Delaware | 001-39212 | 45-3806427 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.01 per share | PPD | The NASDAQ Stock Market LLC (Nasdaq Global Select Market) |
Item 8.01. | Other Events |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
23.1* | ||
99.1* | ||
99.2* | ||
99.3* | ||
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |
* | Furnished herewith. |
PPD, Inc. | ||
By: | /s/ B. Judd Hartman | |
Name: | B. Judd Hartman | |
Title: | Executive Vice President, General | |
Counsel and Secretary |
Change | ||||||||||||||||||||||||||
2019 vs. 2018 | 2018 vs. 2017 | |||||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Net authorizations (for the years ended December 31) | $ | 3,827.3 | $ | 3,421.0 | $ | 2,485.4 | $ | 406.3 | 11.9 | % | $ | 935.6 | 37.6 | % | ||||||||||||
Backlog (as of December 31) | 7,066.3 | 6,313.7 | 5,730.6 | 752.6 | 11.9 | 583.1 | 10.2 | |||||||||||||||||||
Backlog conversion (quarterly average for the years ended December 31) | 11.9 | % | 11.9 | % | 11.7 | % | — | 0.2 | ||||||||||||||||||
Net book-to-bill | 1.2x | 1.2x | 0.9x |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Revenue | $ | 4,031,017 | $ | 3,748,971 | $ | 2,767,476 | $ | 282,046 | 7.5 | % | $ | 981,495 | 35.5 | % | ||||||||||||
Reimbursed revenue | — | — | 233,574 | — | n.m. | (233,574 | ) | n.m. | ||||||||||||||||||
Total revenue | $ | 4,031,017 | $ | 3,748,971 | $ | 3,001,050 | $ | 282,046 | 7.5 | $ | 747,921 | 24.9 |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Direct costs | $ | 1,484,258 | $ | 1,333,812 | $ | 1,302,983 | $ | 150,446 | 11.3 | % | $ | 30,829 | 2.4 | % | ||||||||||||
% of total revenue | 36.8 | % | 35.6 | % | 43.4 | % |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Reimbursed costs | $ | 924,634 | $ | 940,913 | $ | 233,574 | $ | (16,279 | ) | (1.7 | )% | $ | 707,339 | 302.8 | % | |||||||||||
% of total revenue | 22.9 | % | 25.1 | % | 7.8 | % |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Selling, general and administrative expenses | $ | 938,806 | $ | 813,035 | $ | 809,333 | $ | 125,771 | 15.5 | % | $ | 3,702 | 0.5 | % | ||||||||||||
% of total revenue | 23.3 | % | 21.7 | % | 27.0 | % |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Recapitalization costs | $ | — | $ | — | $ | 114,766 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Depreciation and amortization | $ | 264,830 | $ | 258,974 | $ | 279,066 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Goodwill and long-lived asset impairments | $ | 1,284 | $ | 29,626 | $ | 43,459 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Interest expense, net | $ | 311,744 | $ | 263,618 | $ | 253,891 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
(Loss) gain on investments | $ | (19,043 | ) | $ | 15,936 | $ | 92,750 |
Years Ended December 31, | ||||||||||||
(in thousands) | 2019 | 2018 | 2017 | |||||||||
Other (expense) income, net | $ | (27,143 | ) | $ | 21,701 | $ | (40,259 | ) |
Years Ended December 31, | ||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | |||||||||
Provision for (benefit from) income taxes | $ | 2,957 | $ | 39,579 | $ | (284,360 | ) | |||||
Effective income tax rate | 5.0 | % | 27.0 | % | (1,726.6 | )% |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Segment revenue | $ | 3,354,163 | $ | 3,182,870 | $ | 2,319,103 | $ | 171,293 | 5.4 | % | $ | 863,767 | 37.2 | % | ||||||||||||
Segment direct costs | 1,162,678 | 1,064,557 | 1,053,557 | 98,121 | 9.2 | 11,000 | 1.0 | |||||||||||||||||||
Segment reimbursed costs | 845,580 | 876,617 | — | (31,037 | ) | (3.5 | ) | 876,617 | — | |||||||||||||||||
Segment SG&A expenses | 529,425 | 475,242 | 464,794 | 54,183 | 11.4 | 10,448 | 2.2 | |||||||||||||||||||
Segment operating income | 816,480 | 766,454 | 800,752 | 50,026 | 6.5 | (34,298 | ) | (4.3 | ) |
Change | ||||||||||||||||||||||||||
Years Ended December 31, | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | $ | % | $ | % | |||||||||||||||||||
Segment revenue | $ | 676,854 | $ | 566,101 | $ | 448,373 | $ | 110,753 | 19.6 | % | $ | 117,728 | 26.3 | % | ||||||||||||
Segment direct costs | 307,346 | 258,472 | 235,137 | 48,874 | 18.9 | 23,335 | 9.9 | |||||||||||||||||||
Segment reimbursed costs | 79,054 | 64,296 | — | 14,758 | 23.0 | 64,296 | — | |||||||||||||||||||
Segment SG&A expenses | 81,373 | 68,305 | 60,097 | 13,068 | 19.1 | 8,208 | 13.7 | |||||||||||||||||||
Segment operating income | 209,081 | 175,028 | 153,139 | 34,053 | 19.5 | 21,889 | 14.3 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Revenue: | |||||||||||
Revenue | $ | 4,031,017 | $ | 3,748,971 | $ | 2,767,476 | |||||
Reimbursed revenue | — | — | 233,574 | ||||||||
Total revenue | 4,031,017 | 3,748,971 | 3,001,050 | ||||||||
Operating costs and expenses: | |||||||||||
Direct costs, exclusive of depreciation and amortization | 1,484,258 | 1,333,812 | 1,302,983 | ||||||||
Reimbursed costs | 924,634 | 940,913 | 233,574 | ||||||||
Selling, general and administrative expenses | 938,806 | 813,035 | 809,333 | ||||||||
Recapitalization costs | — | — | 114,766 | ||||||||
Depreciation and amortization | 264,830 | 258,974 | 279,066 | ||||||||
Goodwill and long-lived asset impairments | 1,284 | 29,626 | 43,459 | ||||||||
Total operating costs and expenses | 3,613,812 | 3,376,360 | 2,783,181 | ||||||||
Income from operations | 417,205 | 372,611 | 217,869 | ||||||||
Interest expense, net of interest income of $5,233, $5,454 and $3,553 in | |||||||||||
2019, 2018 and 2017, respectively | (311,744 | ) | (263,618 | ) | (253,891 | ) | |||||
(Loss) gain on investments | (19,043 | ) | 15,936 | 92,750 | |||||||
Other (expense) income, net | (27,143 | ) | 21,701 | (40,259 | ) | ||||||
Income before provision for (benefit from) income taxes | 59,275 | 146,630 | 16,469 | ||||||||
Provision for (benefit from) income taxes | 2,957 | 39,579 | (284,360 | ) | |||||||
Income before equity in losses of unconsolidated affiliates | 56,318 | 107,051 | 300,829 | ||||||||
Equity in losses of unconsolidated affiliates, net of income taxes | (3,563 | ) | (186 | ) | — | ||||||
Net income | 52,755 | 106,865 | 300,829 | ||||||||
Net income attributable to noncontrolling interest | (4,934 | ) | (2,679 | ) | (4,802 | ) | |||||
Net income attributable to PPD, Inc. | 47,821 | 104,186 | 296,027 | ||||||||
Recapitalization investment portfolio consideration | 6,846 | (7,849 | ) | (97,136 | ) | ||||||
Net income attributable to common stockholders of PPD, Inc. | $ | 54,667 | $ | 96,337 | $ | 198,891 | |||||
Earnings per share attributable to common stockholders of PPD, Inc.: | |||||||||||
Basic | $ | 0.20 | $ | 0.34 | $ | 0.68 | |||||
Diluted | $ | 0.19 | $ | 0.34 | $ | 0.68 | |||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 279,285 | 279,238 | 291,027 | ||||||||
Diluted | 280,693 | 279,317 | 293,826 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income | $ | 52,755 | $ | 106,865 | $ | 300,829 | |||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments, net of income taxes of | |||||||||||
$0, $0 and $16,825 in 2019, 2018 and 2017, respectively | 24,824 | (91,177 | ) | 143,158 | |||||||
Defined benefit pension plan adjustments, net of income taxes of | |||||||||||
($259), $339 and $1,382 in 2019, 2018 and 2017, respectively | (1,314 | ) | 1,504 | 10,923 | |||||||
Derivative instruments adjustments, net of income taxes of | |||||||||||
($2,804), $2,183 and $4,785 in 2019, 2018 and 2017, respectively | (9,523 | ) | 11,159 | 9,219 | |||||||
Other comprehensive income (loss) | 13,987 | (78,514 | ) | 163,300 | |||||||
Comprehensive income | 66,742 | 28,351 | 464,129 | ||||||||
Comprehensive income attributable to noncontrolling interest | (5,144 | ) | (3,159 | ) | (5,315 | ) | |||||
Comprehensive income attributable to PPD, Inc. | 61,598 | 25,192 | 458,814 | ||||||||
Recapitalization investment portfolio consideration | 6,846 | (7,849 | ) | (97,136 | ) | ||||||
Comprehensive income attributable to common stockholders of PPD, Inc. | $ | 68,444 | $ | 17,343 | $ | 361,678 |
Assets | |||||||
December 31, | |||||||
2019 | 2018 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 345,187 | 553,066 | ||||
Accounts receivable and unbilled services, net | 1,326,614 | 1,260,724 | |||||
Income taxes receivable | 27,437 | 16,065 | |||||
Prepaid expenses and other current assets | 119,776 | 102,274 | |||||
Total current assets | 1,819,014 | 1,932,129 | |||||
Property and equipment, net | 458,845 | 399,103 | |||||
Investments in unconsolidated affiliates | 34,028 | 8,756 | |||||
Investments | 250,348 | 265,715 | |||||
Goodwill | 1,764,104 | 1,723,378 | |||||
Intangible assets, net | 892,091 | 1,028,973 | |||||
Other assets | 156,220 | 131,307 | |||||
Operating lease right-of-use assets | 181,596 | — | |||||
Total assets | $ | 5,556,246 | $ | 5,489,361 | |||
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 130,060 | $ | 89,010 | |||
Accrued expenses: | |||||||
Payables to investigators | 322,231 | 355,144 | |||||
Accrued employee compensation | 263,834 | 240,679 | |||||
Accrued interest | 44,527 | 35,681 | |||||
Other accrued expenses | 138,632 | 108,335 | |||||
Income taxes payable | 15,161 | 8,953 | |||||
Unearned revenue | 1,110,872 | 921,964 | |||||
Current portion of operating lease liabilities | 45,962 | — | |||||
Current portion of long-term debt and finance lease obligations | 35,794 | 34,907 | |||||
Total current liabilities | 2,107,073 | 1,794,673 | |||||
Accrued income taxes | 38,465 | 26,597 | |||||
Deferred tax liabilities | 92,225 | 165,114 | |||||
Recapitalization investment portfolio liability | 191,678 | 198,524 | |||||
Long-term operating lease liabilities, less current portion | 153,766 | — | |||||
Long-term debt and finance lease obligations, less current portion | 5,608,134 | 4,760,777 | |||||
Other liabilities | 33,017 | 41,205 | |||||
Total liabilities | 8,224,358 | 6,986,890 | |||||
Commitments and contingencies (Note 1) | |||||||
Redeemable noncontrolling interest | 30,036 | 24,892 | |||||
Stockholders’ deficit: | |||||||
Common stock $0.01 par value, 2,080,000 shares authorized; | |||||||
280,127 shares issued and 279,426 shares outstanding as of | |||||||
December 31, 2019 and 2,080,000 shares authorized; | |||||||
279,545 shares issued and 279,030 shares outstanding as of | 2,801 | 2,795 | |||||
December 31, 2018 | |||||||
Treasury stock, at cost, 701 and 515 shares, respectively, at | (12,707 | ) | (8,933 | ) | |||
December 31, 2019 and December 31, 2018 | |||||||
Additional paid-in-capital | 1,983 | 41,685 | |||||
Accumulated deficit | (2,391,321 | ) | (1,245,077 | ) | |||
Accumulated other comprehensive loss | (298,904 | ) | (312,891 | ) | |||
Total stockholders’ deficit | (2,698,148 | ) | (1,522,421 | ) | |||
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit | $ | 5,556,246 | $ | 5,489,361 |
PPD, Inc. Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Shares | Amount | Paid-in-Capital | Shares | Amount | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
Balance, December 31, 2016 | $ | 19,330 | 313,411 | $ | 3,134 | $ | 4,209 | 1,068 | $ | (9,790 | ) | $ | (397,677 | ) | $ | (564,117 | ) | $ | (964,241 | ) | |||||||||||||||
Net income | 4,802 | — | — | — | — | — | — | 296,027 | 296,027 | ||||||||||||||||||||||||||
Other comprehensive income | 513 | — | — | — | — | — | 163,300 | — | 163,300 | ||||||||||||||||||||||||||
Vesting of restricted stock | — | 19 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | — | 272 | 3 | 1,122 | — | — | — | — | 1,125 | ||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | 201 | (1,808 | ) | — | — | (1,808 | ) | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 74,299 | — | — | — | — | 74,299 | ||||||||||||||||||||||||||
Recapitalization cancellation of treasury stock | — | (1,268 | ) | (12 | ) | 5 | (1,269 | ) | 11,598 | — | (11,591 | ) | — | ||||||||||||||||||||||
Recapitalization share issuances | — | 184,080 | 1,841 | 769,098 | — | — | — | 1,999,062 | 2,770,001 | ||||||||||||||||||||||||||
Recapitalization share redemptions | — | (219,958 | ) | (2,200 | ) | (778,100 | ) | — | — | — | (2,529,576 | ) | (3,309,876 | ) | |||||||||||||||||||||
Recapitalization cash option settlement | — | — | — | (52,207 | ) | — | — | — | (142,299 | ) | (194,506 | ) | |||||||||||||||||||||||
Recapitalization share option settlement | — | 2,391 | 23 | (10 | ) | — | — | — | (13 | ) | — | ||||||||||||||||||||||||
Recapitalization investment portfolio consideration | — | — | — | — | — | — | — | (217,170 | ) | (217,170 | ) | ||||||||||||||||||||||||
Recapitalization tax benefit consideration | — | — | — | — | — | — | — | (105,159 | ) | (105,159 | ) | ||||||||||||||||||||||||
Recapitalization transaction costs | — | — | — | — | — | — | — | (7,279 | ) | (7,279 | ) | ||||||||||||||||||||||||
Employee stock purchases | — | 496 | 5 | 7,462 | — | — | — | — | 7,467 | ||||||||||||||||||||||||||
Purchase of noncontrolling interest | (2,912 | ) | — | — | (3,888 | ) | — | — | — | — | (3,888 | ) | |||||||||||||||||||||||
Other | — | — | — | 28 | — | — | — | — | 28 | ||||||||||||||||||||||||||
Balance, December 31, 2017 | 21,733 | 279,443 | 2,794 | 22,018 | — | — | (234,377 | ) | (1,282,115 | ) | (1,491,680 | ) | |||||||||||||||||||||||
Impact from adoption of ASC 606, net of tax | — | — | — | — | — | — | — | (55,467 | ) | (55,467 | ) | ||||||||||||||||||||||||
Balance, January 1, 2018 | 21,733 | 279,443 | 2,794 | 22,018 | — | — | (234,377 | ) | (1,337,582 | ) | (1,547,147 | ) | |||||||||||||||||||||||
Net income | 2,679 | — | — | — | — | — | — | 104,186 | 104,186 | ||||||||||||||||||||||||||
Other comprehensive income (loss) | 480 | — | — | — | — | — | (78,514 | ) | — | (78,514 | ) | ||||||||||||||||||||||||
Vesting of restricted stock | — | 9 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | — | 61 | 1 | 922 | — | — | — | — | 923 | ||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | 515 | (8,933 | ) | — | — | (8,933 | ) | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 18,265 | — | — | — | — | 18,265 | ||||||||||||||||||||||||||
Recapitalization investment portfolio consideration | — | — | — | — | — | — | — | (7,849 | ) | (7,849 | ) | ||||||||||||||||||||||||
Recapitalization tax benefit consideration | — | — | — | — | — | — | — | (3,161 | ) | (3,161 | ) | ||||||||||||||||||||||||
Employee stock purchases | — | 32 | — | 480 | — | — | — | — | 480 | ||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | (671 | ) | (671 | ) | ||||||||||||||||||||||||
Balance, December 31, 2018 | 24,892 | 279,545 | 2,795 | 41,685 | 515 | (8,933 | ) | (312,891 | ) | (1,245,077 | ) | (1,522,421 | ) | ||||||||||||||||||||||
Net income | 4,934 | — | — | — | — | — | — | 47,821 | 47,821 | ||||||||||||||||||||||||||
Other comprehensive income | 210 | — | — | — | — | — | 13,987 | — | 13,987 | ||||||||||||||||||||||||||
Vesting of restricted stock | — | 13 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock for stock option exercises | — | 301 | 3 | 4,521 | — | — | — | — | 4,524 | ||||||||||||||||||||||||||
Issuance of common stock for acquisition | — | 268 | 3 | 4,998 | — | — | — | — | 5,001 | ||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | 186 | (3,774 | ) | — | — | (3,774 | ) | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 15,632 | — | — | — | — | 15,632 | ||||||||||||||||||||||||||
