’s financial statements for periods through the Spin reflect the historical financial position, results of operations and cash flows of the Company, for the periods presented, prepared on a “carve-out” basis and have been derived from the consolidated financial statements and accounting records of Labcorp using the historical results of operations and historical basis of assets and liabilities of the Company and reflect Labcorp’s net investment in the Company. The Company’s balance sheet as of December 31, 2023 is a consolidated balance sheet based on the financial position of Fortrea as a standalone company. All periods prior to the Spin include combined financial statements. The Company’s consolidated and combined financial statements for all periods presented are referred to throughout this document as “financial statements.” The Company’s consolidated and combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated and combined financial statements do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the prior periods presented. The combined statements of operations include all revenues and costs directly attributable to Fortrea’s business. The combined statements of operations for prior periods also include costs for certain centralized functions and programs provided and administered by Labcorp that were allocated to Fortrea. These centralized functions and programs include, but are not limited to legal, tax, treasury, risk management, sales expenses, information technology, human resources, finance, supply chain, executive leadership and stock-based compensation. These expenses were allocated to Fortrea based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net revenues or headcount or other reasonable driver, as applicable. Fortrea considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to, or the benefit received by, Fortrea during the prior periods presented. However, the allocations may not reflect the expenses Fortrea would have incurred as an independent company for the prior periods presented. Actual costs that may have been incurred if Fortrea had been a standalone company would depend on a number of factors, including, but not limited to, the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. For a period following the Spin some of these functions are provided by Labcorp. Labcorp utilizes a centralized approach to cash management and financing of its operations. The cash and cash equivalents held by Labcorp at the corporate level were not specifically identifiable to Fortrea and therefore have not been reflected in the Company’s combined balance sheet as of December 31, 2022. Cash and cash equivalents in the consolidated and combined balance sheets represent cash and cash equivalents held by the Company. As of December 31, 2022, the combined financial statements include certain assets and liabilities that have historically been held at the Labcorp corporate level but are specifically identifiable or otherwise attributable to Fortrea. Labcorp’s third-party long-term debt and the related interest expense have not been allocated to Fortrea for any of the periods presented because Fortrea was not the legal obligor of such debt. As of December 31, 2022, a Former Parent investment is shown in lieu of common stock and retained earnings accounts in the combined financial statements. The total net effect of the settlement of the transactions between the Company and Labcorp, exclusive of those historically settled in cash, is reflected in the combined statements of cash flows in cash flows from financing activities as net transfers (to) from Former Parent and in the consolidated and combined balance sheets as Former Parent investment. |
Reclassification | Reclassification |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Company 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 reported periods. Significant estimates include revenue estimates, deferred tax assets, fair value of goodwill, amortization lives for acquired intangible assets, and the fair values of assets acquired and liabilities assumed in business combinations. Actual results could differ from those estimates. |
Recognition of Revenues and Contract costs | Recognition of Revenues The Company provides phase I through phase IV clinical development services to pharmaceutical, biotechnology, and medical device companies worldwide. A majority of the Company’s revenues are earned under contracts that are long term in nature, ranging in duration from a few months to many years. The majority of the Company's contracts contain a single performance obligation, as the Company provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another. For contracts that include multiple performance obligations, the Company allocates the contract value to the goods and services based on a customer price list, if available. If a price list is not available, the Company will estimate the transaction price using either market prices or an “expected cost plus margin” approach. The total contract value is estimated at the beginning of the contract and is equal to the amount expected to be billed to the customer. Other payments and billing adjustments may also factor into the calculation of total contract value, such as the reimbursement of out-of-pocket costs and volume-based rebates. These contracts generally take the form of fixed-price, fee-for-service or software-as-a-service arrangements subject to pricing adjustments based on changes in scope. Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that are specific to the service provided. In an output method, revenue is determined by dividing the actual units of output achieved by the total units of output required under the contract and multiplying that percentage by the total contract value. When using an input method, revenue is recognized by dividing the actual costs incurred by the total estimated cost expected to complete the contract and multiplying that percentage by the total contract value. Contract costs principally include direct labor and reimbursable out-of-pocket costs. The estimate of total costs expected to complete the contract requires significant judgment and estimates are based on various assumptions of events that often span several years. These estimates are reviewed periodically and any adjustments are recognized on a cumulative catch-up basis in the period they become known. Fee-for-service contracts are typically priced based on transaction volume or time and materials. For volume-based contracts the contract value is entirely variable and revenue is recognized as the specific product or service is completed. For services billed based on time and materials, revenue is recognized using the right to invoice practical expedient. Software as a service (“SaaS”) arrangements represent a single promise to provide continuous access to a hosted software platform. As each day of providing access to the platform is substantially the same, and the customer simultaneously receives and consumes the benefits as access is provided, the Company recognizes revenue using an output method based on time elapsed, which is on a straight-line basis over the course of the contracted SaaS hosting period. Contracts are often modified to account for changes in contract specifications and requirements. Generally, when contract modifications create new performance obligations, the modification is considered to be a separate contract and revenue is recognized prospectively. When contract modifications change existing performance obligations, the impact on the existing transaction price and measure of progress for the performance obligation to which it relates is generally recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Most contracts are terminable with or without cause by the customer, either immediately or upon notice. These contracts typically require payment to the Company of expenses to wind-down the study or project, fees earned to date and, in some cases, a termination fee or a payment to the Company of some portion of the fees or profits that could have been earned by the Company under the contract if it had not been terminated early. Termination fees are included in revenues when services are performed and realization is assured. Contract costs The Company incurs sales commissions in the process of obtaining contracts with customers, which are recoverable through the service fees in the contract. Sales commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term, along with related payroll tax expense. The amortization of commission expense is based on the weighted average contract duration for all commissionable awards in the respective business in which the commission expense is paid, which approximates the period over which goods and services are transferred to the customer. The amortization period of sales commissions ranges from approximately 1 to 4 years, depending on the business. For businesses that enter primarily short-term contracts, the Company applies the practical expedient which allows costs to obtain a contract to be expensed when incurred if the amortization period of the assets that would otherwise have been recognized is one year or less. Amortization of assets from sales commissions is included in selling, general, and administrative expense. The Company incurs costs to fulfill contracts with customers, which are recoverable through the service fees in the contract. Contract fulfillment costs include software implementation costs and setup costs for certain services. These costs are recognized as assets and amortized to direct costs over the expected term of the contract to which the implementation relates, which is the period over which services are expected to be provided to the customer. This period typically ranges from 2 to 5 years. |
Accounts Receivable, Unbilled Services and Unearned Revenue | Accounts Receivable, Unbilled Services and Unearned Revenue |
Reimbursable Out-of-Pocket Expenses | Reimbursable Out-of-Pocket Expenses |
Costs and Expenses | Costs and Expenses |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and unbilled services. The Company maintains cash and cash equivalents with various major financial institutions. These financial institutions are generally highly rated and geographically dispersed. The Company evaluates the relative credit standing of these financial institutions and has not sustained credit losses from instruments held at financial institutions. Substantially all of the Company’s accounts receivable and unbilled services are with companies in the pharmaceutical, biotechnology and medical device industries. As of December 31, 2023, two pharmaceutical companies accounted for approximately 16.0% and 10.7% of the Company’s combined gross accounts receivable and unbilled services. For the year ended December 31, 2022, one pharmaceutical company accounted for approximately 10.5% of the Company's combined gross accounts receivable and unbilled services. Additionally, for the year ended December 31, 2023, one customer accounted for approximately 10.6% of revenue, and for the years ended December 31, 2022 and 2021, no customer accounted for more than 10% of revenues. Concentrations of credit risk are mitigated due to the number of the Company’s customers, as well as their dispersion across many different geographic regions. Additionally, the Company applies assumptions and judgments, including historical collection experience and reasonable and supportable forecasts, for assessing collectability and determining allowances for doubtful accounts. |