Modification of stock option awards to cash and liability awards | — | — | — | (19,669 | ) | — | — | — | — | (19,669 | ) | ||||||||||||||||||||||||
Return of capital and special dividend to stockholders | — | — | — | (45,184 | ) | — | — | — | (1,200,816 | ) | (1,246,000 | ) | |||||||||||||||||||||||
Recapitalization investment portfolio consideration | — | — | — | — | — | — | — | 6,846 | 6,846 | ||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | (95 | ) | (95 | ) | ||||||||||||||||||||||||
Balance, December 31, 2019 | $ | 30,036 | 280,127 | $ | 2,801 | $ | 1,983 | 701 | $ | (12,707 | ) | $ | (298,904 | ) | $ | (2,391,321 | ) | $ | (2,698,148 | ) |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 52,755 | $ | 106,865 | $ | 300,829 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 264,830 | 258,974 | 279,066 | ||||||||
Goodwill and long-lived asset impairments | 1,284 | 29,626 | 43,459 | ||||||||
Stock-based compensation expense | 15,632 | 18,265 | 74,299 | ||||||||
Non-cash operating lease expense | 40,633 | — | — | ||||||||
Amortization of debt issuance and modification costs and debt discount | 17,768 | 10,082 | 9,001 | ||||||||
Amortization of accumulated other comprehensive income on terminated interest rate swaps | (9,523 | ) | (5,269 | ) | — | ||||||
Loss (gain) on investments | 19,043 | (15,936 | ) | (92,750 | ) | ||||||
Benefit from deferred income taxes | (84,795 | ) | (26,062 | ) | (317,385 | ) | |||||
Amortization of costs to obtain a contract | 11,432 | 8,693 | — | ||||||||
Other | 12,929 | (11,691 | ) | 2,834 | |||||||
Change in operating assets and liabilities, net of effect of businesses acquired or sold: | |||||||||||
Accounts receivable and unbilled services, net | (28,075 | ) | (144,822 | ) | (12,300 | ) | |||||
Prepaid expenses and other current assets | (11,465 | ) | 18,510 | 36,787 | |||||||
Other assets | (31,288 | ) | (26,819 | ) | (37,118 | ) | |||||
Income taxes, net | 7,712 | 606 | (10,278 | ) | |||||||
Accounts payable, accrued expenses and other liabilities | 26,283 | (4,443 | ) | 102,974 | |||||||
Operating lease liabilities | (39,065 | ) | — | — | |||||||
Unearned revenue | 166,856 | 206,827 | (20,339 | ) | |||||||
Net cash provided by operating activities | 432,946 | 423,406 | 359,079 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (125,928 | ) | (116,145 | ) | (105,135 | ) | |||||
Acquisitions of businesses, net of cash and cash equivalents acquired | (74,187 | ) | 224 | (24,219 | ) | ||||||
Capital contributions paid for investments | (4,069 | ) | (1,546 | ) | (1,844 | ) | |||||
Distributions received from investments | 452 | 27,778 | 36,397 | ||||||||
Investments in unconsolidated affiliates | (30,000 | ) | (9,000 | ) | — | ||||||
Proceeds from sale of business | — | 8,000 | — | ||||||||
Other | 504 | 164 | 2,058 | ||||||||
Net cash used in investing activities | (233,228 | ) | (90,525 | ) | (92,743 | ) | |||||
Cash flows from financing activities: | |||||||||||
Purchase of treasury stock | (4,012 | ) | (8,630 | ) | (1,808 | ) | |||||
Proceeds from exercise of stock options | 4,524 | 923 | 1,125 | ||||||||
Proceeds from issuance of HoldCo notes | 891,000 | — | 550,000 | ||||||||
Payments on long-term debt and finance leases | (37,409 | ) | (35,387 | ) | (35,012 | ) | |||||
Purchase of noncontrolling interest | — | — | (7,080 | ) | |||||||
Payment of debt issuance and debt modification costs | (30,142 | ) | — | (11,939 | ) | ||||||
Proceeds from recapitalization share issuance | — | — | 2,770,001 | ||||||||
Payout for recapitalization share redemptions | — | — | (3,309,876 | ) | |||||||
Recapitalization cash option settlement | — | — | (194,506 | ) | |||||||
Recapitalization transaction costs | — | — | (7,279 | ) | |||||||
Recapitalization tax benefit distribution | — | (108,320 | ) | — | |||||||
Recapitalization investment portfolio distribution | — | (16,008 | ) | (10,486 | ) | ||||||
Proceeds from employee stock purchases | — | 480 | 7,467 | ||||||||
Return of capital and special dividend to stockholders | (1,246,000 | ) | — | — | |||||||
Net cash used in financing activities | (422,039 | ) | (166,942 | ) | (249,393 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 14,442 | (31,833 | ) | 40,276 | |||||||
Net (decrease) increase in cash and cash equivalents | (207,879 | ) | 134,106 | 57,219 | |||||||
Cash and cash equivalents, beginning of the period | 553,066 | 418,960 | 361,741 | ||||||||
Cash and cash equivalents, end of the period | $ | 345,187 | $ | 553,066 | $ | 418,960 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Other (expense) income, net: | |||||||||||
Foreign currency (losses) gains, net | $ | (24,659 | ) | $ | 16,682 | $ | (40,132 | ) | |||
Other income | 3,778 | 8,728 | 706 | ||||||||
Other expense | (6,262 | ) | (3,709 | ) | (833 | ) | |||||
Total other (expense) income, net | $ | (27,143 | ) | $ | 21,701 | $ | (40,259 | ) |
2019 | 2018 | 2017 | |||||||||
Cash paid for interest (for the years ended December 31) | $ | 300,528 | $ | 262,921 | $ | 238,826 | |||||
Cash paid for income taxes, net (for the years ended December 31) | 72,510 | 64,714 | 43,438 | ||||||||
Purchases of property and equipment in current liabilities (as of December 31) | 29,924 | 17,461 | 22,725 |
Buildings | 20-40 years |
Furniture and equipment | 4-18 years |
Computer equipment and software | 1-5 years |
Trade names | 10-23 years |
Investigator/payer network | 5-10 years |
Technology/intellectual property | 2-8 years |
Know-how/processes | 7-10 years |
Backlog | 1-6 years |
Customer relationships | 13-23 years |
• | each issued and outstanding share of Jaguar I common stock was automatically canceled and converted into one share of initial PPD common stock; |
• | shares of Jaguar I common stock held in treasury were canceled and retired for no cash or other consideration; and |
• | PPD assumed the Jaguar I 2011 Equity Incentive Plan (the “Jaguar I Plan”) and each outstanding option to purchase Jaguar I common stock (a “Jaguar I Option”) was converted into an equivalent option to purchase the same number of shares of initial PPD common stock (a “PPD Option”), including the same terms, conditions and vesting requirements in place prior to the Reorganization Merger. |
• | the Conversion occurred; |
• | Buyer was funded with cash equity contributions totaling $770.2 million from investment funds affiliated with the Sponsors in exchange for the issuance of 51.1 million shares; and |
• | a rollover of initial PPD common stock by one of the Sponsor affiliates and certain members of management occurred (collectively, the “Rollover Sellers”) for a total of $1.4 billion, whereby the Rollover Sellers contributed 92.5 million shares of initial PPD common stock (the “Rollover Shares”) in exchange for the same number of shares of Buyer common stock, plus the right to receive additional consideration as described below. |
• | 87.1 million shares of initial PPD common stock (including PPD restricted stock) issued and outstanding were canceled and converted into and became the right to receive from Buyer, without interest, $1.3 billion in cash consideration plus additional consideration as described below; |
• | shares common stock of Buyer were converted into shares of PPD common stock, respectively; |
• | outstanding initial PPD Options, whether or not vested or exercisable, became fully vested and were canceled and converted into the right to receive (i) the excess of the per share consideration over the applicable exercise price multiplied by the number of shares issuable upon exercise (the “PPD Option Consideration”), (ii) unpaid special cash bonuses (previously awarded, unvested and unpaid) with respect to such Jaguar I Options (“Special Cash Bonuses”) and (iii) additional consideration as described below. Certain members of management who held initial PPD Options received a portion of their PPD Option Consideration in the form of 2.4 million shares of PPD common stock. Refer below for more information on PPD Option Consideration and Special Cash Bonuses; |
• | 132.8 million shares of initial PPD common stock issued and outstanding were cancelled and converted into $2.0 billion of cash consideration payable to certain affiliates of the Majority Sponsors which was deferred (the “Deferred Recapitalization Payment”) until September 29, 2017 (the “Deferred Payment Date”). Refer below for more information on the Deferred Recapitalization Payment; and |
• | the owners of initial PPD common stock after the Reorganization Merger and prior to the Recapitalization Merger (including the Rollover Sellers) and holders of initial PPD Options (collectively, the “Pre-Closing Holders”) each became entitled to receive additional consideration (“Additional Recapitalization Consideration”) related to certain tax benefits anticipated to be received by PPD as a result of the Recapitalization (as specified in the Merger Agreement) and a portion of future cash distributions, if any, to be received by the Company from its investments held at the time of the Recapitalization (the “Investment Portfolio”). Refer below for more information on the Additional Recapitalization Consideration. |
• | Eagle II issued $550.0 million of senior unsecured notes, the proceeds of which were used to pay, in part, the cash consideration for the Recapitalization, the PPD Option Consideration and fees and expenses related to the Recapitalization. See Note 10, “Long-term Debt and Finance Lease Obligations” for additional information on the senior unsecured notes; and |
• | the Company incurred $70.4 million of fees and expenses (“Transaction Costs”) related to the Recapitalization. |
• | a comparison of actual total costs incurred in the current month to the budgeted total costs for the month; |
• | detailed input from project teams relating to the status of the project, including the rate of enrollment, the ability to complete individual tasks in the time allotted, the anticipated total units to be achieved, an assessment of expected third-party pass-through and out-of-pocket costs and potential changes to the project scope; |
• | a comparison of third-party pass-through and out-of-pocket costs to direct costs and direct units to be achieved; |
• | a comparison of the fees invoiced and collected to revenue recognized; |
• | a review of experience on projects recently completed or currently running; and |
• | a review of specific customer and industry changes. |
December 31, | |||||||
2019 | 2018 | ||||||
Accounts receivable | $ | 726,111 | $ | 700,280 | |||
Unbilled services | 609,674 | 565,473 | |||||
Total accounts receivable and unbilled services | 1,335,785 | 1,265,753 | |||||
Allowance for doubtful accounts | (9,171 | ) | (5,029 | ) | |||
Total accounts receivable and unbilled services, net | $ | 1,326,614 | $ | 1,260,724 |
December 31, | ||||||||
2019 | 2018 | |||||||
Unearned revenue | $ | 1,110,872 | $ | 921,964 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Balance at the beginning of the period | $ | (5,029 | ) | $ | (4,904 | ) | $ | (3,105 | ) | ||
Current year provision | (4,243 | ) | (618 | ) | (3,466 | ) | |||||
Write-offs | 101 | 493 | 1,667 | ||||||||
Balance at the end of the period | $ | (9,171 | ) | $ | (5,029 | ) | $ | (4,904 | ) |
December 31, | |||||||
2019 | 2018 | ||||||
Capitalized costs to obtain a contract, net | $ | 25,766 | $ | 23,062 | |||
Years Ended December 31, | |||||||
2019 | 2018 | ||||||
Amortization of costs to obtain a contract | $ | 11,432 | $ | 8,693 |
Years Ended December 31, | |||||
2019 | 2018 | 2017 | |||
Expected term (years) | 6.5 | 6.5 | 6.5 | ||
Risk-free interest rate (%) | 2.3 | 2.6 | 2.1 | ||
Expected volatility (%) | 26.4 | 25.0 | 26.0 | ||
Expected dividend (%) | — | — | — |
Stock Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Aggregate Intrinsic Value as of December 31, 2019 | |||||||||
Outstanding at January 1, 2019 | 19,630 | $ | 15.28 | 8.6 years | ||||||||
Granted | 2,367 | 19.62 | ||||||||||
Exercised | (301 | ) | 15.06 | |||||||||
Forfeited | (1,108 | ) | 15.00 | |||||||||
Expired | (285 | ) | 15.23 | |||||||||
Outstanding at December 31, 2019 | 20,303 | $ | 14.10 | 7.8 years | $ | 154,203 | ||||||
Exercisable at December 31, 2019 | 7,162 | $ | 14.31 | 7.6 years | $ | 52,944 | ||||||
Vested or expected to vest at December 31, 2019 | 17,753 | $ | 14.57 | 7.9 years | $ | 126,662 |
Stock Options Outstanding | Stock Options Exercisable | ||||||||||||||||
Exercise Price | Number Outstanding at December 31, 2019 | Weighted-Average Remaining Contractual Life | Weighted-Average Exercise Price | Number Exercisable at December 31, 2019 | Weighted-Average Exercise Price | ||||||||||||
Time-based | $ 14.35 - $ 21.70 | 8,870 | 7.9 years | $ | 15.89 | 2,725 | $ | 15.18 | |||||||||
Performance-based | 9.89 - 21.70 | 9,048 | 7.9 years | 13.20 | 4,437 | 13.77 | |||||||||||
Liquidity/realization event-based | 10.59 - 21.70 | 2,385 | 7.6 years | 10.88 | — | — |
Restricted Stock | Weighted-Average Grant Date Fair Value | |||||
Unvested at January 1, 2019 | 11 | $ | 15.39 | |||
Granted | 12 | 18.66 | ||||
Vested | (14 | ) | 16.48 | |||
Unvested at December 31, 2019 | 9 | $ | 18.05 |
December 31, 2019 | December 31, 2018 | ||||
Shares authorized | 2,080,000 | 2,080,000 | |||
Shares issued | 280,127 | 279,545 | |||
Shares outstanding: | |||||
Voting | 276,052 | 276,052 | |||
Non-voting | 3,374 | 2,978 | |||
Total shares outstanding | 279,426 | 279,030 |
Acquired Intangible Assets | Weighted-Average Amortization Period (in years) | |||||
Customer relationships | $ | 2,000 | 15 | |||
Know-how/processes | 1,800 | 8 | ||||
Investigator network | 1,900 | 8 | ||||
Trade names | 1,400 | 10 | ||||
Total | $ | 7,100 | 10 |
Purchase price | $ | 45,187 | |
Identifiable assets acquired: | |||
Cash and cash equivalents | $ | 6,003 | |
Accounts receivable and unbilled services, net | 23,143 | ||
Prepaid expenses and other current assets | 3,817 | ||
Property and equipment | 19,273 | ||
Intangible assets | 7,100 | ||
Other assets | 5,403 | ||
Operating lease right-of-use assets | 1,609 | ||
Total identifiable assets acquired | 66,348 | ||
Liabilities assumed: | |||
Accounts payable | (5,565 | ) | |
Other accrued expenses | (4,026 | ) | |
Unearned revenue | (7,210 | ) | |
Long-term debt and finance lease obligations | (38 | ) | |
Deferred tax liabilities | (3,447 | ) | |
Other liabilities | (331 | ) | |
Operating lease liabilities | (1,609 | ) | |
Total liabilities assumed | (22,226 | ) | |
Separately identifiable net assets acquired | 44,122 | ||
Goodwill | 1,065 | ||
Total net assets | $ | 45,187 |
Acquired Intangible Assets | Weighted-Average Amortization Period (in years) | |||||
Customer relationships | $ | 7,500 | 13 | |||
Trade names | 900 | 10 | ||||
Technology/intellectual property | 5,100 | 8 | ||||
Total | $ | 13,500 | 11 |
Acquired Intangible Assets | Weighted-Average Amortization Period (in years) | |||||
Customer relationships | $ | 5,300 | 15 | |||
Backlog | 120 | 2 | ||||
Investigator network | 1,800 | 8 | ||||
Know-how/processes | 4,800 | 10 | ||||
Total | $ | 12,020 | 12 |
Business Combination | Time Period | Net Revenue | Net (Loss) Income | |||||
Synarc | September 3, 2019 to December 31, 2019 | $ | 17,170 | Insignificant | ||||
Medimix | July 1, 2019 to December 31, 2019 | 5,996 | Insignificant | |||||
Optimal | September 1, 2017 to December 31, 2017 | 3,339 | Insignificant |
December 31, | |||||||
2019 | 2018 | ||||||
Medable, Inc. | $ | 15,684 | $ | 8,756 | |||
Science 37, Inc. | 18,344 | — | |||||
Total | $ | 34,028 | $ | 8,756 |
December 31, | |||||||
2019 | 2018 | ||||||
Auven Therapeutics Holdings, L.P. | $ | 228,959 | $ | 241,305 | |||
venBio Global Strategic Fund, L.P. | 14,108 | 12,690 | |||||
Venture capital funds and investment partnerships | 5,386 | 2,129 | |||||
Other investments | 1,895 | 9,591 | |||||
Total | $ | 250,348 | $ | 265,715 |
December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net investment (loss) income (for the years ended December 31) | $ | (280,962 | ) | $ | (140,943 | ) | $ | 598,285 | |||
Total assets (as of December 31) | 1,396,040 | 1,645,063 | 2,005,154 | ||||||||
Total liabilities (as of December 31) | 30,812 | 2,105 | 126,407 |
December 31, | |||||||
2019 | 2018 | ||||||
Land | $ | 6,795 | $ | 6,809 | |||
Buildings and leasehold improvements | 384,975 | 345,262 | |||||
Furniture and equipment | 264,233 | 245,522 | |||||
Computer equipment and software | 311,381 | 307,126 | |||||
Construction-in-progress, including information | |||||||
technology systems under development | 76,972 | 39,110 | |||||
Total property and equipment | 1,044,356 | 943,829 | |||||
Less: accumulated depreciation and amortization | (585,511 | ) | (544,726 | ) | |||
Property and equipment, net | $ | 458,845 | $ | 399,103 |
Total | Clinical Development Services | Laboratory Services | |||||||||
Balance at December 31, 2017: | |||||||||||
Goodwill | $ | 1,887,805 | $ | 1,661,191 | $ | 226,614 | |||||
Accumulated impairment losses | (97,085 | ) | (69,806 | ) | (27,279 | ) | |||||
Goodwill, net | 1,790,720 | 1,591,385 | 199,335 | ||||||||
2018 Activity: | |||||||||||
Translation adjustments | (38,707 | ) | (38,707 | ) | — | ||||||
Goodwill impairment | (29,626 | ) | (29,626 | ) | — | ||||||
Measurement period adjustments for prior acquisition | 991 | 991 | — | ||||||||
Balance at December 31, 2018: | |||||||||||
Goodwill | 1,850,089 | 1,623,475 | 226,614 | ||||||||
Accumulated impairment losses | (126,711 | ) | (99,432 | ) | (27,279 | ) | |||||
Goodwill, net | 1,723,378 | 1,524,043 | 199,335 | ||||||||
2019 Activity: | |||||||||||
Translation adjustments | 12,814 | 12,814 | — | ||||||||
Goodwill recorded from current year acquisitions | 27,912 | 27,912 | — | ||||||||
Balance at December 31, 2019: | |||||||||||
Goodwill | 1,890,815 | 1,664,201 | 226,614 | ||||||||
Accumulated impairment losses | (126,711 | ) | (99,432 | ) | (27,279 | ) | |||||
Goodwill, net | $ | 1,764,104 | $ | 1,564,769 | $ | 199,335 |
December 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Carrying Amount | Accumulated Amortization | Net | Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||
Customer relationships | $ | 884,788 | $ | (415,427 | ) | $ | 469,361 | $ | 870,648 | $ | (356,099 | ) | $ | 514,549 | ||||||||||
Trade names | 372,210 | (139,141 | ) | 233,069 | 368,189 | (121,614 | ) | 246,575 | ||||||||||||||||
Backlog | 177,599 | (175,571 | ) | 2,028 | 176,610 | (172,884 | ) | 3,726 | ||||||||||||||||
Investigator/payer network | 236,082 | (185,478 | ) | 50,604 | 233,356 | (161,219 | ) | 72,137 | ||||||||||||||||
Technology/intellectual property | 8,600 | (3,319 | ) | 5,281 | 3,500 | (2,700 | ) | 800 | ||||||||||||||||
Know-how/processes | 586,971 | (455,223 | ) | 131,748 | 582,011 | (391,593 | ) | 190,418 | ||||||||||||||||
Favorable leases | — | — | — | 1,700 | (932 | ) | 768 | |||||||||||||||||
Total | $ | 2,266,250 | $ | (1,374,159 | ) | $ | 892,091 | $ | 2,236,014 | $ | (1,207,041 | ) | $ | 1,028,973 |
Year | Amortization Expense | |||
2020 | $ | 157,935 | ||
2021 | 145,842 | |||
2022 | 74,678 | |||
2023 | 67,652 | |||
2024 | 61,390 | |||
Thereafter | 384,594 | |||
Total future amortization expense | $ | 892,091 |
December 31, | |||||||||||||
Maturity Date | Effective Rate | Stated Rate | 2019 | 2018 | |||||||||
Term Loan | August 2022 | 4.51% | 4.30% | $ | 3,096,429 | $ | 3,128,852 | ||||||
OpCo Notes | August 2023 | 6.61% | 6.38% | 1,125,000 | 1,125,000 | ||||||||
Initial HoldCo Notes | May 2022 | 8.92% | 7.63% | 550,000 | 550,000 | ||||||||
Additional HoldCo Notes | May 2022 | 8.90% | 7.75% | 900,000 | — | ||||||||
Other debt | April 2025 | 1.13% | 1.13% | 5,707 | 8,950 | ||||||||
Finance lease obligations | Various | Various | Various | 28,726 | 23,815 | ||||||||
5,705,862 | 4,836,617 | ||||||||||||
Unamortized debt discount | (13,956 | ) | (9,008 | ) | |||||||||
Unamortized debt issuance costs | (47,978 | ) | (31,925 | ) | |||||||||
Current portion of long-term debt and finance lease obligations | (35,794 | ) | (34,907 | ) | |||||||||
Long-term debt and finance lease obligations, less current portion | $ | 5,608,134 | $ | 4,760,777 |
Maturity Date | Interest Rate | Committed Credit | Available Credit December 31, 2019 | Available Credit December 31, 2018 | |||||||||||
Revolving Credit Facility | May 15, 2022 | LIBOR + 3.25% | $ | 300,000 | $ | 298,370 | $ | 298,370 |
Period | Redemption Price | ||
2019 | 103.188 | % | |
2020 | 101.594 | % | |
2021 and thereafter | 100.000 | % |
Year | Amount | |||
2020 | $ | 35,794 | ||
2021 | 36,014 | |||
2022 | 4,485,451 | |||
2023 | 1,128,587 | |||
2024 | 3,477 | |||
Thereafter | 16,539 | |||
Total | $ | 5,705,862 |
Classification | December 31, 2019 | |||
Property and equipment, net | $ | 23,084 | ||
Current portion of long-term debt and finance lease obligations | $ | 2,861 | ||
Long-term debt and finance lease obligations, less current portion | 24,510 | |||
Total finance lease liabilities | $ | 27,371 |
Lease expenses | Year Ended December 31, 2019 | |||
Finance lease cost: | ||||
Amortization of ROU assets | $ | 2,497 | ||
Interest on lease liabilities | 1,968 | |||
Operating lease expense | 54,179 | |||
Short-term lease expense | 1,301 | |||
Variable lease expense | 15,804 | |||
Total lease expense | $ | 75,749 |
Year Ended December 31, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows for operating leases | $ | 52,502 | ||
Operating cash flows for finance leases | 1,968 | |||
Financing cash flows for finance leases | 1,948 | |||
ROU assets obtained in exchange for lease obligations: | ||||
Operating leases | 42,520 | |||
Finance leases | 3,736 |
December 31, 2019 | |||
Weighted-average remaining lease term: | |||
Operating leases | 6.3 years | ||
Finance leases | 8.5 years | ||
Weighted-average discount rate: | |||
Operating leases | 5.8 | % | |
Finance leases | 7.2 | % |
Year | Operating Leases | Finance Leases | Total | |||||||||
2020 | $ | 55,907 | $ | 4,730 | $ | 60,637 | ||||||
2021 | 49,195 | 4,865 | 54,060 | |||||||||
2022 | 35,476 | 5,000 | 40,476 | |||||||||
2023 | 25,822 | 4,610 | 30,432 | |||||||||
2024 | 18,239 | 4,335 | 22,574 | |||||||||
2025 and thereafter | 58,479 | 12,069 | 70,548 | |||||||||
Total lease payments | 243,118 | 35,609 | 278,727 | |||||||||
Less: imputed interest | (43,390 | ) | (8,238 | ) | (51,628 | ) | ||||||
Total | $ | 199,728 | $ | 27,371 | $ | 227,099 |
Year | Operating Leases | Capital Leases | Total | |||||||||
2019 | $ | 55,120 | $ | 2,484 | $ | 57,604 | ||||||
2020 | 52,228 | 2,458 | 54,686 | |||||||||
2021 | 43,490 | 2,751 | 46,241 | |||||||||
2022 | 29,131 | 3,032 | 32,163 | |||||||||
2023 | 19,829 | 2,773 | 22,602 | |||||||||
2024 and thereafter | 71,895 | 10,317 | 82,212 | |||||||||
Total lease payments | $ | 271,693 | $ | 23,815 | $ | 295,508 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Domestic | $ | 668,036 | $ | 118,393 | $ | (219,274 | ) | ||||
Foreign | (608,761 | ) | 28,237 | 235,743 | |||||||
Income before provision for (benefit from) income taxes | $ | 59,275 | $ | 146,630 | $ | 16,469 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
U.S. federal income taxes: | |||||||||||
Current | $ | 32,051 | $ | 16,775 | $ | 7,252 | |||||
Deferred | (55,206 | ) | (24,426 | ) | (293,164 | ) | |||||
U.S. state income taxes: | |||||||||||
Current | 1,614 | 2,843 | 3,406 | ||||||||
Deferred | (18,658 | ) | (3,038 | ) | (15,074 | ) | |||||
Foreign income taxes: | |||||||||||
Current | 44,657 | 49,411 | 25,192 | ||||||||
Deferred | (1,501 | ) | (1,986 | ) | (11,972 | ) | |||||
Provision for (benefit from) income taxes | $ | 2,957 | $ | 39,579 | $ | (284,360 | ) |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Effective tax rate | 5.0 | % | 27.0 | % | (1,726.6 | )% | |||||
Income tax expense at federal statutory rate | $ | 12,461 | $ | 30,792 | $ | 5,764 | |||||
State taxes, net of federal tax benefit | (13,437 | ) | (706 | ) | (4,577 | ) | |||||
Nondeductible interest | 7,781 | 9,749 | 7,643 | ||||||||
Residual tax impact on foreign earnings | — | — | (91,820 | ) | |||||||
Research and development credits | (11,206 | ) | (9,609 | ) | (9,321 | ) | |||||
Other nondeductible transaction costs | 1,226 | — | — | ||||||||
Recapitalization costs, net | — | — | (36,403 | ) | |||||||
Goodwill impairment | — | 6,221 | 13,431 | ||||||||
Rate change | — | — | (110,290 | ) | |||||||
Change in valuation allowance | (6,550 | ) | 8,532 | (6,318 | ) | ||||||
Foreign tax rate differential | 39,776 | (40,724 | ) | (50,222 | ) | ||||||
Foreign tax credit | (39,456 | ) | (24,999 | ) | — | ||||||
Global intangible low-taxed income | 65,918 | 46,269 | — | ||||||||
Foreign-derived intangible income | — | (6,225 | ) | — | |||||||
Provision to return adjustment | (2,948 | ) | (9,098 | ) | (1,116 | ) | |||||
Other taxes | 1,542 | 2,358 | 1,645 | ||||||||
Other permanent items | 3,623 | 2,417 | (1,571 | ) | |||||||
Intercompany financing | (67,607 | ) | 13,981 | (3,780 | ) | ||||||
Effect of double taxation, net of dividend received | 2,164 | 4,022 | 4,598 | ||||||||
Unrecognized tax benefits | 9,807 | 6,541 | (1,752 | ) | |||||||
Other, net | (137 | ) | 58 | (271 | ) | ||||||
Provision for (benefit from) income taxes | $ | 2,957 | $ | 39,579 | $ | (284,360 | ) |
December 31, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||
Property and equipment and intangible assets | $ | — | $ | 232,945 | $ | — | $ | 255,583 | |||||||
Operating lease obligations/ROU assets | 49,932 | 46,404 | — | — | |||||||||||
Accrued expenses | 26,412 | — | 15,611 | — | |||||||||||
Investment basis difference | — | 32,066 | — | 39,854 | |||||||||||
Stock options and restricted stock | 11,173 | — | 8,793 | — | |||||||||||
Future benefit of tax credits | 25,920 | — | 19,755 | — | |||||||||||
Future benefit of carryforward losses | 53,077 | — | 57,042 | — | |||||||||||
Uncertain tax benefits | 1,026 | — | 4,227 | — | |||||||||||
Unearned revenue | 32,230 | — | 49,044 | — | |||||||||||
Other | 21,410 | 25,800 | 34,584 | 34,099 | |||||||||||
Disallowed interest carryforward | 78,697 | — | 74,221 | — | |||||||||||
Valuation allowance | (38,178 | ) | — | (88,980 | ) | — | |||||||||
Total deferred income taxes | $ | 261,699 | $ | 337,215 | $ | 174,297 | $ | 329,536 |
December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Balance at the beginning of the period | $ | (88,980 | ) | $ | (78,025 | ) | $ | (79,740 | ) | ||
Additions charged to costs and expenses | (2,463 | ) | (11,527 | ) | (5,375 | ) | |||||
Additions or reductions charged to other accounts (1) | 43,418 | — | (197 | ) | |||||||
Reductions charged to costs and expenses | 9,847 | 572 | 7,287 | ||||||||
Balance at end of the period | $ | (38,178 | ) | $ | (88,980 | ) | $ | (78,025 | ) |
December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Unrecognized tax benefit at beginning of period | $ | 28,442 | $ | 21,890 | $ | 20,102 | |||||
Gross increases - tax positions in prior period | 5,997 | 6,408 | 4,606 | ||||||||
Gross decreases - tax positions in prior period | (7,967 | ) | (277 | ) | (839 | ) | |||||
Gross increases - tax positions in current period | 13,908 | 7,970 | 1,488 | ||||||||
Foreign exchange rate movements | 49 | (275 | ) | 161 | |||||||
Lapse of statute | (696 | ) | (7,274 | ) | (3,628 | ) | |||||
Unrecognized tax benefit at end of period | $ | 39,733 | $ | 28,442 | $ | 21,890 |
Pre-Tax Gain Recognized in OCI or OCL | |||||||||||||
Derivatives in Cash Flow Hedging Relationships | Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | |||||||||||
Foreign currency forward contracts | $ | — | $ | — | $ | 4,708 | |||||||
Interest rate swaps | — | 18,960 | 2,269 |
Pre-Tax Gain (Loss) Reclassified from AOCL or AOCI into Income | ||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Gain (Loss) Reclassified from AOCL or AOCI into Statements of Operations | Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Foreign currency forward contracts | Revenue | $ | — | $ | — | $ | 1,887 | |||||||
Foreign currency forward contracts | Direct costs | — | — | 3,000 | ||||||||||
Interest rate swaps | Interest expense, net | 12,327 | 5,618 | (11,914 | ) |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net periodic pension cost (credit): | |||||||||||
Interest cost | $ | 2,397 | $ | 2,370 | $ | 2,596 | |||||
Expected return on plan assets | (2,106 | ) | (3,195 | ) | (4,125 | ) | |||||
Amortization of actuarial loss | 605 | 784 | 1,693 | ||||||||
Net periodic pension cost (credit) | $ | 896 | $ | (41 | ) | $ | 164 | ||||
Other changes in plan assets and benefit obligations recognized in OCL or (OCI): | |||||||||||
Net actuarial loss (gain) arising during period | $ | 2,180 | $ | (1,169 | ) | $ | (11,881 | ) | |||
Amortization of actuarial loss | (605 | ) | (784 | ) | (1,693 | ) | |||||
Foreign currency translation adjustment | — | 110 | 1,269 | ||||||||
Total OCL or (OCI) | $ | 1,575 | $ | (1,843 | ) | $ | (12,305 | ) | |||
Total recognized in net periodic pension cost (credit) and OCL or (OCI) | $ | 2,471 | $ | (1,884 | ) | $ | (12,141 | ) |
Years Ended December 31, | |||||
2019 | 2018 | 2017 | |||
Discount rate | 3.0% | 2.6% | 2.7% | ||
Rate of compensation increase | 3.7% | 3.7% | 3.7% | ||
Long-term rate of return on plan assets | 2.5% | 3.7% | 5.6% |
December 31, | |||||||
2019 | 2018 | ||||||
Change in benefit obligation: | |||||||
Projected benefit obligation, beginning of year | $ | 80,435 | $ | 91,356 | |||
Interest cost | 2,397 | 2,370 | |||||
Net actuarial loss (gain) | 11,287 | (6,400 | ) | ||||
Plan amendments | — | 135 | |||||
Benefits paid | (2,465 | ) | (2,168 | ) | |||
Foreign currency translation adjustment | 811 | (4,858 | ) | ||||
Projected benefit obligation, end of year | $ | 92,465 | $ | 80,435 | |||
Change in plan assets: | |||||||
Fair value of plan assets, beginning of year | $ | 84,894 | $ | 88,794 | |||
Actual return on plan assets | 11,254 | (1,716 | ) | ||||
Employer contributions | — | 5,077 | |||||
Benefits paid | (2,465 | ) | (2,168 | ) | |||
Foreign currency translation adjustment | 867 | (5,093 | ) | ||||
Fair value of plan assets, end of year | $ | 94,550 | $ | 84,894 | |||
Funded status recorded as other assets | $ | 2,085 | $ | 4,459 |
December 31, | |||||||
2019 | 2018 | ||||||
Projected benefit obligation | $ | 92,465 | $ | 80,435 | |||
Accumulated benefit obligation | 89,637 | 76,676 | |||||
Fair value of plan assets | 94,550 | 84,894 |
Year | Amount | |||
2021 | $ | 3,639 | ||
2022 | 3,769 | |||
Total | $ | 7,408 |