Stock Compensation Plans | Stock Compensation Plans |
Cash Equivalents | Cash Equivalents Cash and cash equivalents consist of highly liquid instruments, such as commercial paper, time deposits, and other money market instruments, which have maturities when purchased of three months or less. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation and amortization expense is computed on all classes of assets based on their estimated useful lives, as indicated below, using the straight-line method. Years Buildings and building improvements 10 - 35 Machinery and equipment 3 - 10 Furniture and fixtures 5 - 10 Software 3 - 10 Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related leases. Expenditures for repairs and maintenance are charged to operations as incurred. Retirements, sales and other disposals of assets are recorded by removing the cost and accumulated depreciation from the related accounts with any resulting gain or loss reflected in the consolidated and combined statements of operations. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes purchased software that is ready for service and capitalizes software development costs incurred on significant projects starting from the time that the preliminary project stage is completed and the Company commits to funding a project until the project is substantially complete and the software is ready for its intended use. Other computer software maintenance costs related to software development are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful life of the underlying system ranging from three |
Goodwill | Goodwill The Company assesses goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The annual impairment test for goodwill includes an option to perform a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying value. Reporting units are businesses with discrete financial information that is available and reviewed by management. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. The Company may also choose to bypass the qualitative assessment for any reporting unit in its goodwill assessment and proceed directly to performing the quantitative assessment. The Company recognizes an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. In the qualitative assessment, the Company considers relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate changes, and (vi) changes in products or services offered by the reporting unit. If applicable, performance in recent years is compared to forecasts included in prior quantitative valuations. Based on the results of the qualitative assessment, if the Company concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying values of the reporting unit, then no quantitative assessment is performed. The quantitative assessment includes the estimation of the fair value of each reporting unit as compared to the carrying value of the reporting unit. The Company estimates the fair value of a reporting unit using both income-based and market-based valuation methods. The income-based approach is based on the reporting unit's forecasted future cash flows that are discounted to the present value using the reporting unit's weighted average cost of capital. For the market-based approach, the Company utilizes a number of factors such as operating results, business plans, market multiples, and present value techniques. Based upon the range of estimated values developed from the income and market-based methods, the Company determines the estimated fair value for the reporting unit. If the estimated fair value of the reporting unit exceeds the carrying value, the goodwill is not impaired and no further review is required. Goodwill is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Recoverability of assets to be held and used is determined by the Company at the level for which there are identifiable cash flows, by comparison of the carrying amount of the assets to future undiscounted net cash flows before interest expense and income taxes expected to be generated by the assets. Impairment, if any, is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets (based on market prices in an active market or on discounted cash flows). Assets to be disposed of are reported at the lower of the carrying amount or fair value. |
Intangible Assets | Intangible Assets Intangible assets are amortized on a straight-line basis over the expected periods to be benefited, as set forth in the table below. Years Customer relationships 9 - 25 Technology 2 - 13 Non-compete agreements 3 - 5 Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. |
Leases | Leases All leases with a lease term greater than 12 months, regardless of lease type classification, are recorded as an obligation on the balance sheet with a corresponding right-of-use asset. Leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments. The classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. |
Income Taxes | Income Taxes |
Derivative Financial Instruments | Derivative Financial Instruments The Company addresses its exposure to market risks, principally the market risk associated with changes in interest rates and currency exchange rates, through a controlled program of risk management that includes, from time to time, the use of derivative financial instruments. The Company does not hold or issue derivative financial instruments for trading purposes. The Company does not believe that its exposure to market risk is material to the Company’s financial position or results of operations. Interest rate swap agreements, which are used by the Company from time to time in the management of interest rate exposure, are accounted for at fair value. These derivative instruments are accounted for as cash flow hedges and recognized as assets and liabilities, as applicable, and classified as current or noncurrent based on the swap’s settlement dates. The derivative instruments have been assessed and are considered to be perfectly effective hedges and accordingly, changes in the fair value of the interest rate swaps are initially recorded in the condensed consolidated and combined statements of comprehensive income. Cash flows from the interest rate swaps are included in operating activities. Foreign currency forward contracts, which are used by the Company to hedge the Company’s foreign currency exposure, are accounted for at fair value. These contracts are short-term in nature and are not designated hedging instruments; therefore changes in the fair value of the Company’s foreign currency forward contracts are recognized directly in earnings. Cash flows from the foreign currency forward contracts are included in operating activities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements for financial assets and liabilities are determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered fair value hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2), and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). |
Foreign Currencies | Foreign Currencies |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net earnings including the impact of dilutive adjustments by the weighted average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s stock options, restricted stock units, and performance share awards. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements. The new guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included in the reported measure of segment profit or loss. It does not change the definition of a segment or the guidance for determining reportable segments. The new guidance will be effective for the Company in the annual period beginning January 1, 2024 and in 2025 for interim periods. The Company is assessing the impacts of this ASU on its disclosures within the consolidated financial statements. In December 2023, the FASB issued guidance to require qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment are recorded at cost. Depreciation and amortization expense is computed on all classes of assets based on their estimated useful lives, as indicated below, using the straight-line method. Years Buildings and building improvements 10 - 35 Machinery and equipment 3 - 10 Furniture and fixtures 5 - 10 Software 3 - 10 December 31, December 31, Land, buildings, and building improvements $ 6.0 $ 14.6 Machinery and equipment 77.3 74.4 Software 95.1 74.6 Leasehold improvements 72.1 30.0 Furniture and fixtures 15.2 8.6 Construction in progress 45.9 41.4 Operating lease ROU assets 78.2 50.0 389.8 293.6 Less accumulated depreciation (168.9) (128.7) $ 220.9 $ 164.9 |
Schedule of Intangible Assets | Intangible assets are amortized on a straight-line basis over the expected periods to be benefited, as set forth in the table below. Years Customer relationships 9 - 25 Technology 2 - 13 Non-compete agreements 3 - 5 The components of identifiable intangible assets are as follows: December 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 1,209.7 $ (443.2) $ 766.5 $ 1,191.1 $ (376.7) $ 814.4 Technology 53.7 (50.5) 3.2 53.7 (47.8) 5.9 Other 13.3 (11.8) 1.5 13.3 (10.3) 3.0 Total $ 1,276.7 $ (505.5) $ 771.2 $ 1,258.1 $ (434.8) $ 823.3 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue by Segment and Geography | The Company’s revenue by segment and geography for the years ended December 31, 2023, 2022 and 2021 is as follows: Year Ended December 31, 2023 Europe North America Other Total Clinical Services $ 827.5 $ 1,395.4 $ 616.6 $ 2,839.5 Enabling Services — 268.1 1.4 269.5 Total $ 827.5 $ 1,663.5 $ 618.0 $ 3,109 Year Ended December 31, 2022 Europe North America Other Total Clinical Services $ 841.9 $ 1,403.9 $ 579.6 $ 2,825.4 Enabling Services — 268.6 2.1 270.7 Total $ 841.9 $ 1,672.5 $ 581.7 $ 3,096.1 Year Ended December 31, 2021 Europe North America Other Total Clinical Services $ 868.4 $ 1,357.6 $ 537.5 $ 2,763.5 Enabling Services — 292.0 2.0 294.0 Total $ 868.4 $ 1,649.6 $ 539.5 $ 3,057.5 |
Summary of Capitalized Contract Cost | The following table provides information about contract asset balances: December 31, 2023 December 31, 2022 Sales commission assets $ 16.4 $ 18.6 Deferred contract costs 12.7 14.8 Total $ 29.1 $ 33.4 |