December 31, | |||
2019 | 2018 | ||
Discount rate | 2.1% | 3.0% | |
Rate of compensation increase | 3.6% | 3.7% |
Weighted-Average Asset Allocation | |||||||||
Target | December 31, | ||||||||
Asset Category | Allocation | 2019 | 2018 | ||||||
Equity securities | 38.5 | % | 39.0 | % | 38.9 | % | |||
Debt securities | 61.5 | % | 60.8 | % | 61.0 | % | |||
Cash | — | % | 0.2 | % | 0.1 | % | |||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
December 31, | ||||||||
2019 | 2018 | |||||||
Equity securities | $ | 36,832 | $ | 32,973 | ||||
Debt securities | 57,531 | 51,819 | ||||||
Cash | 187 | 102 | ||||||
Total | $ | 94,550 | $ | 84,894 |
Year | Amount | |||
2020 | $ | 941 | ||
2021 | 955 | |||
2022 | 971 | |||
2023 | 986 | |||
2024 | 1,002 | |||
Next 5 years | 5,248 | |||
Total | $ | 10,103 |
As of December 31, 2019 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Investments | $ | 1,895 | $ | — | $ | 248,453 | $ | 250,348 | |||||||
Total assets | $ | 1,895 | $ | — | $ | 248,453 | $ | 250,348 | |||||||
Liabilities | |||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 9,489 | $ | 9,489 | |||||||
Recapitalization investment portfolio liability | — | — | 191,678 | 191,678 | |||||||||||
Total liabilities | $ | — | $ | — | $ | 201,167 | $ | 201,167 |
As of December 31, 2018 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets | |||||||||||||||
Investments | $ | 9,591 | $ | — | $ | 256,124 | $ | 265,715 | |||||||
Total assets | $ | 9,591 | $ | — | $ | 256,124 | $ | 265,715 | |||||||
Liability | |||||||||||||||
Recapitalization investment portfolio liability | $ | — | $ | — | $ | 198,524 | $ | 198,524 | |||||||
Total liability | $ | — | $ | — | $ | 198,524 | $ | 198,524 |
Quantitative Information About Level 3 Fair Value Measurements for December 31, 2019 | ||||||||
Description | Fair Value | Valuation Technique | Unobservable Input | Range of Rates | ||||
Fair value option investments | $243,067 | Market evaluation/pricing models | Discount for lack of marketability | 10.0% - 30.0% | ||||
Recent acquisition transactions | Discount for lack of control | 20.0% - 35.0% | ||||||
Quantitative information about Level 3 Fair Value Measurements for December 31, 2018 | ||||||||
Description | Fair Value | Valuation Technique | Unobservable Input | Range of Rates | ||||
Fair value option investments | $253,995 | Market evaluation/pricing models | Discount for lack of marketability | 12.5% - 27.5% | ||||
Recent acquisition transactions | Discount for lack of control | 25.0% - 30.0% |
2019 | 2018 | ||||||
Balance as of January 1, | $ | 256,124 | $ | 272,431 | |||
Reclassifications from cost method to fair value method | — | 3,610 | |||||
Recognized fair value (loss) gain | (11,288 | ) | 9,691 | ||||
Cash distributions received | (452 | ) | (27,778 | ) | |||
Capital contributions paid | 4,069 | 1,546 | |||||
Transfer out to Level 1 | — | (3,376 | ) | ||||
Balance as of December 31, | $ | 248,453 | $ | 256,124 |
2019 | 2018 | ||||||
Balance as of January 1, | $ | 198,524 | $ | 206,507 | |||
Recapitalization investment portfolio consideration change in value | (6,846 | ) | 7,849 | ||||
Cash distributions paid | — | (15,832 | ) | ||||
Balance as of December 31, | $ | 191,678 | $ | 198,524 |
December 31, 2019 | December 31, 2018 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 345,187 | $ | 345,187 | $ | 553,066 | $ | 553,066 | |||||||
Liabilities: | |||||||||||||||
Term Loan | 3,096,429 | 3,111,911 | 3,128,552 | 2,933,299 | |||||||||||
OpCo Notes | 1,125,000 | 1,164,566 | 1,125,000 | 1,077,874 | |||||||||||
Initial HoldCo Notes | 550,000 | 559,873 | 550,000 | 531,878 | |||||||||||
Additional HoldCo Notes | 900,000 | 915,120 | — | — | |||||||||||
Other debt | 5,707 | 5,707 | 8,950 | 8,950 |
Annual | Foreign Currency Translation | Derivative Instruments | Pension Plan | Accumulated Other Comprehensive Loss | |||||||||||
Balance as of December 31, 2016 | $ | (383,257 | ) | $ | (2,289 | ) | $ | (12,131 | ) | $ | (397,677 | ) | |||
OCI before reclassifications | 126,333 | 5,122 | 9,765 | 141,220 | |||||||||||
Amounts reclassified from AOCL | 16,825 | 4,097 | 1,158 | 22,080 | |||||||||||
Net OCI | 143,158 | 9,219 | 10,923 | 163,300 | |||||||||||
Balance as of December 31, 2017 | (240,099 | ) | 6,930 | (1,208 | ) | (234,377 | ) | ||||||||
(OCL) or OCI before reclassifications | (91,177 | ) | 14,498 | 861 | (75,818 | ) | |||||||||
Amounts reclassified from AOCI or AOCL | — | (4,261 | ) | 643 | (3,618 | ) | |||||||||
Other | — | 922 | — | 922 | |||||||||||
Net (OCL) or OCI | (91,177 | ) | 11,159 | 1,504 | (78,514 | ) | |||||||||
Balance as of December 31, 2018 | (331,276 | ) | 18,089 | 296 | (312,891 | ) | |||||||||
OCI or (OCL) before reclassifications | 24,824 | — | (1,803 | ) | 23,021 | ||||||||||
Amounts reclassified from AOCL or AOCI | — | (9,523 | ) | 489 | (9,034 | ) | |||||||||
Net OCI or (OCL) | 24,824 | (9,523 | ) | (1,314 | ) | 13,987 | |||||||||
Balance as of December 31, 2019 | $ | (306,452 | ) | $ | 8,566 | $ | (1,018 | ) | $ | (298,904 | ) |
Years Ended December 31, | ||||||||||||||
Details about AOCI or AOCL Components | 2019 | 2018 | 2017 | Affected line item in statements of operations | ||||||||||
Gains (losses) on derivative instruments: | ||||||||||||||
Foreign currency forward contracts | $ | — | $ | — | $ | 1,887 | Revenue | |||||||
Foreign currency forward contracts | — | — | 3,000 | Direct costs | ||||||||||
Interest rate swaps | 12,327 | 5,618 | (11,914 | ) | Interest expense, net | |||||||||
Total before income tax (expense) benefit | 12,327 | 5,618 | (7,027 | ) | ||||||||||
Income tax (expense) benefit | (2,804 | ) | (1,357 | ) | 2,930 | Provision for (benefit from) income taxes | ||||||||
Total net of income tax | $ | 9,523 | $ | 4,261 | $ | (4,097 | ) | |||||||
Foreign currency translation: | ||||||||||||||
Income tax expense | $ | — | $ | — | $ | (16,825 | ) | Provision for (benefit from) income taxes | ||||||
Defined benefit pension plan: | ||||||||||||||
Amortization of actuarial loss | $ | (605 | ) | $ | (784 | ) | $ | (1,693 | ) | Net periodic pension costs (1) | ||||
Income tax benefit | 116 | 141 | 535 | Provision for (benefit from) income taxes | ||||||||||
Total net of income tax | $ | (489 | ) | $ | (643 | ) | $ | (1,158 | ) |
Years Ended December 31, | |||||||||||
Numerator: | 2019 | 2018 | 2017 | ||||||||
Net income | $ | 52,755 | $ | 106,865 | $ | 300,829 | |||||
Net income attributable to noncontrolling interest | (4,934 | ) | (2,679 | ) | (4,802 | ) | |||||
Net income attributable to PPD, Inc. | 47,821 | 104,186 | 296,027 | ||||||||
Recapitalization investment portfolio consideration | 6,846 | (7,849 | ) | (97,136 | ) | ||||||
Net income attributable to common stockholders of PPD, Inc. | $ | 54,667 | $ | 96,337 | $ | 198,891 | |||||
Denominator: | |||||||||||
Basic weighted-average common shares outstanding | 279,285 | 279,238 | 291,027 | ||||||||
Effect of dilutive stock options and restricted stock | 1,408 | 79 | 2,799 | ||||||||
Diluted weighted-average common shares outstanding | 280,693 | 279,317 | 293,826 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 0.20 | $ | 0.34 | $ | 0.68 | |||||
Diluted | $ | 0.19 | $ | 0.34 | $ | 0.68 |
Years Ended December 31, | ||||||||
2019 | 2018 | 2017 | ||||||
Anti-dilutive stock options and restricted stock | 434 | 106 | 5,333 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Segment revenue: | |||||||||||
Clinical Development Services | $ | 3,354,163 | $ | 3,182,870 | $ | 2,319,103 | |||||
Laboratory Services | 676,854 | 566,101 | 448,373 | ||||||||
Total segment revenue | 4,031,017 | 3,748,971 | 2,767,476 | ||||||||
Segment direct costs: | |||||||||||
Clinical Development Services | 1,162,678 | 1,064,557 | 1,053,557 | ||||||||
Laboratory Services | 307,346 | 258,472 | 235,137 | ||||||||
Total segment direct costs | 1,470,024 | 1,323,029 | 1,288,694 | ||||||||
Segment reimbursed costs: | |||||||||||
Clinical Development Services | 845,580 | 876,617 | — | ||||||||
Laboratory Services | 79,054 | 64,296 | — | ||||||||
Total segment reimbursed costs | 924,634 | 940,913 | — | ||||||||
Segment SG&A expenses: | |||||||||||
Clinical Development Services | 529,425 | 475,242 | 464,794 | ||||||||
Laboratory Services | 81,373 | 68,305 | 60,097 | ||||||||
Total segment SG&A expenses | 610,798 | 543,547 | 524,891 | ||||||||
Segment operating income: | |||||||||||
Clinical Development Services | 816,480 | 766,454 | 800,752 | ||||||||
Laboratory Services | 209,081 | 175,028 | 153,139 | ||||||||
Total segment operating income | $ | 1,025,561 | $ | 941,482 | $ | 953,891 | |||||
Total segment revenue | $ | 4,031,017 | $ | 3,748,971 | $ | 2,767,476 | |||||
Other revenue not allocated to segments (1) | — | — | 233,574 | ||||||||
Total revenue | 4,031,017 | 3,748,971 | 3,001,050 | ||||||||
Total segment direct costs | 1,470,024 | 1,323,029 | 1,288,694 | ||||||||
Total segment reimbursed costs | 924,634 | 940,913 | — | ||||||||
Total segment SG&A expenses | 610,798 | 543,547 | 524,891 | ||||||||
Operating costs and expenses not allocated to segments: | |||||||||||
Direct costs | 14,234 | 10,783 | 14,289 | ||||||||
Reimbursed costs | — | — | 233,574 | ||||||||
SG&A expenses | 328,008 | 269,488 | 284,442 | ||||||||
Recapitalization costs | — | — | 114,766 | ||||||||
Depreciation and amortization | 264,830 | 258,974 | 279,066 | ||||||||
Goodwill and long-lived asset impairments | 1,284 | 29,626 | 43,459 | ||||||||
Total operating costs and expenses | 3,613,812 | 3,376,360 | 2,783,181 | ||||||||
Income from operations | $ | 417,205 | $ | 372,611 | $ | 217,869 |
Years Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Revenue: | |||||||||||
North America(1) | $ | 2,155,609 | $ | 1,981,814 | $ | 1,413,079 | |||||
Latin America | 147,375 | 129,644 | 117,665 | ||||||||
Europe, Middle East and Africa(2) | 1,310,573 | 1,280,861 | 979,921 | ||||||||
Asia-Pacific | 417,460 | 356,652 | 256,811 | ||||||||
Revenue | 4,031,017 | 3,748,971 | 2,767,476 | ||||||||
Reimbursed revenue | — | — | 233,574 | ||||||||
Total revenue | $ | 4,031,017 | $ | 3,748,971 | $ | 3,001,050 |
December 31, | |||||||
2019 | 2018 | ||||||
Property and equipment, net: | |||||||
North America(1) | $ | 372,163 | $ | 328,690 | |||
Latin America | 4,294 | 2,732 | |||||
Europe, Middle East and Africa | 51,780 | 53,434 | |||||
Asia-Pacific | 30,608 | 14,247 | |||||
Total property and equipment, net | $ | 458,845 | $ | 399,103 |
2019 | ||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||
Revenue | $ | 1,046,884 | $ | 1,023,864 | $ | 996,531 | $ | 963,738 | ||||||||
Income from operations | 113,276 | 118,699 | 97,511 | 87,719 | ||||||||||||
Net income attributable to noncontrolling interest | (1,544 | ) | (1,161 | ) | (1,368 | ) | (861 | ) | ||||||||
Recapitalization investment portfolio consideration | (9,984 | ) | 11,231 | (5,029 | ) | 10,628 | ||||||||||
Net income (loss) attributable to common stockholders of PPD, Inc. | $ | 6,766 | $ | 26,652 | $ | 25,716 | $ | (4,467 | ) | |||||||
Basic earnings (loss) per share(1) | $ | 0.02 | $ | 0.10 | $ | 0.09 | $ | (0.02 | ) | |||||||
Diluted earnings (loss) per share(1) | $ | 0.02 | $ | 0.09 | $ | 0.09 | $ | (0.02 | ) | |||||||
2018 | ||||||||||||||||
Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||
Revenue | $ | 978,637 | $ | 907,404 | $ | 910,535 | $ | 952,395 | ||||||||
Income from operations | 101,646 | 77,888 | 99,791 | 93,286 | ||||||||||||
Net (income) loss attributable to noncontrolling interest | (1,366 | ) | (839 | ) | 56 | (530 | ) | |||||||||
Recapitalization investment portfolio consideration | 23,198 | (27,258 | ) | (1,329 | ) | (2,460 | ) | |||||||||
Net income (loss) attributable to common stockholders of PPD, Inc. | $ | 36,591 | $ | 4,100 | $ | 57,699 | $ | (2,053 | ) | |||||||
Basic earnings (loss) per share(1) | $ | 0.13 | $ | 0.01 | $ | 0.21 | $ | (0.01 | ) | |||||||
Diluted earnings (loss) per share(1) | $ | 0.13 | $ | 0.01 | $ | 0.21 | $ | (0.01 | ) |
PPD, Inc. (Parent Company Only) | ||||||||||||
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||||||
(in thousands) | ||||||||||||
For the period from | ||||||||||||
Year Ended | Year Ended | May 11, 2017 to | ||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||
Equity in income of subsidiaries | $ | 53,159 | $ | 105,308 | $ | 244,936 | ||||||
General and administrative expenses | 6,452 | 1,345 | 221 | |||||||||
Income before income tax benefit | 46,707 | 103,963 | 244,715 | |||||||||
Income tax benefit | (1,114 | ) | (223 | ) | (69 | ) | ||||||
Net income | 47,821 | 104,186 | 244,784 | |||||||||
Equity in other comprehensive income (loss) of subsidiaries | 13,777 | (78,994 | ) | 79,300 | ||||||||
Total comprehensive income | $ | 61,598 | $ | 25,192 | $ | 324,084 |
PPD, Inc. (Parent Company Only) | ||||||||
BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
ASSETS | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Cash and cash equivalents | $ | 2,458 | $ | 2,757 | ||||
Deferred costs | 3,699 | — | ||||||
Total assets | $ | 6,157 | $ | 2,757 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Other liabilities | $ | 205,819 | $ | 217,513 | ||||
Recapitalization investment portfolio liability | 191,678 | 198,524 | ||||||
Investments in subsidiaries | 2,306,808 | 1,109,141 | ||||||
Total liabilities | 2,704,305 | 1,525,178 | ||||||
Common stock $0.01 par value, 2,080,000 shares authorized; 280,127 | ||||||||
shares issued and 279,426 shares outstanding as of December 31, 2019 | ||||||||
and 2,080,000 shares authorized; 279,545 shares issued | ||||||||
and 279,030 shares outstanding as of December 31, 2018 | 2,801 | 2,795 | ||||||
Other stockholders' deficit | (2,700,949 | ) | (1,525,216 | ) | ||||
Total stockholders' deficit | (2,698,148 | ) | (1,522,421 | ) | ||||
Total liabilities and stockholders' deficit | $ | 6,157 | $ | 2,757 |
PPD, Inc. (Parent Company Only) | ||||||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||
(in thousands) | ||||||||||||
For the period from | ||||||||||||
Year Ended | Year Ended | May 11, 2017 to | ||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||
Net cash used in operating activities | $ | (15,492 | ) | $ | (2,105 | ) | $ | (94 | ) | |||
Cash flows from investing activities: | ||||||||||||
Return of capital from subsidiaries | 1,260,681 | 123,000 | 539,876 | |||||||||
Net cash provided by investing activities | 1,260,681 | 123,000 | 539,876 | |||||||||
Cash flows from financing activities: | ||||||||||||
Purchase of treasury stock | (4,012 | ) | (8,630 | ) | — | |||||||
Proceeds from exercise of stock options | 4,524 | 923 | — | |||||||||
Proceeds from recapitalization share issuance | — | — | 2,770,001 | |||||||||
Payout for recapitalization share redemptions | — | — | (3,309,876 | ) | ||||||||
Recapitalization tax benefit distribution | — | (99,745 | ) | — | ||||||||
Recapitalization investment portfolio distribution | — | (14,741 | ) | (3,798 | ) | |||||||
Proceeds from employee stock purchases | — | 480 | 7,466 | |||||||||
Return of capital and special dividend to stockholders | (1,246,000 | ) | — | — | ||||||||
Net cash used in financing activities | (1,245,488 | ) | (121,713 | ) | (536,207 | ) | ||||||
Net change in cash and cash equivalents | (299 | ) | (818 | ) | 3,575 | |||||||
Cash and cash equivalents at beginning of period | 2,757 | 3,575 | — | |||||||||
Cash and cash equivalents at end of period | $ | 2,458 | $ | 2,757 | $ | 3,575 |
Dividends Paid | ||||
Paid in May 2019 | $ | 1,086,281 | ||
Paid in November 2019 | 174,400 | |||
Total paid in 2019 | $ | 1,260,681 | ||
Paid in June 2018 | $ | 107,000 | ||
Paid in November 2018 | 16,000 | |||
Total paid in 2018 | $ | 123,000 |
Investments - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 34,028 | $ 8,756 |
Medable, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 15,684 | 8,756 |
Science 37, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 18,344 | $ 0 |
Schedule I - Condensed Financial Information of the Registrant - Balance Sheets - PPD, Inc (Parent Company Only) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
May 10, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | $ 345,187 | $ 553,066 | |||
Total assets | 5,556,246 | 5,489,361 | |||
Recapitalization investment portfolio liability | 191,678 | 198,524 | $ 120,000 | ||
Total liabilities | 8,224,358 | 6,986,890 | |||
Common stock | 2,801 | 2,795 | |||
Total stockholders’ deficit | (2,698,148) | (1,522,421) | $ (1,491,680) | $ (964,241) | |
Total liabilities and stockholders' deficit | 5,556,246 | 5,489,361 | |||
Parent Company | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 2,458 | 2,757 | |||
Deferred costs | 3,699 | 0 | |||
Total assets | 6,157 | 2,757 | |||
Other liabilities | 205,819 | 217,513 | |||
Recapitalization investment portfolio liability | 191,678 | 198,524 | |||
Investments in subsidiaries | 2,306,808 | 1,109,141 | |||
Total liabilities | 2,704,305 | 1,525,178 | |||
Common stock | 2,801 | 2,795 | |||
Other stockholders' deficit | (2,700,949) | (1,525,216) | |||
Total stockholders’ deficit | (2,698,148) | (1,522,421) | |||
Total liabilities and stockholders' deficit | $ 6,157 | $ 2,757 |
Stock-Based Compensation - Restricted Stock Narrative (Details) - Restricted Stock - Eagle I Plan - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 2 years | |
Award vesting percentage | 12.50% | |
Fair value of equity options granted | $ 0.2 | $ 0.2 |
Compensation costs not yet recognized | $ 0.2 | |
Period for compensation costs not yet recognized to be recognized | 1 year 1 month 6 days |
Investments - Summary of Other Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Other investments | $ 1,895 | $ 9,591 |
Total | 250,348 | 265,715 |
Auven Therapeutics Holdings, L.P. | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Investments without readily determinable fair value | 228,959 | 241,305 |
venBio Global Strategic Fund, L.P. | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Investments without readily determinable fair value | 14,108 | 12,690 |
Venture capital funds and investment partnerships | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Investments without readily determinable fair value | $ 5,386 | $ 2,129 |
Schedule I - Condensed Financial Information of the Registrant - Dividends Paid (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||||
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May 31, 2019 |
Nov. 30, 2018 |
Jun. 30, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Parent Company | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Dividends paid | $ 174,400 | $ 1,086,281 | $ 16,000 | $ 107,000 | $ 1,260,681 | $ 123,000 |
Business Combinations |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations The Company accounted for its business combinations below under the acquisition method of accounting and measured at fair value the identifiable assets acquired and liabilities assumed at the date of acquisition. For each business combination, the Company recorded assets and liabilities representing working capital at their historical costs, which approximate fair value given the short-term nature of the assets and liabilities. The methods used to estimate the fair value of definite-lived intangible assets are consistent with those described in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies.” Acquisition of Synarc On September 3, 2019, the Company acquired 100% of the issued and outstanding equity of Synarc, Inc. (“Synarc”), the global site network business of Bioclinica, Inc., expanding its global footprint into China and Latin America and expanding its central nervous system offering in the United States. The preliminary purchase price was $45.2 million, which includes an adjustment to estimated net working capital acquired at the time of acquisition of $5.2 million recorded in the fourth quarter of 2019, and was paid with cash. The purchase price is subject to further post-closing adjustments for cash, debt and net working capital recorded at the time of the acquisition. The initial accounting is not complete and amounts recorded as part of the acquisition are provisional, pending finalization of the valuation of certain assets. The preliminary goodwill recognized of $1.1 million was primarily the result of anticipated growth through the development of new customers, additional services to existing customers and the assembled workforce. The goodwill was assigned to a reporting unit within the Company’s Clinical Development Services segment. The Company is not able to deduct goodwill for U.S. income tax purposes. The Company acquired the following provisional definite-lived intangible assets during 2019 with the acquisition of Synarc:
The following table summarizes the provisional consideration and the fair values of identifiable assets acquired and liabilities assumed at the acquisition date:
Acquisition of Medimix On July 1, 2019, the Company acquired 100% of the issued and outstanding equity of Medimix International (“Medimix”), a global technology company providing real-world evidence insights and information to the pharmaceutical, diagnostic and medical device industries. The acquisition is expected to enhance the Company’s ability to leverage data to provide real-world evidence and insights for customers. The preliminary purchase price was $36.8 million, which consisted of $27.5 million of cash, $5.0 million of common stock of the Company and $4.3 million of estimated contingent consideration. The purchase price is subject to post-closing adjustments for cash, debt and net working capital recorded at the time of the acquisition. There have been no material purchase price adjustments made subsequent to the initial recognition of assets and liabilities acquired. Based on the provisional fair values of identifiable assets acquired and liabilities assumed at the acquisition date, the consideration paid was allocated as follows: (i) $13.5 million to definite-lived intangible assets, (ii) $20.5 million to goodwill and (iii) $2.8 million to other net assets primarily related to net working capital. In connection with the acquisition of Medimix, contingent consideration in the form of a potential earn-out payment of up to $10.8 million is to be paid if Medimix achieves certain performance measures within the specified measurement period. As of December 31, 2019, the Company recorded an estimated earn-out liability of $9.5 million to be paid based on Medimix meeting certain performance targets through 2019. The change in the estimated earn-out liability for contingent consideration was recorded in SG&A expenses on the consolidated statements of operations, and the estimated liability is included in other accrued expenses on the consolidated balance sheets. The initial accounting is not complete and amounts recorded as part of the acquisition are provisional, pending finalization of the valuation of certain assets and liabilities. The goodwill recognized was primarily the result of anticipated growth through the development of new customers, additional services to existing customers and the assembled workforce. The goodwill was assigned to a reporting unit within the Company’s Clinical Development Services segment. The majority of goodwill is tax deductible for U.S. income tax purposes. The Company acquired the following provisional definite-lived intangible assets during 2019 with the acquisition of Medimix:
Acquisition of Optimal Research On September 1, 2017, the Company acquired 100% of the issued and outstanding membership interests of Optimal Research, LLC (“Optimal Research”), a dedicated research site network with enhanced oncology enrollment capabilities. The purchase price was $24.0 million and was funded with cash on hand. Based on the fair values of identifiable assets acquired and liabilities assumed at the acquisition date, the consideration paid of $24.0 million was allocated as follows: (i) $9.8 million to goodwill, (ii) $12.0 million to definite-lived intangible assets and (iii) $2.2 million to other net assets primarily related to net working capital. The goodwill recognized was primarily the result of anticipated growth through the development of new customers, additional services to existing customers, synergies through shared operations and the assembled workforce. The goodwill was assigned to a reporting unit within the Company’s Clinical Development Services segment. The goodwill is tax deductible of U.S. income tax purposes. The Company acquired the following definite-lived intangible assets during 2017 with the acquisition of Optimal Research:
Results from Acquisitions The Company had the following results from its acquisitions for the periods subsequent to closing:
Acquisition Costs Acquisition costs are expensed as incurred and for the years ended December 31, 2019, 2018 and 2017, acquisition costs were $7.9 million, $0.8 million and $8.5 million, respectively, and are included on the consolidated statements of operations as a component of SG&A expenses. |
Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Recapitalization Investment Liability - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2019 |
Dec. 31, 2018 |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 198,524 | $ 206,507 |
Recapitalization investment portfolio consideration change in value | (6,846) | 7,849 |
Cash distributions paid | 0 | (15,832) |
Ending balance | $ 191,678 | $ 198,524 |
Recapitalization Transaction |
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Recapitalization Transaction [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Recapitalization Transaction | Recapitalization Transaction Overview On May 11, 2017, the Majority Sponsors completed the Recapitalization. The Recapitalization was funded through (i) cash equity contributions (and deferred equity contributions) from investment funds affiliated with the Sponsors, (ii) equity contributions of PPD common stock from affiliates of one of the Sponsors and from certain members of management, (iii) the issuance of new long-term debt and (iv) cash on hand from the Company, as well as the assumption of the Company’s existing long-term debt. In summary, the following transactions associated with the Reorganization Merger and Recapitalization Merger were effectuated to complete the Recapitalization: At the effective time of the Reorganization Merger:
Immediately prior to the Recapitalization Merger:
At the effective time of the Recapitalization Merger:
In addition:
PPD Option Consideration and Special Cash Bonuses The Company paid $194.5 million of PPD Option Consideration for the cash settlement of initial PPD Options, all formerly Jaguar I Options. The change in expected vesting resulted in a modification of certain initial PPD Options prior to the cash settlement and therefore resulted in incremental stock-based compensation being incurred. For the year ended December 31, 2017, the Company recognized $52.2 million of stock-based compensation expense for the vesting and cash settlement of initial PPD Options. Stock-based compensation expense recognized for initial PPD Options included $12.5 million for the remaining unrecognized stock-based compensation expense for the vesting of all initial PPD Options that were considered probable of vesting and $39.7 million of incremental stock-based compensation expense for liquidity event-based and certain performance-based initial PPD Options, each of which had its expected vesting changed from improbable to probable. Other previously vested initial PPD Options, comprised of time-based and certain performance-based options, were treated as a cash settlement of initial PPD Options because the PPD Option Consideration paid was equal to the fair value of such options. The cash settlement of initial PPD Options resulted in a $142.3 million direct increase to the Company’s accumulated deficit. The Company also paid $28.1 million for the cash settlement of the Special Cash Bonuses. For the year ended December 31, 2017, the Company recognized $6.7 million of compensation expense for the Special Cash Bonuses. The stock-based compensation expense and Special Cash Bonuses expense were recorded as a component of recapitalization costs on the consolidated statements of operations. Prior to the Recapitalization, the Company recognized $2.1 million and $2.5 million of stock-based compensation expense and compensation expense, respectively, in 2017 for the former Jaguar I Options and the Special Cash Bonuses and had not recognized any compensation expense for liquidity event-based options because a liquidity event, as defined in the Jaguar I Plan, had not occurred. Additionally, the Company recognized $7.1 million of compensation cost for payroll taxes related to the cash and share settlement of all initial PPD Options and the Special Cash Bonuses, which was also included as a component of recapitalization costs on the consolidated statements of operations. There were no stock-based awards granted under the Jaguar I Plan during 2017 and the Jaguar I Plan had 25.0 million stock options outstanding prior to the transactions described above. As a result of the Recapitalization, all outstanding awards were vested and settled (as indicated above) and the Jaguar I Plan was terminated and replaced by the Eagle Holding Company I 2017 Equity Incentive Plan (the “Eagle I Plan”). For additional information on the Eagle I Plan see Note 4, “Stock-based Compensation.” Deferred Recapitalization Payment PPD recognized a $2.0 billion current liability on May 11, 2017, for the Deferred Recapitalization Payment. On the Deferred Payment Date, PPD extinguished the mandatorily redeemable liability with the $2.0 billion cash equity contribution received from affiliates of Carlyle and affiliates of H&F in exchange for the issuance of 132.8 million shares of PPD voting common stock. The Deferred Recapitalization Payment and the cash equity contribution on the Deferred Payment Date were recorded to the Company’s accumulated deficit in accordance with the accounting guidance for recapitalizations. The shares associated with the Deferred Recapitalization Payment were treated as outstanding shares for purposes of determining basic and diluted EPS during 2017. See Note 18, “Earnings Per Share,” for additional information. Recapitalization Tax Benefit Liability Pursuant to the terms and conditions of the Merger Agreement, the Pre-Closing Holders were entitled to receive Additional Recapitalization