Schedule of Accounts Receivable, Unbilled Services and Unearned Revenue | The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers: December 31, 2023 December 31, 2022 Accounts receivable $ 481.0 $ 449.2 Unbilled services 603.4 585.7 Less: allowance for credit losses (32.3) (12.7) Total $ 1,052.1 $ 1,022.2 Unearned revenue $ 268.8 $ 271.5 |
Summary of Rollforward of Allowance for Credit Losses | The rollforward for the allowance for credit losses for the years ended December 31, 2023 and 2022, is as follows: Accounts Receivable and Unbilled Services Allowance for credit losses as of December 31, 2021 $ 11.7 Credit loss expense 3.4 Write-offs (2.4) Allowance for credit losses as of December 31, 2022 $ 12.7 Credit loss expense 27.8 Write-offs (8.2) Allowance for credit losses as of December 31, 2023 $ 32.3 |
RESTRUCTURING AND OTHER CHARG_2
RESTRUCTURING AND OTHER CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Charges | The Company recorded restructuring and other charges as follows: Years Ended December 31, 2023 2022 2021 Restructuring charges $ 23.9 $ 27.5 $ 16.1 Impairment of facility related assets 0.2 2.3 2.8 Restructuring charges allocated from Former Parent 0.2 0.7 1.8 Total $ 24.3 $ 30.5 $ 20.7 The following represents the Company’s restructuring accrual activities for the periods indicated: Severance and Lease and Other Total Balance as of December 31, 2020 $ 0.6 $ 2.7 $ 3.3 Restructuring charges 3.7 13.1 16.8 Reduction of prior restructuring accruals (0.1) (0.6) (0.7) Cash payments and other adjustments (3.6) (12.7) (16.3) Balance as of December 31, 2021 0.6 2.5 3.1 Restructuring charges 15.9 11.8 27.7 Reduction of prior restructuring accruals (0.2) — (0.2) Cash payments and other adjustments (14.4) (9.3) (23.7) Balance as of December 31, 2022 1.9 5.0 6.9 Restructuring charges 20.0 4.3 24.3 Reduction of prior restructuring accruals — — — Cash payments and other adjustments (20.6) (5.9) (26.5) Balance as of December 31, 2023 $ 1.3 $ 3.4 $ 4.7 Current $ 2.1 Non-current 2.6 $ 4.7 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic Earnings per Share to Diluted Earnings per Share | The following represents a reconciliation of basic earnings per share to diluted earnings per share. Year ended December 31, 2023 2022 2021 Earnings Shares Per Share Amount Earnings Shares Per Share Amount Earnings Shares Per Share Amount Basic earnings per share: Net earnings $ (3.4) 88.8 $ (0.04) $ 192.9 88.8 $ 2.17 $ 98.0 88.8 $ 1.10 Dilutive effect of employee stock options & awards — — — — — — — — — Net earnings including impact of dilutive adjustments $ (3.4) 88.8 $ (0.04) $ 192.9 88.8 $ 2.17 $ 98.0 88.8 $ 1.10 |
Schedule of Antidilutive Securities Excluded from Computation | The following table summarizes the potential common shares not included in the computation of diluted earnings per share because their impact would have been antidilutive: Year Ended December 31, 2023 2022 2021 Employee stock options and awards 0.3 — — Antidilutive employee stock options and awards excluded based on reporting a net loss for the period 0.3 — — |
PREPAID EXPENSES AND OTHER (Tab
PREPAID EXPENSES AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Prepaid Expense and Other Current Assets | The components of prepaid expense and other current assets are as follows: December 31, December 31, Prepaid expenses $ 35.3 $ 32.7 Research & development tax credit receivables 22.0 29.2 Other 35.1 50.8 Prepaid expenses & other $ 92.4 $ 112.7 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expense and Supplemental Cash Flow Information | The components of lease expense were as follows: For the Year Ended December 31, December 31, December 31, Operating lease cost $ 27.4 $ 24.9 $ 32.5 Supplemental cash flow information related to leases was as follows: For the Year Ended December 31, December 31, December 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (29.9) $ (28.1) $ (30.9) ROU assets obtained in exchange for lease obligations: Operating leases $ 64.2 $ 18.2 $ 25.6 |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: December 31, December 31, Operating lease ROU assets (included in Property, plant and equipment, net) $ 78.2 $ 50.0 Short-term operating lease liabilities 19.5 23.3 Operating lease liabilities 66.5 40.1 Total operating lease liabilities $ 86.0 $ 63.4 Weighted Average Remaining Lease Term 9.2 years 4.2 years Weighted Average Discount Rate 5.1 % 3.2 % |
Schedule of Maturity of Lease Liabilities | Maturities of lease liabilities are as follows: Year ended December 31, 2023 Operating Leases 2024 $ 22.5 2025 16.8 2026 11.3 2027 8.2 2028 7.5 Thereafter 43.1 Total lease payments $ 109.4 Less imputed interest (23.4) Less current portion (19.5) Total maturities, due beyond one year $ 66.5 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment are recorded at cost. Depreciation and amortization expense is computed on all classes of assets based on their estimated useful lives, as indicated below, using the straight-line method. Years Buildings and building improvements 10 - 35 Machinery and equipment 3 - 10 Furniture and fixtures 5 - 10 Software 3 - 10 December 31, December 31, Land, buildings, and building improvements $ 6.0 $ 14.6 Machinery and equipment 77.3 74.4 Software 95.1 74.6 Leasehold improvements 72.1 30.0 Furniture and fixtures 15.2 8.6 Construction in progress 45.9 41.4 Operating lease ROU assets 78.2 50.0 389.8 293.6 Less accumulated depreciation (168.9) (128.7) $ 220.9 $ 164.9 |
Schedule of Property, Plant and Equipment by Geographic Areas | The Company’s property, plant and equipment, net by segment and geography as of December 31, 2023 is as follows: Clinical Services Enabling Services Total Geographic distribution of property, plant and equipment, net: North America $ 82.1 $ 40.3 $ 122.4 Europe 73.2 — 73.2 Other 25.3 — 25.3 Total property, plant and equipment, net $ 180.6 $ 40.3 $ 220.9 The Company’s property, plant and equipment, net by segment and geography as of December 31, 2022 is as follows: Clinical Services Enabling Services Total Geographic distribution of property, plant and equipment, net: North America $ 46.4 $ 29.0 $ 75.4 Europe 43.8 0.1 43.9 Other 45.6 — 45.6 Total property, plant and equipment, net $ 135.8 $ 29.1 $ 164.9 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 are as follows: Clinical Services Enabling Services Total December 31, December 31, December 31, December 31, December 31, December 31, Balance as of January 1 $ 1,707.4 $ 1,791.0 $ 289.9 $ 289.9 $ 1,997.3 $ 2,080.9 Goodwill acquired during the year — — — — — — Foreign currency impact and other adjustments to goodwill 32.0 (83.6) — — 32.0 (83.6) Balance at end of year $ 1,739.4 $ 1,707.4 $ 289.9 $ 289.9 $ 2,029.3 $ 1,997.3 |
Schedule of Intangible Assets | Intangible assets are amortized on a straight-line basis over the expected periods to be benefited, as set forth in the table below. Years Customer relationships 9 - 25 Technology 2 - 13 Non-compete agreements 3 - 5 The components of identifiable intangible assets are as follows: December 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 1,209.7 $ (443.2) $ 766.5 $ 1,191.1 $ (376.7) $ 814.4 Technology 53.7 (50.5) 3.2 53.7 (47.8) 5.9 Other 13.3 (11.8) 1.5 13.3 (10.3) 3.0 Total $ 1,276.7 $ (505.5) $ 771.2 $ 1,258.1 $ (434.8) $ 823.3 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The current portion of long-term debt at December 31, 2023 and December 31, 2022 consisted of the following: December 31, 2023 December 31, 2022 Current portion of senior secured term loan A facility due 2028 $ 25.0 $ — Current portion of senior secured term loan B facility due 2030 5.7 — Debt issuance costs (4.6) — Total short-term borrowings and current portion of long-term debt $ 26.1 $ — Long-term debt at December 31, 2023 and December 31, 2022 consisted of the following: December 31, 2023 December 31, 2022 7.5% senior notes due 2030 $ 570.0 $ — Senior secured term loan A due 2028 462.5 — Senior secured term loan B due 2030 561.5 — Debt issuance costs (28.1) — Total long-term debt $ 1,565.9 $ — |
Schedule Of Long-Term Debt Maturities | The scheduled payments of long-term debt at the end of 2023 are summarized as follows: Year ended December 31, 2023 2024 $ 30.7 2025 30.7 2026 30.7 2027 30.7 2028 393.2 Thereafter 1,108.7 Total scheduled principal payments $ 1,624.7 Less debt issuance costs (32.7) Less current portion (26.1) Long-term debt, due beyond one year $ 1,565.9 |
Schedule of Estimated Fair Value of Debt | The estimated fair values of the Company’s term loans and the Notes were as follows: December 31, 2023 December 31, 2022 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value 7.5% senior notes due 2030 $ 570.0 $ 552.0 $ — $ — Senior secured term loan A due 2028 $ 487.5 $ 493.7 $ — $ — Senior secured term loan B due 2030 $ 567.2 $ 566.4 $ — $ — |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The table below presents the fair value of the Company’s derivatives on a gross basis and the balance sheet classification of those instruments: Fair Value of Derivative at December 31, 2023 December 31, 2022 Balance Sheet Classification Asset Liability Asset Liability Derivatives designated as hedging instruments: Interest rate swaps Other liabilities $ 0.7 $ 2.6 $ — $ — Derivatives not designated as hedging instruments: Foreign currency forward contracts Prepaid expenses and other $ 0.8 $ — $ — $ — The following table presents the pre-tax effects of cash flow hedges included in the Company's consolidated and combined statements of comprehensive income (loss): Pre-Tax Gain (Loss) Included in Other Comprehensive Income For the Years Ended December 31 2023 2022 2021 Interest rate swaps $ (1.5) $ — $ — The following table presents amounts reclassified out of accumulated other comprehensive loss and recognized in consolidated and combined statements of operations: Amounts Reclassified from Other Comprehensive Loss into Earnings For the Years Ended December 31 Statement of Operations Classification 2023 2022 2021 Interest rate swaps Interest expense $ (0.4) $ — $ — The following table presents a summary of the loss for derivative contracts not designated as hedges included in the Company's consolidated and combined statements of operations: Gain (Loss) on Derivatives Recognized in Earnings For the Years Ended December 31 Statement of Operations Classification 2023 2022 2021 Foreign currency Forward contracts Foreign exchange loss $ (0.8) $ — $ — |
ACCRUED EXPENSES AND OTHER (Tab
ACCRUED EXPENSES AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued and Other Current Liabilities | The components of accrued expenses and other current liabilities are as follows: December 31, 2023 December 31, 2022 Employee compensation and benefits $ 118.0 $ 123.0 Accrued pass through expenses 117.7 133.1 Accrued taxes 61.9 39.5 Accrued interest 22.5 — Other 36.0 27.1 $ 356.1 $ 322.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The sources of income before taxes, classified between domestic and foreign entities are as follows: 2023 2022 2021 Domestic $ (123.3) $ 114.9 $ 22.8 Foreign 124.4 122.1 113.6 Total pre-tax income $ 1.1 $ 237.0 $ 136.4 |
Schedule of Components of Income Tax Expense (Benefit) | The provisions (benefits) for income taxes in the accompanying consolidated and combined statements of operations consist of the following: Years Ended December 31, 2023 2022 2021 Current: Federal $ 3.6 $ 18.6 $ 23.9 State 0.9 10.7 8.9 Foreign 40.5 31.3 35.8 $ 45.0 $ 60.6 $ 68.6 Deferred: Federal $ (24.3) $ (8.0) $ (27.9) State (4.0) (5.9) (4.7) Foreign (12.2) (2.6) 2.4 (40.5) (16.5) (30.2) Total provision for income taxes $ 4.5 $ 44.1 $ 38.4 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows: Years Ended December 31, 2023 2022 2021 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of U.S. Federal income tax effect (276.1) 1.1 1.7 Foreign earnings taxed at rates different than the statutory U.S. rate 337.9 0.7 2.3 Permanent non-deductible items 18.7 (0.5) 0.7 Changes in valuation allowance (6.8) — — Employee benefits 146.8 (0.9) (0.7) Changes in enacted tax rates — 0.3 7.0 Net tax on U.S. international income inclusions 65.2 (2.3) (6.1) Change in uncertain tax positions 26.5 0.2 — R&D credit (244.6) (1.0) — Withholding tax 136.2 0.7 2.3 BEAT 168.6 — — Other 12.9 (0.7) — Effective rate 406.3 % 18.6 % 28.2 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2023 December 31, 2022 Deferred tax assets: Employee compensation and benefits $ 12.5 $ 14.9 Operating lease liability 7.8 4.5 Acquisition and restructuring reserves 0.9 3.1 Interest expense carryforward 14.1 — Capitalized R&D Costs 24.5 10.2 Loss and credit carryforwards, net 8.1 — Other 2.1 3.4 Total gross deferred tax assets 70.0 36.1 Less: valuation allowance (2.8) — Deferred tax assets, net of valuation allowance $ 67.2 $ 36.1 Deferred tax liabilities: Right of use asset $ (6.6) $ (2.1) Revenue recognition (6.2) (8.9) Intangible assets (187.5) (200.1) Property, plant and equipment (12.5) (8.3) Total gross deferred tax liabilities (212.8) (219.4) Net deferred tax liabilities $ (145.6) $ (183.3) |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions for the years ended December 31, 2023, 2022 and 2021: 2023 2022 2021 Balance as of January 1 $ 1.4 $ 2.1 $ 10.3 Decreases related to positions taken on prior year items (1.4) — (1.6) Increases related to positions taken on prior year items — 2.0 — Increases related to positions taken on current year items 0.3 0.2 1.0 Settlement of uncertain tax positions with tax authorities — (3.1) (7.6) Exchange (gain) loss — 0.2 — Balance as of December 31 $ 0.3 $ 1.4 $ 2.1 |
STOCK COMPENSATION PLANS (Table
STOCK COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Number of Options Weighted-Average Exercise Price per Option Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at June 30, 2023 — $ — Granted 0.8 $ 26.52 Exercised — $ — Cancelled — $ — Outstanding at December 31, 2023 0.8 $ 26.52 9.6 years $ 6.7 Exercisable at December 31, 2023 — $ — 0.0 years $ — |
Schedule of Fair Value Estimates | The Company uses the Black-Scholes model to calculate the fair value of stock options. The following table shows the weighted average grant-date fair values of options issued during the period and the weighted average assumptions that the Company used to develop the fair value estimates: Year Ended Weighted-average grant date fair value per option $ 12.51 Weighted-average expected life (in years) 6.3 Risk free interest rate 4.4 % Expected volatility 40.4 % Expected dividend yield — % |
Schedule of Restricted Stock Units and Performance Shares | The following table shows a summary of non-vested shares for the year ended December 31, 2023: Number of Shares Weighted-Average Grant Date Fair Value Restricted Stock Units Performance Shares Restricted Stock Units Performance Shares Non-vested at June 30, 2023 — — $ — $ — Converted 2.5 0.1 $ 34.20 $ 43.78 Granted 1.6 — $ 27.93 $ — Vested (0.1) — $ 34.60 $ — Forfeited (0.2) — $ 34.14 $ — Non-vested at December 31, 2023 3.8 0.1 $ 31.54 $ 43.78 |
Schedule of Share-Based Compensation Expense | Total stock-based compensation expense and the associated income tax benefits recognized by the Company in the consolidated and combined statements of operations was as follows: Years Ended December 31, 2023 2022 2021 Direct costs $ 25.8 $ 14.6 $ 14.1 Selling, general and administrative 16.9 10.8 13.4 Stock compensation expense $ 42.7 $ 25.4 $ 27.5 Income tax benefits $ 7.8 $ 9.7 $ 6.5 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Unrealized Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ (140.2) $ (8.2) $ — $ (148.4) Current year adjustments (127.0) (0.6) — (127.6) Tax effect of adjustments — — — — Balance at December 31, 2022 $ (267.2) $ (8.8) $ — $ (276.0) Current year foreign exchange adjustments 57.6 — — 57.6 Current year benefit plan adjustments — (0.9) — (0.9) Unrealized gain (loss) on derivative instruments — — (1.5) (1.5) Amounts reclassified from accumulated other comprehensive income (loss) — — (0.4) (0.4) Tax effect of adjustments — 0.2 0.5 0.7 Transfers (to) from Former Parent $ — $ 2.1 $ — $ 2.1 Balance at December 31, 2023 $ (209.6) $ (7.4) $ (1.4) $ (218.4) |
PENSION AND POSTRETIREMENT PL_2
PENSION AND POSTRETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | Net Periodic Benefit Costs The components of the net periodic benefit costs for the defined benefit pension plans are as follows: Years Ended December 31, 2023 2022 2021 Service cost for benefits earned $ 0.2 $ 0.2 $ 0.2 Interest cost on benefit obligation 1.6 1.0 0.9 Expected return on plan assets (1.7) (2.2) (2.0) Net amortization and deferral 0.2 0.1 0.2 Defined-benefit plan costs $ 0.3 $ (0.9) $ (0.7) |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The amounts recognized in accumulated other comprehensive income(loss) are as follows: Years Ended December 31, 2023 2022 2021 Net actuarial loss in accumulated other comprehensive income (loss) $ (1.0) $ (0.6) $ 4.3 |
Schedule of Changes in Projected Benefit Obligations | The change in the projected benefit obligation as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Balance at beginning of the year $ 32.7 $ 64.0 Service cost 0.2 0.2 Interest cost 1.6 1.0 Actuarial (gain) loss 1.9 (24.3) Benefits and administrative expenses paid (0.7) (2.0) Foreign currency exchange rate changes 1.9 (6.2) Balance at end of the year $ 37.6 $ 32.7 |
Schedule of Changes in Fair Value of Plan Assets | The change in plan assets as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Balances at beginning of the year $ 30.7 $ 59.4 Business contributions 2.3 1.9 Actual return on plan assets 2.4 (22.8) Benefits and administrative expenses paid (0.7) (2.0) Foreign currency exchange rate changes 1.7 (5.8) Fair value of plan assets at end of year $ 36.4 $ 30.7 |
Schedule of Net Funded Status | The change in the funded status of the plan and a reconciliation of such funded status to the amounts reported in the combined balance sheet as of December 31, 2023 and December 31, 2022, is as follows: Years Ended December 31, 2023 2022 Funded status $ (1.2) $ (2.1) Recorded as: Other liabilities $ (1.2) $ (2.1) |
Schedule of Assumptions | Weighted average assumptions used to determine net periodic benefit costs are as follows: Years Ended December 31, 2023 2022 2021 Discount rate 4.9 % 1.9 % 1.3 % Salary increases N/A N/A N/A Expected long term rate of return 5.5 % 4.0 % 3.3 % Cash balance interest credit rate N/A N/A N/A Weighted average assumptions used to determine net periodic benefit obligations are as follows: Years Ended December 31, 2023 2022 Discount rate 4.5 % 4.9 % Salary increases N/A N/A |
Schedule of Allocation of Plan Assets | The fair values of the assets at December 31, 2023 by asset category are as follows: Asset Category Level of Valuation Input Fair Value Investments valued using NAV per share Total 2023 Cash and cash equivalents Level 1 $ 0.3 $ — $ 0.3 Annuities Level 3 10.7 — 10.7 Pooled investment funds — 25.4 25.4 Total fair value $ 11.0 $ 25.4 $ 36.4 The fair values of the assets at December 31, 2022, by asset category is as follows: Asset Category Level of Valuation Input Fair Value Investments valued using NAV per share Total 2022 Cash and cash equivalents Level 1 $ 0.4 $ — $ 0.4 Annuities Level 3 10.0 — 10.0 Pooled investment funds — 20.3 20.3 Total fair value $ 10.4 $ 20.3 $ 30.7 |
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | Fair Value Measurement of Level 3 Pension Assets Annuities Balance at December 31, 2021 $ 16.6 Actual return on plan assets (6.6) Balance at December 31, 2022 $ 10.0 Actual return on plan assets 0.7 Balance at December 31, 2023 $ 10.7 |
Schedule of Plan Asset Allocation | The weighted average asset allocation of the plan assets as of December 31, 2023, by asset category is as follows: December 31, 2023 Equity securities 14.5 % Debt securities 55.3 % Annuities 29.5 % Real estate — % Other 0.7 % The weighted average target asset allocation of the plan assets is as follows: December 31, 2023 Equity securities 10.0% to 20.0% Debt securities 50.0% to 60.0% Annuities 25.0% to 35.0% Real estate —% to 10.0% Other —% to 5.0% |
Schedule of Expected Benefit Payments | The estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows: 2024 $ 1.1 2025 1.2 2026 1.3 2027 1.8 2028 1.7 Years 2029 to 2033 $ 10.2 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table is a summary of corporate and other allocations for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, 2023 2022 2021 Direct costs, exclusive of depreciation and amortization $ 86.6 $ 166.6 $ 150.6 Selling, general and administrative expenses, exclusive of depreciation and amortization 105.0 207.9 146.0 Restructuring and other charges 0.2 0.7 1.8 Foreign exchange gain (loss) 2.2 6.8 5.9 Corporate and other allocations $ 194.0 $ 382.0 $ 304.3 Years Ended December 31, 2023 2022 2021 Special Payment to Former Parent $ (1,595.0) $ — $ — General financing activities (283.7) (365.3) (405.3) Corporate allocations 183.8 356.6 276.8 Stock compensation expense 10.2 25.4 27.5 Total net transfers (to) from parent $ (1,684.7) $ 16.7 $ (101.0) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Years Ended December 31, 2023 2022 2021 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 45.1 $ 0.4 $ 0.2 Income taxes, net of refunds 18.0 27.0 16.1 Disclosure of non-cash investing activities: Change in accrued property, plant and equipment (1.3) 1.8 (1.9) Disclosure of non-cash transfers to (from) Former Parent: Change in right-of-use lease assets 13.9 — — Change in property, plant and equipment net (27.7) — — |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Revenues from external customers by reportable segment were as follows: Years Ended December 31, 2023 2022 2021 Revenues from external customers: Clinical Services $ 2,839.5 $ 2,825.4 $ 2,763.5 Enabling Services 269.5 270.7 294.0 Total revenues $ 3,109.0 $ 3,096.1 $ 3,057.5 Intersegment revenues, which were eliminated in consolidation, were as follows: Years Ended December 31, 2023 2022 2021 Intersegment revenues: Clinical Services $ 1.3 $ 1.3 $ 0.3 Enabling Services 8.6 8.3 10.0 Total revenues $ 9.9 $ 9.6 $ 10.3 Operating income by reportable segment was as follows: Years Ended December 31, 2023 2022 2021 Operating Income: Clinical Services $ 243.0 $ 413.4 $ 339.5 Enabling Services 11.4 24.4 39.0 Segment operating income 254.4 437.8 378.5 Corporate costs not allocated to segments (103.2) (95.9) (103.5) Amortization (63.8) (65.7) (140.0) Goodwill and other asset impairments — (9.8) — Restructuring and other charges (24.3) (30.5) (20.7) Total operating income (loss) $ 63.1 $ 235.9 $ 114.3 |