Consideration to the extent certain tax benefits were deemed realized by PPD by way of a reduction in cash income taxes payable or receipt of a cash tax refund based on certain anticipated tax attributes related to the Recapitalization. These transaction tax benefits represent contractually negotiated consideration as part of the Merger Agreement (the “Recapitalization Tax Benefit Liability”). During the year ended December 31, 2018, in connection with the filing of the Company’s 2017 U.S. Corporate Income Tax Return, the Company finalized the amount of the Recapitalization Tax Benefit Liability and distributed $108.3 million from the Company’s cash and cash equivalents on hand and no liability remained as of December 31, 2018. Recapitalization Investment Portfolio Liability Pursuant to the terms and conditions of the Merger Agreement, the Pre-Closing Holders are also entitled to receive Additional Recapitalization Consideration based on future payments, if any, received by the Company in respect of the Investment Portfolio. The Additional Recapitalization Consideration represents the right to receive future payments from the Company determined by reference to the cash proceeds received by the Company from the Investment Portfolio, net of taxes and other expenses of the Company deemed attributable to the Investment Portfolio and capital contributions made by the Company in respect of the Investment Portfolio after the Recapitalization (the “Recapitalization Investment Portfolio Liability”). The Recapitalization Investment Portfolio Liability represents an obligation that is estimated and probable to become distributable by transferring assets (i.e., cash) to the Pre-Closing Holders. The Company recorded the Recapitalization Investment Portfolio Liability as a long-term liability. If and when the Company is obligated to make a distribution to the Pre-Closing Holders, a portion of the liability will be reclassified to a current liability. Payments in respect of the Recapitalization Investment Portfolio Liability may be deferred if such payments would violate any covenant under the Company’s debt facilities or limit the ability of the Company to pay interest in cash under such debt facilities. As of December 31, 2019 and 2018, PPD had $191.7 million and $198.5 million, respectively, recognized for the Recapitalization Investment Portfolio Liability on the consolidated balance sheets. The initial recognition of the Recapitalization Investment Portfolio Liability of $120.0 million recognized on May 11, 2017, resulted in an increase to the Company’s accumulated deficit in accordance with the accounting guidance for contingent consideration for an equity transaction. Changes in the Recapitalization Investment Portfolio Liability (based on changes in the fair value of the investments underlying the Investment Portfolio, net of taxes and other expenses as required by the Merger Agreement) are recognized as an increase or decrease to the liability with a corresponding increase or decrease in the Company’s accumulated deficit, as well as a deemed dividend on the Company’s statements of operations. During the year ended December 31, 2018 and 2017, the Company paid $16.0 million and $10.5 million, respectively, in distributions related to the Recapitalization Investment Portfolio Liability. No distributions were made in respect of the Recapitalization Investment Portfolio Liability during 2019. Any payments made to the Pre-Closing Holders in respect of the Recapitalization Investment Portfolio Liability reduce such liability. The initial Recapitalization Investment Portfolio Liability and subsequent changes to such liability from changes in the Investment Portfolio were recorded as a non-cash financing activity. See Note 7, “Investments,” for additional information on the Company’s Investment Portfolio. Recapitalization Transaction Costs During the year ended December 31, 2017, the Company recognized $51.2 million of Transaction Costs related to the Recapitalization, consisting primarily of deal-related fees such as advisory and other professional fees incurred by and for the benefit of the Company. These Transaction Costs were recorded as a component of recapitalization costs on the consolidated statements of operations. Additionally, the Company recognized $7.3 million of Transaction Costs, consisting primarily of professional fees, as a direct increase to the Company’s accumulated deficit because the costs were paid by the Company for the benefit of and on behalf of affiliates of the Sponsors. Finally, the Company capitalized $11.9 million of debt issuance costs for the issuance of $550.0 million of new senior notes. See Note 10, “Long-term Debt and Finance Lease Obligations,” for additional information on the debt issuance costs. |
Long-term Debt and Finance Lease Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt and Finance Lease Obligations | Long-term Debt and Finance Lease Obligations Long-term debt and finance lease obligations consisted of the following as set forth on the dates below:
Credit Agreement and Amendments On August 18, 2015, Jaguar II and PPD LLC (the “Borrowers”) entered into a credit agreement (the “Credit Agreement”), as amended, consisting of a $2.575 billion senior secured term loan (the “Term Loan”) issued at 99.5% of face value, or a discount of 0.5%, and a $300.0 million senior secured revolving credit facility (the “Revolving Credit Facility”). The Term Loan matures on August 18, 2022 and the Revolving Credit Facility matures on May 15, 2022. Debt issuance costs of $16.3 million, consisting primarily of arrangement fees and professional fees, were capitalized in connection with the Term Loan. Additionally, deferred debt issuance costs of $2.7 million were capitalized in connection with the Revolving Credit Facility, consisting primarily of arrangement fees and discount. In May and November of 2016, the Company amended its Credit Agreement to borrow an additional $200.0 million issued at 99.0% of face value, or a discount of 1.0% and $460.0 million issued at 99.75% of face value, or a discount of 0.25%, respectively, on the Term Loan. The incremental Term Loan borrowings had the same terms, including in respect of interest rate and maturity with the Company’s existing Term Loan. Additionally, in May of 2017 and March of 2018, the Company amended the Credit Agreement for a reduction of 50 basis points and 25 basis points, respectively, in the margin under the Term Loan. Further, in April 2019, the Company amended to its Credit Agreement to extend the maturity date of the Revolving Credit Facility from August 18, 2020 to May 15, 2022. There were no other significant changes to the terms and conditions of the Credit Agreement, Term Loan or the Revolving Credit Facility as a result of each amendment. Each of the amendments were treated as a modification for accounting purposes. Borrowings under the Term Loan bear interest at a variable rate, at the Company’s option, of either (i) a Eurocurrency rate based on the London Inter-bank Offered Rate (“LIBOR”) for a specific interest period plus an applicable margin, subject to a Eurocurrency rate floor of 1.00%, or (ii) an alternate base rate plus an applicable margin, subject to a base rate floor of 2.00%. The margins for the Term Loan are fixed at 2.50% per annum for Eurocurrency rate loans and 1.50% per annum for base rate loans. As of December 31, 2019, the interest rate on the Term Loan was based on the Eurocurrency loan rate. Additionally, the Term Loan amortizes in equal quarterly installments in an amount equal to 1.0% per annum of the original principal amount thereof, with the balance due at maturity. The Company may voluntarily prepay loans or reduce commitments under the Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty. The Borrowers must prepay the Term Loan with the net cash proceeds of asset sales, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under the Credit Agreement unless specifically incurred to refinance a portion of the credit agreement) and 75% of excess cash flow commencing with the year ended December 31, 2019 (subject to reductions to 50%, 25% or 0%), as defined in the Credit Agreement, and in each case, subject to reinvestment rights and other exceptions. As of December 31, 2019, no prepayment amounts were required under the Credit Agreement. Any repayments for future years are determinable annually only after the fiscal years have concluded. The Borrowers’ obligations under the Credit Agreement are guaranteed by Jaguar I and each of the Company’s current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly-owned subsidiaries and (iv) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including the capital stock of subsidiaries (subject to certain exceptions). As of December 31, 2019, the Company is obligated to pay the following fees under the Revolving Credit Facility: (i) an unused line fee of 0.375% per annum of the unused amount of the Revolving Credit Facility, (ii) a letter of credit participation fee of 3.25% per annum on the aggregate stated maximum amount of each letter of credit available to be drawn, (iii) a fronting fee of 0.125% per annum to the issuing bank on the maximum daily amount of each letter of credit available to be drawn and (iv) other customary fees and expenses of the letter of credit issuers. Borrowings under the Revolving Credit Facility bear interest at a variable rate, at the Company’s option, of either (i) a Eurocurrency rate based on LIBOR for a specific interest period plus an applicable margin, subject to a Eurocurrency rate floor of 1.00%, or (ii) an alternate base rate plus an applicable margin, subject to a base rate floor of 2.00%. The margins for the Revolving Credit Facility are fixed at 3.25% per annum for Eurocurrency rate loans and 2.25% per annum for base rate loans, and each are subject to a further reduction to 3.00% per annum for Eurocurrency rate loans and 2.00% per annum for base rate loans if the Borrower’s first lien net leverage ratio is less than 3.50:1.00. From time to time, the Company is required to have letters of credit issued on its behalf to provide credit support for guarantees, contractual commitments and insurance policies. As of December 31, 2019 and 2018, the Company had letters of credit outstanding with an aggregate value of $1.6 million, which reduced available borrowings under the Revolving Credit Facility by such amount. The Company did not have any borrowings outstanding under the Revolving Credit Facility as of December 31, 2019 and 2018, or at any time during 2019 or 2018. As of December 31, 2019 and 2018, the maturity date, interest rate, committed credit and available credit under the Revolving Credit Facility were as follows:
OpCo Notes On August 18, 2015, Jaguar II and PPD LLC issued in a private placement $1.125 billion of senior unsecured notes at par bearing interest at 6.375% per annum (the “OpCo Notes”). The OpCo Notes mature on August 1, 2023 and interest is payable semi-annually on February 1 and August 1 of each year. The OpCo Notes do not have registration rights. Debt issuance costs of $16.5 million, consisting primarily of underwriters fees and professional fees, were capitalized in connection with the OpCo Notes. Jaguar II and PPD LLC can redeem the OpCo Notes, at their option, in whole at any time or in part from time to time, upon notice, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on August 1 of the years set forth below:
Additionally, upon the occurrence of specific change of control events, Jaguar II and PPD LLC are required to offer to repurchase all of the OpCo Notes then outstanding at 101% of their principal amount, plus accrued and unpaid interest. To date, no OpCo Notes have been redeemed. The OpCo Notes are jointly and severally, irrevocably, fully and unconditionally guaranteed by Wildcat Acquisition Holdings (UK) Limited, Jaguar (Barbados) Finance SRL and each of Jaguar II’s restricted subsidiaries. The OpCo Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the OpCo Notes, and are effectively junior to the borrowings under the Credit Agreement. Initial and Additional HoldCo Notes In connection with the Recapitalization, on May 11, 2017, Eagle II issued in a private placement $550.0 million aggregate principal amount of unsecured 7.625%/8.375% Senior PIK Toggle Notes (the “Initial HoldCo Notes”) at par. The Initial HoldCo Notes were set to mature on May 15, 2022 and interest was payable semi-annually on May 15 and November 15 of each year. Debt issuance costs of $11.9 million, consisting primarily of underwriters’ fees and professional fees, were capitalized in connection with the HoldCo Notes. In May 2019, the Company amended the Initial HoldCo Notes indenture to permit Eagle II to make special dividends and distributions to its stockholders. This transaction was treated as a debt modification for accounting purposes. Debt modification costs of $11.0 million for consent fees were capitalized in connection with this modification. On May 14, 2019, Eagle II issued in a private placement $900.0 million of aggregate principal amount of unsecured 7.75%/8.50% Senior PIK Toggle Notes (the “Additional HoldCo Notes”) at 99% of face value, or a discount of 1.0% (the “Offering”). The Additional HoldCo Notes were set to mature on May 15, 2022 and interest was payable semi-annually on May 15 and November 15 of each year. The Company used the net proceeds from the Offering, together with cash on hand, to pay its stockholders a special cash dividend of $1,086.0 million, as well as pay for fees and expenses associated with the Offering. Debt issuance costs of $18.2 million, consisting primarily of underwriters’ and professional fees, were capitalized in connection with the Offering. On February 18, 2020, the Company redeemed the Initial and Additional HoldCo Notes (collectively, the “HoldCo Notes”) at a redemption price of 101% of the aggregate principal amount with the proceeds received from the Company’s IPO of its common stock. See Note 22, “Subsequent Events,” for additional information. Debt Covenants and Default Provisions The Company’s long-term debt arrangements contain various customary affirmative and negative covenants, including, but not limited to, restrictions on the Company and its restricted subsidiaries’ ability to merge and consolidate with other companies; incur additional or guarantee indebtedness; grant or incur liens or security interests on assets; make acquisitions, loans, advances or investments; pay dividends or make other distributions in respect of, or repurchase or redeem capital stock; prepay, redeem or repurchase certain subordinated debt; consolidated, merge, sell or otherwise transfer all or substantially all assets; enter into certain transactions with affiliates; enter into agreements which would restrict certain subsidiaries’ abilities to pay dividends; and amend organizational documents or change the Company’s line of business or fiscal year. Substantially all of the Company’s net assets are restricted. The Company was in compliance with all covenants for all long-term debt arrangements as of December 31, 2019. In addition, the Credit Agreement