BUSINESS (Details)
BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2023 segment country | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Number of countries with primary office locations | country | 5 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | |||
Interest expense | $ 69.8 | $ 0.2 | $ 0.2 |
Software | |||
Capitalized Contract Cost [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Pharmaceutical company one | Accounts receivable and unbilled services | Customer concentration risk | |||
Capitalized Contract Cost [Line Items] | |||
Concentration risk, percentage | 16% | 10.50% | |
Pharmaceutical company one | Revenue | Customer concentration risk | |||
Capitalized Contract Cost [Line Items] | |||
Concentration risk, percentage | 10.60% | ||
Pharmaceutical company two | Accounts receivable and unbilled services | Customer concentration risk | |||
Capitalized Contract Cost [Line Items] | |||
Concentration risk, percentage | 10.70% | ||
Minimum | Software | |||
Capitalized Contract Cost [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum | Sales commission assets | |||
Capitalized Contract Cost [Line Items] | |||
Contract cost, amortization period | 1 year | ||
Minimum | Deferred contract costs | |||
Capitalized Contract Cost [Line Items] | |||
Contract cost, amortization period | 2 years | ||
Maximum | Software | |||
Capitalized Contract Cost [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum | Sales commission assets | |||
Capitalized Contract Cost [Line Items] | |||
Contract cost, amortization period | 4 years | ||
Maximum | Deferred contract costs | |||
Capitalized Contract Cost [Line Items] | |||
Contract cost, amortization period | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Property, Plant and Equipment (Details) | Dec. 31, 2023 |
Buildings and building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Buildings and building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 35 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Intangible Assets (Details) | Dec. 31, 2023 |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 9 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 25 years |
Technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 2 years |
Technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 13 years |
Non-compete agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 years |
Non-compete agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
REVENUES - Summary of Revenue b
REVENUES - Summary of Revenue by Segment and Geography (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 3,109 | $ 3,096.1 | $ 3,057.5 |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 827.5 | 841.9 | 868.4 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,663.5 | 1,672.5 | 1,649.6 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 618 | 581.7 | 539.5 |
Clinical Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,839.5 | 2,825.4 | 2,763.5 |
Clinical Services | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 827.5 | 841.9 | 868.4 |
Clinical Services | North America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,395.4 | 1,403.9 | 1,357.6 |
Clinical Services | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 616.6 | 579.6 | 537.5 |
Enabling Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 269.5 | 270.7 | 294 |
Enabling Services | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 0 |
Enabling Services | North America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 268.1 | 268.6 | 292 |
Enabling Services | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 1.4 | $ 2.1 | $ 2 |
REVENUES - Summary of Capitaliz
REVENUES - Summary of Capitalized Contract Cost (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Capitalized Contract Cost [Line Items] | ||
Total contract assets | $ 29.1 | $ 33.4 |
Sales commission assets | ||
Capitalized Contract Cost [Line Items] | ||
Total contract assets | 16.4 | 18.6 |
Deferred contract costs | ||
Capitalized Contract Cost [Line Items] | ||
Total contract assets | $ 12.7 | $ 14.8 |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 23, 2023 | |
Capitalized Contract Cost [Line Items] | ||||
Unearned revenue, revenue recognized | $ 211.1 | $ 230.8 | $ 208.7 | |
Remaining performance obligation | 4,762.8 | |||
Performance obligation partially satisfied in previous period, revenue recognized (reduction) | (60.1) | 72.3 | 80.3 | |
ARPP, maximum facility amount | $ 80 | |||
Accounts receivable sold | 17.5 | |||
Proceeds from sale of receivables | $ 17.3 | |||
Minimum | ||||
Capitalized Contract Cost [Line Items] | ||||
Remaining performance obligation, period | 1 year | |||
Maximum | ||||
Capitalized Contract Cost [Line Items] | ||||
Remaining performance obligation, period | 8 years | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||
Capitalized Contract Cost [Line Items] | ||||
Remaining performance obligation, percentage | 31% | |||
Remaining performance obligation, period | 12 months | |||
Sales commission assets | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized assets, amortization | $ 13.8 | 13.4 | 11.4 | |
Deferred contract costs | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized assets, amortization | $ 9.2 | $ 12.4 | $ 13.5 |
REVENUES - Schedule of Accounts
REVENUES - Schedule of Accounts Receivable, Unbilled Services and Unearned Revenue (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable | $ 481 | $ 449.2 | |
Unbilled services | 603.4 | 585.7 | |
Less: allowance for credit losses | (32.3) | (12.7) | $ (11.7) |
Total | 1,052.1 | 1,022.2 | |
Contract with Customer, Liability | 268.8 | ||
Unearned revenue | $ 241.4 | $ 271.5 |
REVENUES - Rollforward of Allow
REVENUES - Rollforward of Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit losses, beginning balance | $ 12.7 | $ 11.7 |
Credit loss expense | 27.8 | 3.4 |
Write-offs | (8.2) | (2.4) |
Allowance for credit losses, ending balance | $ 32.3 | $ 12.7 |
RESTRUCTURING AND OTHER CHARG_3
RESTRUCTURING AND OTHER CHARGES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring and Other Charges [Line Items] | |||
Restructuring and other charges | $ 24.3 | $ 30.5 | $ 20.7 |
Impairment of facility related assets | 0.2 | 2.3 | 2.8 |
Reduction of prior restructuring accruals | $ 0 | 0.2 | 0.7 |
Restructuring liabilities, expected payout period | 12 months | ||
Severance and Other Employee Costs | |||
Restructuring and Other Charges [Line Items] | |||
Restructuring and other charges | $ 20 | 16.5 | 5.2 |
Reduction of prior restructuring accruals | 0 | 0.2 | 0.1 |
Lease and Other Facility Costs | |||
Restructuring and Other Charges [Line Items] | |||
Restructuring and other charges | 4.3 | 14.2 | 16.2 |
Reduction of prior restructuring accruals | $ 0 | $ 0 | $ 0.6 |
RESTRUCTURING AND OTHER CHARG_4
RESTRUCTURING AND OTHER CHARGES - Schedule of restructuring and other charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring charges | $ 23.9 | $ 27.5 | $ 16.1 |
Impairment of facility related assets | 0.2 | 2.3 | 2.8 |
Restructuring charges allocated from Former Parent | 0.2 | 0.7 | 1.8 |
Total | $ 24.3 | $ 30.5 | $ 20.7 |
RESTRUCTURING AND OTHER CHARG_5
RESTRUCTURING AND OTHER CHARGES - Restructuring accrual activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 6.9 | $ 3.1 | $ 3.3 |
Restructuring charges | 24.3 | 27.7 | 16.8 |
Reduction of prior restructuring accruals | 0 | (0.2) | (0.7) |
Cash payments and other adjustments | (26.5) | (23.7) | (16.3) |
Ending balance | 4.7 | 6.9 | 3.1 |
Current | 2.1 | ||
Non-current | 2.6 | ||
Total restructuring reserve | 4.7 | 6.9 | 3.1 |
Severance and Other Employee Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 1.9 | 0.6 | 0.6 |
Restructuring charges | 20 | 15.9 | 3.7 |
Reduction of prior restructuring accruals | 0 | (0.2) | (0.1) |
Cash payments and other adjustments | (20.6) | (14.4) | (3.6) |
Ending balance | 1.3 | 1.9 | 0.6 |
Total restructuring reserve | 1.3 | 1.9 | 0.6 |
Lease and Other Facility Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 5 | 2.5 | 2.7 |
Restructuring charges | 4.3 | 11.8 | 13.1 |
Reduction of prior restructuring accruals | 0 | 0 | (0.6) |
Cash payments and other adjustments | (5.9) | (9.3) | (12.7) |
Ending balance | 3.4 | 5 | 2.5 |
Total restructuring reserve | $ 3.4 | $ 5 | $ 2.5 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Earnings Per Share [Abstract] | |||
Common stock, outstanding (in shares) | 88.8 | 88.8 | 0 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Basic Earnings per Share to Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Net earnings | $ (3.4) | $ 192.9 | $ 98 |
Net earnings including impact of dilutive adjustments | $ (3.4) | $ 192.9 | $ 98 |
Outstanding shares, basic (in shares) | 88.8 | 88.8 | 88.8 |
Dilutive effect of employee awards (in shares) | 0 | 0 | 0 |
Outstanding shares, diluted (in shares) | 88.8 | 88.8 | 88.8 |
Per share amount, basic (in dollars per share) | $ (0.04) | $ 2.17 | $ 1.10 |
Per share amount, diluted (in dollars per share) | $ (0.04) | $ 2.17 | $ 1.10 |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities Excluded from Computation (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Outstanding shares, diluted (in shares) | 88.8 | 88.8 | 88.8 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive employee stock options and awards excluded based on reporting a net loss for the period (in shares) | 0.3 | 0 | 0 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Outstanding shares, diluted (in shares) | 0.3 | 0 | 0 |
PREPAID EXPENSES AND OTHER (Det
PREPAID EXPENSES AND OTHER (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 35.3 | $ 32.7 |
Research & development tax credit receivables | 22 | 29.2 |
Other | 35.1 | 50.8 |
Prepaid expenses & other | $ 92.4 | $ 112.7 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term (up to) | 6 years | ||
Short-term lease expense | $ 200,000 | $ 0 | $ 0 |
Sublease income | 1,700,000 | 0 | 0 |
Variable lease payments | $ 0 | $ 0 | $ 0 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 18 years |
LEASES - Schedule of Expense (D
LEASES - Schedule of Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 27.4 | $ 24.9 | $ 32.5 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ (29.9) | $ (28.1) | $ (30.9) |
ROU assets obtained in exchange for lease obligations: | |||
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 64.2 | $ 18.2 | $ 25.6 |
LEASES - Schedule of Balance Sh
LEASES - Schedule of Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease ROU assets (included in Property, plant and equipment, net) | $ 78.2 | $ 50 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | Property, plant and equipment, net |
Short-term operating lease liabilities | $ 19.5 | $ 23.3 |
Operating lease liabilities | 66.5 | 40.1 |
Total operating lease liabilities | $ 86 | $ 63.4 |
Weighted Average Remaining Lease Term | 9 years 2 months 12 days | 4 years 2 months 12 days |
Weighted Average Discount Rate | 5.10% | 3.20% |
LEASES - Schedule of Maturity o
LEASES - Schedule of Maturity of Operating Leases (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Lease | ||
2024 | $ 22.5 | |
2025 | 16.8 | |
2026 | 11.3 | |
2027 | 8.2 | |
2028 | 7.5 | |
Thereafter | 43.1 | |
Total lease payments | 109.4 | |
Less imputed interest | (23.4) | |
Less current portion | (19.5) | $ (23.3) |
Total maturities, due beyond one year | $ 66.5 | $ 40.1 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Operating lease ROU assets | $ 78.2 | $ 50 |
Property, plant and equipment, gross and operating lease ROU assets | 389.8 | 293.6 |
Less accumulated depreciation | (168.9) | (128.7) |
Property, plant and equipment, net and operating lease ROU assets | 220.9 | 164.9 |
Land, buildings, and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6 | 14.6 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 77.3 | 74.4 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 95.1 | 74.6 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 72.1 | 30 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15.2 | 8.6 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 45.9 | $ 41.4 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 32.6 | $ 27 | $ 26.3 |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 11.6 | $ 9.5 | $ 10.5 |
PROPERTY, PLANT AND EQUIPMENT_5
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 220.9 | $ 164.9 |
Clinical Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 180.6 | 135.8 |
Enabling Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 40.3 | 29.1 |
North America | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 122.4 | 75.4 |
North America | Clinical Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 82.1 | 46.4 |
North America | Enabling Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 40.3 | 29 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 73.2 | 43.9 |
Europe | Clinical Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 73.2 | 43.8 |
Europe | Enabling Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 0 | 0.1 |
Other | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 25.3 | 45.6 |
Other | Clinical Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 25.3 | 45.6 |
Other | Enabling Services | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Balance as of January 1 | $ 1,997.3 | $ 2,080.9 |
Goodwill acquired during the period | 0 | 0 |
Foreign currency impact and other adjustments to goodwill | 32 | (83.6) |
Balance at end of year | 2,029.3 | 1,997.3 |
Clinical Services | ||
Goodwill [Roll Forward] | ||
Balance as of January 1 | 1,707.4 | 1,791 |
Goodwill acquired during the period | 0 | 0 |
Foreign currency impact and other adjustments to goodwill | 32 | (83.6) |
Balance at end of year | 1,739.4 | 1,707.4 |
Enabling Services | ||
Goodwill [Roll Forward] | ||
Balance as of January 1 | 289.9 | 289.9 |
Goodwill acquired during the period | 0 | 0 |
Foreign currency impact and other adjustments to goodwill | 0 | 0 |
Balance at end of year | $ 289.9 | $ 289.9 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Components of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,276.7 | $ 1,258.1 |
Accumulated Amortization | (505.5) | (434.8) |
Net Carrying Amount | 771.2 | 823.3 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,209.7 | 1,191.1 |
Accumulated Amortization | (443.2) | (376.7) |
Net Carrying Amount | 766.5 | 814.4 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 53.7 | 53.7 |
Accumulated Amortization | (50.5) | (47.8) |
Net Carrying Amount | 3.2 | 5.9 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 13.3 | 13.3 |
Accumulated Amortization | (11.8) | (10.3) |
Net Carrying Amount | $ 1.5 | $ 3 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 63.8 | $ 65.7 | $ 140 |
Estimated amortization expense, 2024 | 64.2 | ||
Estimated amortization expense, 2025 | 61.3 | ||
Estimated amortization expense, 2026 | 60.5 | ||
Estimated amortization expense, 2027 | 60.5 | ||
Estimated amortization expense, 2028 | 53.5 | ||
Estimated amortization expense, thereafter | $ 471.2 | ||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Goodwill and other asset impairment | ||
Enabling Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | $ 9.8 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 27, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 1,640,000,000 | ||||
Maximum borrowing capacity | 450,000,000 | ||||
Proceeds from issuance of senior notes | 570,000,000 | $ 0 | $ 0 | ||
Proceeds from term loans | 1,061,400,000 | $ 0 | $ 0 | ||
Letters of credit outstanding | $ 0 | ||||
7.5% senior notes due 2030 | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 570,000,000 | ||||
Stated interest rate | 7.50% | 7.50% | |||
Proceeds from issuance of senior notes | $ 560,200,000 | ||||
Senior secured revolving credit facility | Line of credit | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 450,000,000 | ||||
Effective interest rate | 7.61% | ||||
Line of credit, outstanding balance | $ 0 | ||||
Available borrowing capacity | $ 348,400,000 | ||||
Commitment fee | 0.35% | ||||
Annual agency fee | $ 100,000 | ||||
Senior secured revolving credit facility | Line of credit | Swingline sub-facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 75,000,000 | ||||
Senior secured revolving credit facility | Line of credit | Letter of credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 75,000,000 | ||||
Senior secured term loan A due 2028 | Line of credit | Secured debt | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 500,000,000 | ||||
Debt term | 5 years | ||||
Proceeds from term loans | $ 491,800,000 | ||||
Effective interest rate | 7.61% | ||||
Senior secured term loan B due 2030 | Line of credit | Secured debt | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 570,000,000 | ||||
Debt term | 7 years | ||||
Proceeds from term loans | $ 552,900,000 | ||||
Effective interest rate | 9.11% |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Jun. 27, 2023 | Dec. 31, 2022 |
Current Portion of Long-Term Debt | |||
Debt issuance discount and fees | $ (4.6) | $ 0 | |
Total short-term borrowings and current portion of long-term debt | 26.1 | 0 | |
Long-Term Debt | |||
Debt issuance costs | (28.1) | 0 | |
Total long-term debt | 1,565.9 | 0 | |
Senior notes | 7.5% senior notes due 2030 | |||
Long-Term Debt | |||
Debt, gross | $ 570 | 0 | |
Stated interest rate | 7.50% | 7.50% | |
Line of credit | Secured debt | Senior secured term loan A due 2028 | |||
Current Portion of Long-Term Debt | |||
Current portion of debt, gross | $ 25 | 0 | |
Long-Term Debt | |||
Debt, gross | 462.5 | 0 | |
Line of credit | Secured debt | Senior secured term loan B due 2030 | |||
Current Portion of Long-Term Debt | |||
Current portion of debt, gross | 5.7 | 0 | |
Long-Term Debt | |||
Debt, gross | $ 561.5 | $ 0 |
DEBT - Schedule Of Long-Term De
DEBT - Schedule Of Long-Term Debt Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Long-Term Debt, Fiscal Year Maturity [Abstract] | ||
2024 | $ 30.7 | |
2025 | 30.7 | |
2026 | 30.7 | |
2027 | 30.7 | |
2028 | 393.2 | |
Thereafter | 1,108.7 | |
Total scheduled principal payments | 1,624.7 | |
Less debt issuance costs | (32.7) | |
Less current portion | (26.1) | $ 0 |
Long-term debt, due beyond one year | $ 1,565.9 | $ 0 |
DEBT - Schedule of Estimated Fa
DEBT - Schedule of Estimated Fair Value of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Value | 7.5% senior notes due 2030 | Senior notes | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 570 | $ 0 |
Carrying Value | Senior secured term loan A due 2028 | Line of credit | Secured debt | ||
Debt Instrument [Line Items] | ||
Long term debt | 487.5 | 0 |
Carrying Value | Senior secured term loan B due 2030 | Line of credit | Secured debt | ||
Debt Instrument [Line Items] | ||
Long term debt | 567.2 | 0 |
Estimated Fair Value | 7.5% senior notes due 2030 | Senior notes | ||
Debt Instrument [Line Items] | ||
Long term debt | 552 | 0 |
Estimated Fair Value | Senior secured term loan A due 2028 | Line of credit | Secured debt | ||
Debt Instrument [Line Items] | ||
Long term debt | 493.7 | 0 |
Estimated Fair Value | Senior secured term loan B due 2030 | Line of credit | Secured debt | ||
Debt Instrument [Line Items] | ||
Long term debt | $ 566.4 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Schedule of Derivative Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Interest rate swaps | Designated as hedging instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset | $ 0.7 | $ 0 |
Liability | 2.6 | 0 |
Foreign currency forward contracts | Not designated as hedging instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Asset | 0.8 | 0 |
Liability | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) $ in Millions | Dec. 31, 2023 USD ($) | Aug. 07, 2023 derivative |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Pre-tax loss expected to be reclassified | $ 0.7 | |
Interest rate swaps | Designated as hedging instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Number of derivative instruments | derivative | 2 | |
Derivative, notional amount | $ 150 | |
Derivative, fixed interest rate | 4.20% | |
Foreign currency forward contracts | Not designated as hedging instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, notional amount | $ 458.3 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Pre-tax Effects of Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest rate swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Pre-Tax Gain (Loss) Included in Other Comprehensive Income | $ (1.5) | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Reclassified from Other Comprehensive Loss into Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Interest rate swaps | Interest expense | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amounts Reclassified from Other Comprehensive Loss into Earnings | $ (0.4) | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_7
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Gain (Loss) for Derivative Contracts Not Designated as Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Foreign currency Forward contracts | Foreign exchange loss | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (Loss) on Derivatives Recognized in Earnings | $ (0.8) | $ 0 | $ 0 |
ACCRUED EXPENSES AND OTHER (Det
ACCRUED EXPENSES AND OTHER (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 118 | $ 123 |
Accrued pass through expenses | 117.7 | 133.1 |
Accrued taxes | 61.9 | 39.5 |
Accrued interest | 22.5 | 0 |
Other | 36 | 27.1 |
Total accrued expenses and other current liabilities | $ 356.1 | $ 322.7 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (123.3) | $ 114.9 | $ 22.8 |
Foreign | 124.4 | 122.1 | 113.6 |
Income before income taxes | $ 1.1 | $ 237 | $ 136.4 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 3.6 | $ 18.6 | $ 23.9 |
State | 0.9 | 10.7 | 8.9 |
Foreign | 40.5 | 31.3 | 35.8 |
Current income taxes | 45 | 60.6 | 68.6 |
Deferred: | |||
Federal | (24.3) | (8) | (27.9) |
State | (4) | (5.9) | (4.7) |
Foreign | (12.2) | (2.6) | 2.4 |
Deferred income taxes | (40.5) | (16.5) | (30.2) |
Total provision for income taxes | $ 4.5 | $ 44.1 | $ 38.4 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. rate | 21% | 21% | 21% |
State and local income taxes, net of U.S. Federal income tax effect | (276.10%) | 1.10% | 1.70% |
Foreign earnings taxed at rates different than the statutory U.S. rate | 337.90% | 0.70% | 2.30% |
Permanent non-deductible items | 18.70% | (0.50%) | 0.70% |
Changes in valuation allowance | (6.80%) | 0% | 0% |
Employee benefits | 146.80% | (0.90%) | (0.70%) |
Changes in enacted tax rates | 0% | 0.30% | 7% |
Net tax on U.S. international income inclusions | 65.20% | (2.30%) | (6.10%) |
Change in uncertain tax positions | 26.50% | 0.20% | 0% |
R&D credit | (244.60%) | (1.00%) | 0% |
Withholding tax | 1.362 | 0.007 | 0.023 |
BEAT | 168.60% | 0% | 0% |
Other | 12.90% | (0.70%) | 0% |
Effective rate | 406.30% | 18.60% | 28.20% |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Employee compensation and benefits | $ 12.5 | $ 14.9 |
Operating lease liability | 7.8 | 4.5 |
Acquisition and restructuring reserves | 0.9 | 3.1 |
Interest expense carryforward | 14.1 | 0 |
Capitalized R&D Costs | 24.5 | 10.2 |
Loss and credit carryforwards, net | 8.1 | 0 |
Other | 2.1 | 3.4 |
Total gross deferred tax assets | 70 | 36.1 |
Less: valuation allowance | (2.8) | 0 |
Deferred tax assets, net of valuation allowance | 67.2 | 36.1 |
Deferred tax liabilities: | ||
Right of use asset | (6.6) | (2.1) |
Revenue recognition | (6.2) | (8.9) |
Intangible assets | (187.5) | (200.1) |
Property, plant and equipment | (12.5) | (8.3) |
Total gross deferred tax liabilities | (212.8) | (219.4) |
Net deferred tax liabilities | $ (145.6) | $ (183.3) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||||
DTA valuation allowance | $ 2,800,000 | $ 0 | ||
Operating loss carryforwards, state | 1,111,000,000 | |||
Operating loss carryforwards, federal, foreign | 11,800,000 | |||
Unrecognized tax benefits | 300,000 | 1,400,000 | $ 2,100,000 | $ 10,300,000 |
Significant change in unrecognized tax benefits reasonably possible in next 12 months | 0 | |||
Uncertain tax positions, accrued interest and penalties | 0 | 100,000 | 2,200,000 | |
Uncertain tax positions, interest and penalties expense | 0 | (2,200,000) | 600,000 | |
Unrecognized tax benefits that would impact effective tax rate | 300,000 | 1,400,000 | 4,300,000 | |
Foreign earnings repatriated | 1,618,300,000 | $ 1,572,700,000 | $ 1,450,300,000 | |
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
DTA valuation allowance | 0 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards, subject to expiration | 953,300,000 | |||
Operating loss carryforwards, not subject to expiration | $ 157,700,000 |
INCOME TAXES - Schedule of Unre
INCOME TAXES - Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance as of January 1 | $ 1.4 | $ 2.1 | $ 10.3 |
Decreases related to positions taken on prior year items | (1.4) | 0 | (1.6) |
Increases related to positions taken on prior year items | 0 | 2 | 0 |
Increases related to positions taken on current year items | 0.3 | 0.2 | 1 |
Settlement of uncertain tax positions with tax authorities | 0 | (3.1) | (7.6) |
Exchange (gain) loss | 0 | 0.2 | 0 |
Balance as of December 31 | $ 0.3 | $ 1.4 | $ 2.1 |
STOCK COMPENSATION PLANS - Narr
STOCK COMPENSATION PLANS - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Jul. 18, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 42.7 | $ 25.4 | $ 27.5 | |
Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | 40.2 | 20.3 | 22.1 | |
Nonemployees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 2.5 | 5.1 | 5.4 | |
Fortrea’s Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for future issuance (in shares) | 11 | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for future issuance (in shares) | 1.8 | |||
Restricted Stock, Restricted Stock Units and Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 42.1 | 23.1 | 25.1 | |
Unrecognized compensation cost | $ 95.6 | |||
Unrecognized compensation cost, recognition period | 1 year 10 months 24 days | |||
Restricted Stock, Restricted Stock Units and Performance Shares | Corporate, non-segment | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ 2.3 | $ 4.6 | $ 4.9 | |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares converted (in shares) | 2.5 | |||
Award vesting period | 3 years | |||
Restricted Stock Units | Year one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33% | |||
Restricted Stock Units | Year two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33% | |||
Restricted Stock Units | Year three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33% | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares converted (in shares) | 0.1 | |||
Cliff vesting period | 3 years | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Exercise period | 10 years |
STOCK COMPENSATION PLANS - Sche
STOCK COMPENSATION PLANS - Schedule of Stock Option Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Number of Options | |
Outstanding, beginning (in shares) | shares | 0 |
Granted (in shares) | shares | 0.8 |
Exercised (in shares) | shares | 0 |
Cancelled (in share) | shares | 0 |
Outstanding, ending (in shares) | shares | 0.8 |
Exercisable (in shares) | shares | 0 |
Weighted-Average Exercise Price per Option | |
Options, beginning (in dollar per share) | $ / shares | $ 0 |
Granted (in dollar per share) | $ / shares | 26.52 |
Exercised (in dollar per share) | $ / shares | 0 |
Cancelled (in dollar per share) | $ / shares | 0 |
Options, ending (in dollar per share) | $ / shares | 26.52 |
Exercisable (in dollar per share) | $ / shares | $ 0 |
Stock Options Additional Disclosures | |
Outstanding, weighted average remaining contractual term | 9 years 7 months 6 days |
Exercisable, weighted average remaining contractual term | 0 years |
Outstanding, aggregate intrinsic value (in dollar per share) | $ | $ 6.7 |
Exercisable, aggregate intrinsic value (in dollar per share) | $ | $ 0 |
STOCK COMPENSATION PLANS - Fair
STOCK COMPENSATION PLANS - Fair Value Estimates (Details) - Stock options | 12 Months Ended |
Dec. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant date fair value per option (in dollars per share) | $ 12.51 |
Weighted-average expected life (in years) | 6 years 3 months 18 days |
Risk free interest rate | 4.40% |
Expected volatility | 40.40% |
Expected dividend yield | 0% |
STOCK COMPENSATION PLANS - Rest
STOCK COMPENSATION PLANS - Restricted Stock Units and Performance Shares (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Restricted Stock Units | |
Number of Shares | |
Non-vested, beginning balance (in shares) | shares | 0 |
Converted (in shares) | shares | 2.5 |
Granted (in shares) | shares | 1.6 |
Vested (in shares) | shares | (0.1) |
Forfeited (in shares) | shares | (0.2) |
Non-vested, ending balance (in shares) | shares | 3.8 |
Weighted-Average Grant Date Fair Value | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 0 |
Converted (in dollars per share) | $ / shares | 34.20 |
Granted (in dollars per share) | $ / shares | 27.93 |
Vested (in dollars per share) | $ / shares | 34.60 |
Forfeited (in dollars per share) | $ / shares | 34.14 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 31.54 |
Performance Shares | |
Number of Shares | |
Non-vested, beginning balance (in shares) | shares | 0 |
Converted (in shares) | shares | 0.1 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Non-vested, ending balance (in shares) | shares | 0.1 |
Weighted-Average Grant Date Fair Value | |
Non-vested, beginning balance (in dollars per share) | $ / shares | $ 0 |
Converted (in dollars per share) | $ / shares | 43.78 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 43.78 |
STOCK COMPENSATION PLANS - Shar
STOCK COMPENSATION PLANS - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 42.7 | $ 25.4 | $ 27.5 |
Income tax benefits | 7.8 | 9.7 | 6.5 |
Direct costs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | 25.8 | 14.6 | 14.1 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock compensation expense | $ 16.9 | $ 10.8 | $ 13.4 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency accrual | $ 12.5 |
Loss contingency, provision | $ 5.5 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 3,342.6 | $ 3,260.6 | $ 3,291.6 |
Current year adjustments | 56.9 | (127.6) | (26.6) |
Amounts reclassified from accumulated other comprehensive income (loss) | (0.4) | ||
Tax effect of adjustments | 0.7 | 0 | (1.4) |
Transfers (to) from Former Parent | 2.1 | ||
Ending balance | 1,738.8 | 3,342.6 | 3,260.6 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (276) | (148.4) | (120.4) |
Ending balance | (218.4) | (276) | (148.4) |
Foreign Currency Translation Adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (267.2) | (140.2) | |
Current year adjustments | (127) | ||
Current year adjustments, before reclassifications | 57.6 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | ||
Tax effect of adjustments | 0 | 0 | |
Transfers (to) from Former Parent | 0 | ||
Ending balance | (209.6) | (267.2) | (140.2) |
Net Benefit Plan Adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (8.8) | (8.2) | |
Current year adjustments | (0.6) | ||
Current year adjustments, before reclassifications | (0.9) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | ||
Tax effect of adjustments | 0.2 | 0 | |
Transfers (to) from Former Parent | 2.1 | ||
Ending balance | (7.4) | (8.8) | (8.2) |
Unrealized Gain (Loss) on Derivative Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | |
Current year adjustments | 0 | ||
Current year adjustments, before reclassifications | (1.5) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (0.4) | ||
Tax effect of adjustments | 0.5 | 0 | |
Transfers (to) from Former Parent | 0 | ||
Ending balance | $ (1.4) | $ 0 | $ 0 |
PENSION AND POSTRETIREMENT PL_3
PENSION AND POSTRETIREMENT PLANS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Employer matching contribution, percent of match | 100% | ||
Employee contribution, percent | 5% | ||
Defined contribution plan, expense | $ 57,300,000 | $ 54,900,000 | $ 57,700,000 |
Accumulated benefit obligation | 37,600,000 | $ 32,700,000 | |
Effect of one percentage point increase in benefit cost components | 0 | ||
Effect of one percentage point decrease in benefit cost components | 0 | ||
Effect of one percentage point increase in expected return on plan assets | (300,000) | ||
Effect of one percentage point decrease in expected return on plan assets | (300,000) | ||
Expected future employer contributions, next fiscal year | $ 1,900,000 |
PENSION AND POSTRETIREMENT PL_4
PENSION AND POSTRETIREMENT PLANS - Schedule of Net Benefit Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Service cost for benefits earned | $ 0.2 | $ 0.2 | $ 0.2 |
Interest cost on benefit obligation | 1.6 | 1 | 0.9 |
Expected return on plan assets | (1.7) | (2.2) | (2) |
Net amortization and deferral | 0.2 | 0.1 | 0.2 |
Defined-benefit plan costs | $ 0.3 | $ (0.9) | $ (0.7) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Expected Return Loss Statement Of Income Or Comprehensive Income Extensible List Not Disclosed Flag | Expected return on plan assets | Expected return on plan assets | Expected return on plan assets |
PENSION AND POSTRETIREMENT PL_5
PENSION AND POSTRETIREMENT PLANS - Schedule of Amounts Recognized in Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Net actuarial loss in accumulated other comprehensive income (loss) | $ (1) | $ (0.6) | $ 4.3 |
PENSION AND POSTRETIREMENT PL_6
PENSION AND POSTRETIREMENT PLANS - Schedule of Changes in Projected Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Balance at beginning of the year | $ 32.7 | $ 64 | |
Service cost for benefits earned | 0.2 | 0.2 | $ 0.2 |
Interest cost on benefit obligation | 1.6 | 1 | 0.9 |
Actuarial (gain) loss | 1.9 | (24.3) | |
Benefits and administrative expenses paid | (0.7) | (2) | |
Foreign currency exchange rate changes | 1.9 | (6.2) | |
Balance at end of the year | $ 37.6 | $ 32.7 | $ 64 |
PENSION AND POSTRETIREMENT PL_7
PENSION AND POSTRETIREMENT PLANS - Schedule of Changes in Fair Value of Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Balances at beginning of the year | $ 30.7 | $ 59.4 |
Business contributions | 2.3 | 1.9 |
Actual return on plan assets | 2.4 | (22.8) |
Benefits and administrative expenses paid | (0.7) | (2) |
Foreign currency exchange rate changes | 1.7 | (5.8) |
Balances at end of the year | $ 36.4 | $ 30.7 |
PENSION AND POSTRETIREMENT PL_8
PENSION AND POSTRETIREMENT PLANS - Schedule of Net Funded Status (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Retirement Benefits [Abstract] | ||
Funded status | $ (1.2) | $ (2.1) |
PENSION AND POSTRETIREMENT PL_9
PENSION AND POSTRETIREMENT PLANS - Schedule of Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net periodic benefit costs | |||
Discount rate | 4.90% | 1.90% | 1.30% |
Expected long term rate of return | 5.50% | 4% | 3.30% |
Net periodic benefit obligations | |||
Discount rate | 4.50% | 4.90% |
PENSION AND POSTRETIREMENT P_10
PENSION AND POSTRETIREMENT PLANS - Schedule of Allocation of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 36.4 | $ 30.7 | $ 59.4 |
Fair Value | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 11 | 10.4 | |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 10.7 | 10 | $ 16.6 |
Investments valued using NAV per share | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 25.4 | 20.3 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0.3 | 0.4 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0.3 | 0.4 | |
Annuities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 10.7 | 10 | |
Annuities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 10.7 | 10 | |
Pooled investment funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 25.4 | 20.3 | |
Pooled investment funds | Investments valued using NAV per share | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 25.4 | $ 20.3 |
PENSION AND POSTRETIREMENT P_11
PENSION AND POSTRETIREMENT PLANS - Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurement of Level 3 Pension Assets | ||
Balances at beginning of the year | $ 30.7 | $ 59.4 |
Balances at end of the year | 36.4 | 30.7 |
Level 3 | ||
Fair Value Measurement of Level 3 Pension Assets | ||
Balances at beginning of the year | 10 | 16.6 |
Actual return on plan assets | 0.7 | (6.6) |
Balances at end of the year | $ 10.7 | $ 10 |
PENSION AND POSTRETIREMENT P_12
PENSION AND POSTRETIREMENT PLANS - Schedule of Plan Asset Allocation (Details) | Dec. 31, 2023 |
Equity securities | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, actual allocation | 14.50% |
Equity securities | Minimum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 10% |
Equity securities | Maximum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 20% |
Debt securities | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, actual allocation | 55.30% |
Debt securities | Minimum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 50% |
Debt securities | Maximum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 60% |
Annuities | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, actual allocation | 29.50% |
Annuities | Minimum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 25% |
Annuities | Maximum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 35% |
Real estate | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, actual allocation | 0% |
Real estate | Minimum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 0% |
Real estate | Maximum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 10% |
Other | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, actual allocation | 0.70% |
Other | Minimum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 0% |
Other | Maximum | |
Defined Benefit Plan, Plan Assets, Allocation [Line Items] | |
Plan assets, target allocation | 5% |
PENSION AND POSTRETIREMENT P_13
PENSION AND POSTRETIREMENT PLANS - Schedule of Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2024 | $ 1.1 |
2025 | 1.2 |
2026 | 1.3 |
2027 | 1.8 |
2028 | 1.7 |
Years 2029 to 2033 | $ 10.2 |
RELATED PARTY TRANSACTIONS - Al
RELATED PARTY TRANSACTIONS - Allocation of General Corporate and Other Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Corporate and other allocations | $ 194 | $ 382 | $ 304.3 |
Direct costs, exclusive of depreciation and amortization | |||
Related Party Transaction [Line Items] | |||
Corporate and other allocations | 86.6 | 166.6 | 150.6 |
Selling, general and administrative expenses, exclusive of depreciation and amortization | |||
Related Party Transaction [Line Items] | |||
Corporate and other allocations | 105 | 207.9 | 146 |
Restructuring and other charges | |||
Related Party Transaction [Line Items] | |||
Corporate and other allocations | 0.2 | 0.7 | 1.8 |
Foreign exchange gain (loss) | |||
Related Party Transaction [Line Items] | |||
Corporate and other allocations | $ 2.2 | $ 6.8 | $ 5.9 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Direct costs | $ 194 | $ 382 | $ 304.3 |
General financing activities | |||
Related Party Transaction [Line Items] | |||
Direct costs | 147.6 | 286.8 | 214 |
Corporate allocations | |||
Related Party Transaction [Line Items] | |||
Direct costs | 46.4 | 95.2 | 90.3 |
Subcontract services | |||
Related Party Transaction [Line Items] | |||
Direct costs | $ 48.8 | $ 87.1 | $ 70.1 |
RELATED PARTY TRANSACTIONS - Ne
RELATED PARTY TRANSACTIONS - Net Transfers To and From Labcorp (Details) - Related party - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Total net transfers (to) from parent | $ (1,684.7) | $ 16.7 | $ (101) |
Special Payment to Former Parent | |||
Related Party Transaction [Line Items] | |||
Total net transfers (to) from parent | (1,595) | 0 | 0 |
General financing activities | |||
Related Party Transaction [Line Items] | |||
Total net transfers (to) from parent | (283.7) | (365.3) | (405.3) |
Corporate allocations | |||
Related Party Transaction [Line Items] | |||
Total net transfers (to) from parent | 183.8 | 356.6 | 276.8 |
Stock compensation expense | |||
Related Party Transaction [Line Items] | |||
Total net transfers (to) from parent | $ 10.2 | $ 25.4 | $ 27.5 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid during period for: | |||
Interest | $ 45.1 | $ 0.4 | $ 0.2 |
Income taxes, net of refunds | 18 | 27 | 16.1 |
Disclosure of non-cash investing activities: | |||
Change in accrued property, plant and equipment | (1.3) | 1.8 | (1.9) |
Disclosure of non-cash transfers to (from) Former Parent: | |||
Change in right-of-use lease assets | 13.9 | 0 | 0 |
Change in property, plant and equipment net | $ (27.7) | $ 0 | $ 0 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 3,109 | $ 3,096.1 | $ 3,057.5 |
Segment operating income | 63.1 | 235.9 | 114.3 |
Goodwill and other asset impairments | 0 | (9.8) | 0 |
Restructuring and other charges | (24.3) | (30.5) | (20.7) |
Operating income | 63.1 | 235.9 | 114.3 |
Operating segments | |||
Segment Reporting Information [Line Items] | |||
Segment operating income | 254.4 | 437.8 | 378.5 |
Operating income | 254.4 | 437.8 | 378.5 |
Intersegment eliminations | |||
Segment Reporting Information [Line Items] | |||
Revenues | (9.9) | (9.6) | (10.3) |
Corporate, non-segment | |||
Segment Reporting Information [Line Items] | |||
Corporate costs not allocated to segments | (103.2) | (95.9) | (103.5) |
Amortization | (63.8) | (65.7) | (140) |
Goodwill and other asset impairments | 0 | (9.8) | 0 |
Restructuring and other charges | (24.3) | (30.5) | (20.7) |
Clinical Services | |||
Segment Reporting Information [Line Items] | |||
Revenues | 2,839.5 | 2,825.4 | 2,763.5 |
Clinical Services | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 2,839.5 | 2,825.4 | 2,763.5 |
Segment operating income | 243 | 413.4 | 339.5 |
Operating income | 243 | 413.4 | 339.5 |
Clinical Services | Intersegment eliminations | |||
Segment Reporting Information [Line Items] | |||
Revenues | (1.3) | (1.3) | (0.3) |
Enabling Services | |||
Segment Reporting Information [Line Items] | |||
Revenues | 269.5 | 270.7 | 294 |
Enabling Services | Operating segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 269.5 | 270.7 | 294 |
Segment operating income | 11.4 | 24.4 | 39 |
Operating income | 11.4 | 24.4 | 39 |
Enabling Services | Intersegment eliminations | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ (8.6) | $ (8.3) | $ (10) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - Held-for-sale, not discontinued operations $ in Millions | Mar. 09, 2024 USD ($) |
Subsequent Event [Line Items] | |
Purchase price | $ 345 |
Purchase price, paid at closing | 295 |
Purchase price, paid upon achievement of milestones | $ 50 |