subjects the Borrowers to a maximum permitted total net leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA (as defined in the Credit Agreement), where the Borrowers have outstanding letters of credit obligations and loans under the Revolving Credit Facility (excluding $25 million of non-cash collateralized letters of credit) exceeding 30% of the total revolving facility commitments. As of December 31, 2019, the Borrowers were not subject to this total net leverage ratio test. The Credit Agreement provides that upon the occurrence of certain events of default, the Borrowers’ obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, defaults on other material indebtedness, voluntary and involuntary bankruptcy proceedings, material monetary judgments, material ERISA/pension plan events and other customary events of default. Additionally, a change of control (as defined in the Credit Agreement) constitutes an event of default that permits the lenders to accelerate the maturity of borrowings under the Credit Agreement and terminate their commitments to lend. No such events had occurred as of December 31, 2019. The indenture for the OpCo Notes (and previously outstanding HoldCo Notes indenture) also provides that upon the occurrence of certain events of default, the obligations thereunder may be accelerated. Such events of default include payment defaults, covenant defaults, bankruptcy and other customary events of default. Under the indenture governing the OpCo Notes a default in the payment of any other indebtedness exceeding $75.0 million or an acceleration of any such indebtedness constitutes an event of default under the indenture. No such events had occurred as of December 31, 2019. Other Debt The Company has a related party loan denominated in Japanese Yen classified as long-term debt and finance leases on the consolidated balance sheets. The loan matures on April 1, 2025 and interest is payable quarterly at a rate of 1% above the Tokyo Inter-bank Offered Rate. The loan can be prepaid by the Company at any time without penalty. See Note 17, “Related Party Transactions,” for additional information. Scheduled Maturities of Long-term Debt and Finance Lease Obligations As of December 31, 2019, the scheduled maturities of long-term debt and settlement of finance lease obligations for each of the next five years and thereafter were as follows:
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Schedule I - Condensed Financial Information of the Registrant |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule I - Condensed Financial Information of the Registrant | SCHEDULE I Condensed Financial Information of the Registrant
The accompanying notes are an integral part of these condensed financial statements.
The accompanying notes are an integral part of these condensed financial statements.
The accompanying notes are an integral part of these condensed financial statements. Notes to Registrant’s Condensed Financial Statements (Parent Company Only) Basis of Presentation These condensed PPD, Inc. (“PPD” or “Parent Company”) only financial statements have been prepared in accordance with Rule 12-04 of Regulation S-X, as the restricted net assets of the subsidiaries of the Parent Company exceed 25% of the consolidated net assets of the Parent Company as stipulated by Rule 5-04, Section I from Regulation S-X. The ability of the Parent Company’s operating subsidiaries to pay dividends is restricted due to the terms of the subsidiaries’ Credit Agreement and indentures as defined in Note 10, “Long-term Debt and Finance Lease Obligations,” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. PPD became the Parent Company as a result of a Recapitalization in 2017. As a result, these Parent Company only condensed financial statements reflect the periods following this Recapitalization event. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” and Note 2, “Recapitalization Transaction,” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on the Recapitalization. These condensed Parent Company only financial statements have been prepared using the same accounting principles and policies described in the notes to the audited consolidated financial statements, with the only exception being that the Parent Company accounts for investments in its subsidiaries using the equity method. Other liabilities in the condensed balance sheets include related party transactions with subsidiaries. Cash payments made by subsidiaries on behalf of the Parent Company during the year ended December 31, 2019 include $2.6 million in professional fees related to the Parent Company’s initial public offering (“IPO”) and $19.7 million in cash settlements to stockholders related to the stock option modification. Cash payments made by subsidiaries on behalf of the Parent Company during the year ended December 31, 2018 include $1.3 million related to the recapitalization investment portfolio liability and $8.6 million related to the recapitalization tax benefit liability. These condensed financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. Dividends paid The following summarizes the dividends paid to the Parent Company by subsidiaries in 2019 and 2018 (in thousands).
Subsequent Event Initial Public Offering On February 6, 2020, the Parent Company’s common stock began trading on Nasdaq under the symbol “PPD”. On February 10, 2020, the Parent Company completed its IPO of its common stock at a price to the public of $27.00 per share. The Parent Company issued and sold 69.0 million shares of common stock in the IPO, including 9.0 million common shares issued pursuant to the full exercise of the underwriters option to purchase additional shares. The IPO raised proceeds of approximately $1,765.7 million for the Parent Company, after deducting underwriting discounts and commissions and estimated offering expenses. The Parent Company used the proceeds to redeem the previously outstanding HoldCo Notes held by a subsidiary of the Parent Company. See Note 22, “Subsequent Events,” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. |
Leases - Other Leases Information (Details) |
Dec. 31, 2019 |
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Leases [Abstract] | |
Operating leases, weighted average remaining lease term | 6 years 3 months 18 days |
Finance leases, weighted average remaining lease term | 8 years 6 months |
Operating leases, weighted average remaining discount rate | 5.80% |
Finance leases, weighted average remaining discount rate | 7.20% |
Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Assumptions Used in Granted Stock Options Fair Value Estimates | The following table indicates the weighted-average assumptions used in estimating the fair value of stock options granted under the Eagle I Plan as follows:
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Summary of Stock Option and Restricted Stock Activity | A summary of 2019 restricted stock activity under the Eagle I Plan is presented below.
A summary of 2019 stock option activity under the Eagle I Plan is presented below.
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Summarized Information about Outstanding Stock Options | The following table summarizes information about outstanding stock options under the Eagle I Plan as of December 31, 2019:
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Income Taxes - Components of the Provision For (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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U.S. federal income taxes: | |||
Current | $ 32,051 | $ 16,775 | $ 7,252 |
Deferred | (55,206) | (24,426) | (293,164) |
U.S. state income taxes: | |||
Current | 1,614 | 2,843 | 3,406 |
Deferred | (18,658) | (3,038) | (15,074) |
Foreign income taxes: | |||
Current | 44,657 | 49,411 | 25,192 |
Deferred | (1,501) | (1,986) | (11,972) |
Provision for (benefit from) income taxes | $ 2,957 | $ 39,579 | $ (284,360) |
Income Taxes - Summary of the Changes in the Deferred Tax Asset Valuation Allowance (Details) - SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at the beginning of the period | $ (88,980) | $ (78,025) | $ (79,740) |
Additions charged to costs and expenses | (2,463) | (11,527) | (5,375) |
Additions or reductions charged to other accounts | 43,418 | 0 | (197) |
Reductions charged to costs and expenses | 9,847 | 572 | 7,287 |
Balance at end of the period | $ (38,178) | $ (88,980) | $ (78,025) |
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Numerator: | |||||||||||
Net income | $ 52,755 | $ 106,865 | $ 300,829 | ||||||||
Net income attributable to noncontrolling interest | $ 1,544 | $ 1,161 | $ 1,368 | $ 861 | $ 1,366 | $ 839 | $ (56) | $ 530 | (4,934) | (2,679) | (4,802) |
Net income attributable to PPD, Inc. | 47,821 | 104,186 | 296,027 | ||||||||
Recapitalization investment portfolio consideration | (9,984) | 11,231 | (5,029) | 10,628 | 23,198 | (27,258) | (1,329) | (2,460) | 6,846 | (7,849) | (97,136) |
Net income attributable to common stockholders of PPD, Inc. | $ 6,766 | $ 26,652 | $ 25,716 | $ (4,467) | $ 36,591 | $ 4,100 | $ 57,699 | $ (2,053) | $ 54,667 | $ 96,337 | $ 198,891 |
Denominator: | |||||||||||
Basic weighted-average common shares outstanding (in shares) | 279,285 | 279,238 | 291,027 | ||||||||
Effect of dilutive stock options and restricted stock (in shares) | 1,408 | 79 | 2,799 | ||||||||
Diluted weighted-average common shares outstanding (in shares) | 280,693 | 279,317 | 293,826 | ||||||||
Earnings/(loss) per share: | |||||||||||
Basic (in usd per share) | $ 0.02 | $ 0.10 | $ 0.09 | $ (0.02) | $ 0.13 | $ 0.01 | $ 0.21 | $ (0.01) | $ 0.20 | $ 0.34 | $ 0.68 |
Diluted (in usd per share) | $ 0.02 | $ 0.09 | $ 0.09 | $ (0.02) | $ 0.13 | $ 0.01 | $ 0.21 | $ (0.01) | $ 0.19 | $ 0.34 | $ 0.68 |
Entity-wide Information by Geographic Location - Summary of Revenue and Property and Equipment, Net by Geographical Location (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Revenue: | |||||||||||
Revenue | $ 1,046,884 | $ 1,023,864 | $ 996,531 | $ 963,738 | $ 978,637 | $ 907,404 | $ 910,535 | $ 952,395 | $ 4,031,017 | $ 3,748,971 | |
Revenue | $ 2,767,476 | ||||||||||
Reimbursed revenue | 233,574 | ||||||||||
Total revenue | 3,001,050 | ||||||||||
Property and equipment, net | 458,845 | 399,103 | 458,845 | 399,103 | |||||||
North America | |||||||||||
Revenue: | |||||||||||
Revenue | 2,155,609 | 1,981,814 | 1,413,079 | ||||||||
Property and equipment, net | 372,163 | 328,690 | 372,163 | 328,690 | |||||||
United States | |||||||||||
Revenue: | |||||||||||
Revenue | 2,132,275 | 1,960,637 | 1,392,873 | ||||||||
Property and equipment, net | 372,033 | 328,664 | 372,033 | 328,664 | |||||||
Latin America | |||||||||||
Revenue: | |||||||||||
Revenue | 147,375 | 129,644 | 117,665 | ||||||||
Property and equipment, net | 4,294 | 2,732 | 4,294 | 2,732 | |||||||
Europe, Middle East and Africa | |||||||||||
Revenue: | |||||||||||
Revenue | 1,310,573 | 1,280,861 | 979,921 | ||||||||
Property and equipment, net | 51,780 | 53,434 | 51,780 | 53,434 | |||||||
United Kingdom | |||||||||||
Revenue: | |||||||||||
Revenue | 659,350 | 655,314 | 518,174 | ||||||||
Asia-Pacific | |||||||||||
Revenue: | |||||||||||
Revenue | 417,460 | 356,652 | $ 256,811 | ||||||||
Property and equipment, net | $ 30,608 | $ 14,247 | $ 30,608 | $ 14,247 |
Employee Savings and Pension Plan - Summary of Weighted-Average Assumptions Used to Determine Benefit Obligations (Details) |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Retirement Benefits [Abstract] | ||
Discount rate | 2.10% | 3.00% |
Rate of compensation increase | 3.60% | 3.70% |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, income tax expense | $ 0 | $ 0 | $ 16,825 |
Defined benefit plan adjustments, income tax benefit (expense) | (259) | 339 | 1,382 |
Derivative instruments adjustments, income tax expense (benefit) | $ (2,804) | $ 2,183 | $ 4,785 |
Employee Savings and Pension Plan - Weighted Average Assumptions to Determine Net Periodic Pension Cost (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Retirement Benefits [Abstract] | |||
Discount rate | 3.00% | 2.60% | 2.70% |
Rate of compensation increase | 3.70% | 3.70% | 3.70% |
Long-term rate of return on plan assets | 2.50% | 3.70% | 5.60% |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table provides a reconciliation of the numerator and denominator of the basic and diluted EPS computations for the periods set forth below:
See Note 2, “Recapitalization Transaction,” for additional information related to the Recapitalization and Note 5, “Stockholders’ Deficit and Redeemable Noncontrolling Interest,” for additional information related to shares. Potential common shares outstanding that are considered anti-dilutive are excluded from the computation of diluted EPS. Potential common shares related to stock options and other awards under share-based compensation programs may be determined to be anti-dilutive based on the application of the treasury stock method and are also anti-dilutive in periods when the Company incurs a net loss. The number of potential common shares outstanding that were considered anti-dilutive using the treasury stock method and therefore excluded from the computation of diluted EPS, weighted for the portion of the period they were outstanding, are as follows:
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Derivative Instruments and Hedging Activities - Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Foreign currency forward contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Pre-Tax Gain Recognized in OCI or OCL | $ 0 | $ 0 | $ 4,708 |
Interest rate swaps | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Pre-Tax Gain Recognized in OCI or OCL | $ 0 | $ 18,960 | $ 2,269 |
Employee Savings and Pension Plan |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Savings and Pension Plan | Employee Savings and Pension Plan Savings Plans The Company provides 401(k) retirement savings plans or other defined contribution savings plans (“Savings Plans”) to its qualified U.S. and non-U.S. employees. Under the Company’s primary U.S. savings plan, the Company matches 50% of the employee’s pre-tax retirement savings contribution up to a maximum of 3% of eligible earnings. Vesting in the Company match is 25% per vesting year of service in the plan, subject to a minimum number of hours worked threshold and other events which may trigger immediate vesting of the Company match. Under the Company’s primary non-U.S. savings plan in the United Kingdom, employees can contribute a maximum of their annual compensation and the Company matches those contributions with 5% to 8% of the employee’s annual compensation. Company matching contributions, net of forfeitures, for the Savings Plans for the years ended December 31, 2019, 2018 and 2017 were $27.6 million, $25.5 million and $22.0 million, respectively. Pension Plan The Pension Plan was closed to new participants as of December 31, 2002. In December 2009, the Company closed the Pension Plan to additional contributions effective January 1, 2010. As amended, participants are entitled to receive benefits previously accrued, which are based on the expected amount of compensation at retirement and the number of years of service through January 1, 2010, but participants will receive no additional credit for future years of service. The Company will, however, continue to make contributions in respect of the funding plan. The expected funding contributions to the Pension Plan are discretionary and can change at any time based on updated statutory funding position calculations, resulting changes to the funding recovery plan and other factors determined by the Company. Pre-tax pension costs and other amounts recognized in net income and OCL or (OCI) for the Pension Plan included the following components:
The weighted-average assumptions used to determine net periodic pension cost for periods below were as follows:
The change in benefit obligation, change in plan assets, funded status and amounts recognized for the Pension Plan were as follows:
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets were as follows:
As of December 31, 2019, expected funding contributions to the Pension Plan were as follows:
The weighted-average assumptions used to determine benefit obligations at the end of the plan year were as follows:
The Pension Plan’s target allocations and weighted-average asset allocations by asset category were as follows:
The trustees’ investment objectives for the Pension Plan is to provide for growth of capital with a moderate level of volatility by investing in accordance with the target asset allocations above to meet the benefit obligations of the Pension Plan. The Pension Plan’s long-term strategy is to align the investment approach with the pension obligation as the value of the investments increases, with an objective of being fully funded, while managing the risk of the investment portfolio. The target allocations above were selected by the trustees with the advice of an independent third-party investment manager. The independent third-party investment manager manages the assets and tracks the return on a benchmark portfolio, matching the above strategic asset allocation. The trustees review the performance of the investment manager and Pension Plan assets on a continuous basis to ensure the trustees’ investment strategy is meeting the trustees’ investment objectives. The Pension Plan assets are valued using the net asset value that is reported by the investment manager. During 2018, the target allocations for investments changed from 70% to 40% for equity securities and from 30% to 60% for debt securities, to better align with the future expected liabilities of the Pension Plan. In 2019, the target allocation was further revised in line with this strategy to 38.5% equity securities and 61.5% debt securities. The Company considers the Pension Plan assets to be a Level 2 classification within the fair value hierarchy. The allocation of Pension Plan assets is as follows on the dates set forth below:
As of December 31, 2019, expected benefit payments from the Pension Plan for each of the next five years, and the next five years in the aggregate, were as follows:
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Document and Entity Information Document |
12 Months Ended |
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Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | PPD, Inc. |
Entity Central Index Key | 0001793294 |
Document Type | 8-K |
Document Period End Date | May 21, 2020 |
Amendment Flag | false |
Entity Emerging Growth Company | false |
Long-term Debt and Finance Lease Obligations (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt and Finance Lease Obligations | Long-term debt and finance lease obligations consisted of the following as set forth on the dates below:
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Schedule of Redemption Prices | Jaguar II and PPD LLC can redeem the OpCo Notes, at their option, in whole at any time or in part from time to time, upon notice, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest and additional interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on August 1 of the years set forth below:
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Scheduled Maturities of Long-term Debt and Finance Lease Obligations | As of December 31, 2019, the scheduled maturities of long-term debt and settlement of finance lease obligations for each of the next five years and thereafter were as follows:
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Employee Savings and Pension Plan (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Pre-Tax Pension Costs and Other Amounts Recognized in Net Income | Pre-tax pension costs and other amounts recognized in net income and OCL or (OCI) for the Pension Plan included the following components:
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Summary of Pre-Tax Pension Costs and Other Amounts Recognized in OCL or (OCI) | Pre-tax pension costs and other amounts recognized in net income and OCL or (OCI) for the Pension Plan included the following components:
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Summary of Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost and Benefit Obligations | The weighted-average assumptions used to determine net periodic pension cost for periods below were as follows:
The weighted-average assumptions used to determine benefit obligations at the end of the plan year were as follows:
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Summary of the Changes in Benefit Obligation, Plan Assets, and Funded Status | The change in benefit obligation, change in plan assets, funded status and amounts recognized for the Pension Plan were as follows:
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Summary of the Projected Benefit Obligation, Accumulated Benefit Obligation, and Fair Value of Plan Assets | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets were as follows:
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Summary of Expected Funding Contributions to the Pension Plan | As of December 31, 2019, expected funding contributions to the Pension Plan were as follows:
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Summary of the Pension Plan's Target Allocations, Weighted-Average Asset Allocations, and Actual Allocation | The allocation of Pension Plan assets is as follows on the dates set forth below:
The Pension Plan’s target allocations and weighted-average asset allocations by asset category were as follows:
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Summary of Expected Benefit Payments | As of December 31, 2019, expected benefit payments from the Pension Plan for each of the next five years, and the next five years in the aggregate, were as follows:
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Long-term Debt and Finance Lease Obligations - Scheduled Maturities of Long-term Debt and Finance Lease Obligations (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2020 | $ 35,794 |
2021 | 36,014 |
2022 | 4,485,451 |
2023 | 1,128,587 |
2024 | 3,477 |
Thereafter | 16,539 |
Total | $ 5,705,862 |
Long-term Debt and Finance Lease Obligations - OpCo Notes (Details) - Senior Notes - OpCo Notes - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Aug. 18, 2015 |
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Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 1,125,000,000.000 | |
Stated rate | 6.38% | 6.375% |
Debt issuance costs | $ 16,500,000 | |
Debt Instrument, Redemption, Period Four [Member] | ||
Debt Instrument [Line Items] | ||
Redemption Price | 101.00% |
Revenue - Schedule of Accounts Receivable and Unbilled Services (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Revenue from Contract with Customer [Abstract] | ||||
Accounts receivable | $ 726,111 | $ 700,280 | ||
Unbilled services | 609,674 | 565,473 | ||
Total accounts receivable and unbilled services | 1,335,785 | 1,265,753 | ||
Allowance for doubtful accounts | (9,171) | (5,029) | $ (4,904) | $ (3,105) |
Total accounts receivable and unbilled services, net | $ 1,326,614 | $ 1,260,724 |
Leases - Supplemental Cash Flow Information (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 52,502 |
Operating cash flows for finance leases | 1,968 |
Financing cash flows for finance leases | 1,948 |
ROU assets obtained in exchange for operating lease obligation | 42,520 |
ROU assets obtained in exchange for finance lease obligation | $ 3,736 |
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2019
$ / shares
shares
| |
Restricted Stock | |
Beginning unvested balance (in shares) | shares | 11 |
Granted (in shares) | shares | 12 |
Vested (in shares) | shares | (14) |
Ending unvested balance (in shares) | shares | 9 |
Weighted-Average Grant Date Fair Value | |
Beginning unvested balance (in usd per share) | $ / shares | $ 15.39 |
Granted (in usd per share) | $ / shares | 18.66 |
Vested (in usd per share) | $ / shares | 16.48 |
Ending unvested balance (in usd per share) | $ / shares | $ 18.05 |
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Earnings Per Share [Abstract] | |||
Anti-dilutive stock options and restricted stock (in shares) | 434 | 106 | 5,333 |
Quarterly Results of Operations (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 1,046,884 | $ 1,023,864 | $ 996,531 | $ 963,738 | $ 978,637 | $ 907,404 | $ 910,535 | $ 952,395 | $ 4,031,017 | $ 3,748,971 | |
Income from operations | 113,276 | 118,699 | 97,511 | 87,719 | 101,646 | 77,888 | 99,791 | 93,286 | 417,205 | 372,611 | $ 217,869 |
Net income attributable to noncontrolling interest | 1,544 | 1,161 | 1,368 | 861 | 1,366 | 839 | (56) | 530 | (4,934) | (2,679) | (4,802) |
Recapitalization investment portfolio consideration | (9,984) | 11,231 | (5,029) | 10,628 | 23,198 | (27,258) | (1,329) | (2,460) | 6,846 | (7,849) | (97,136) |
Net income (loss) attributable to common stockholders of PPD, Inc. | $ 6,766 | $ 26,652 | $ 25,716 | $ (4,467) | $ 36,591 | $ 4,100 | $ 57,699 | $ (2,053) | $ 54,667 | $ 96,337 | $ 198,891 |
Basic earnings (loss) per share (in usd per share) | $ 0.02 | $ 0.10 | $ 0.09 | $ (0.02) | $ 0.13 | $ 0.01 | $ 0.21 | $ (0.01) | $ 0.20 | $ 0.34 | $ 0.68 |
Diluted earnings (loss) per share (in usd per share) | $ 0.02 | $ 0.09 | $ 0.09 | $ (0.02) | $ 0.13 | $ 0.01 | $ 0.21 | $ (0.01) | $ 0.19 | $ 0.34 | $ 0.68 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 52,755 | $ 106,865 | $ 300,829 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments, net of income taxes | 24,824 | (91,177) | 143,158 |
Defined benefit pension plan adjustments, net of income taxes | (1,314) | 1,504 | 10,923 |
Derivative instruments adjustments, net of income taxes | (9,523) | 11,159 | 9,219 |
Other comprehensive income (loss) | 13,987 | (78,514) | 163,300 |
Comprehensive income | 66,742 | 28,351 | 464,129 |
Comprehensive income attributable to noncontrolling interest | (5,144) | (3,159) | (5,315) |
Comprehensive income attributable to PPD, Inc. | 61,598 | 25,192 | 458,814 |
Recapitalization investment portfolio consideration | 6,846 | (7,849) | (97,136) |
Comprehensive income attributable to common stockholders of PPD, Inc. | $ 68,444 | $ 17,343 | $ 361,678 |
Employee Savings and Pension Plan - Amounts Recorded in Net Income and OCL or (OCI) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Net periodic pension cost (credit): | |||
Interest cost | $ 2,397 | $ 2,370 | $ 2,596 |
Expected return on plan assets | (2,106) | (3,195) | (4,125) |
Amortization of actuarial loss | 605 | 784 | 1,693 |
Net periodic pension cost (credit) | 896 | (41) | 164 |
Other changes in plan assets and benefit obligations recognized in OCL or (OCI): | |||
Net actuarial loss (gain) arising during period | 2,180 | (1,169) | (11,881) |
Amortization of actuarial loss | (605) | (784) | (1,693) |
Foreign currency translation adjustment | 0 | 110 | 1,269 |
Total OCL or (OCI) | 1,575 | (1,843) | (12,305) |
Total recognized in net periodic pension cost (credit) and OCL or (OCI) | $ 2,471 | $ (1,884) | $ (12,141) |
Related Party Transactions |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Majority Sponsor Transactions The Company entered into a consulting agreement with affiliates of the Majority Sponsors under which the Company pays the Majority Sponsors a fee for consulting services provided to the Company as well as reimbursements for out-of-pocket expenses incurred in conjunction with such services. The Company incurred consulting and out-of-pocket expenses for services rendered under the consulting agreement of $3.8 million, $3.6 million and $3.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. These expenses are recorded as a component of SG&A expenses on the consolidated statements of operations. The consulting services agreements terminated pursuant to their terms upon completion of the Company’s IPO on February 10, 2020. See Note 22, “Subsequent Events,” for additional information. Affiliates of one of the Majority Sponsors had investments in the Term Loan totaling $78.0 million and $80.5 million, respectively, as of December 31, 2019 and 2018. The Company paid $3.9 million and $3.7 million of interest, respectively, and $0.8 million of principal to the relevant affiliates for the Term Loan for the years ended December 31, 2019 and 2018. During the year ended December 31, 2017, the Company paid Transaction Costs, consisting mainly of professional fees, for the benefit of and on behalf of affiliates of the Sponsors, of $7.3 million to effect the Recapitalization. See Note 2, “Recapitalization Transaction,” for additional information. SNBL Transactions Both the Company and SNBL have service agreements to provide administrative and support services to PPD-SNBL, both of which will remain in effect as long as the PPD-SNBL shareholders agreement remains in effect. The Company and SNBL also have a collaboration agreement under which the parties may collaborate on various drug development services. This collaboration agreement will remain in effect as long as SNBL owns at least 20% of PPD-SNBL. For the years ended December 31, 2019, 2018 and 2017, the Company incurred expenses for services rendered under the services agreement of $1.5 million, $1.3 million and $2.5 million, respectively. The expenses are recorded as a component of SG&A expenses on the consolidated statements of operations. As of December 31, 2019 and 2018, the Company owed SNBL $0.3 million for services rendered under the services agreement. Additionally, as of December 31, 2019 and 2018, PPD-SNBL owed SNBL $5.7 million and $9.0 million, respectively, related to a working capital loan. During the year ended December 31, 2019, the Company repaid $3.4 million of principal on this working capital loan. This loan is classified as long-term debt on the consolidated balance sheets and is included in Note 10, “Long-term Debt and Finance Lease Obligations,” as “other debt.” |
Derivative Instruments and Hedging Activities - Additional Information (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
|
Feb. 29, 2020
instrument
|
Dec. 31, 2019
USD ($)
|
|
Derivative [Line Items] | |||
Unrealized gains to be reclassified within the next 12 months | $ 8.6 | ||
Interest rate swaps | |||
Derivative [Line Items] | |||
Cash received on hedge | $ 29.6 | ||
Designated as Hedging Instrument | Subsequent Event | Interest rate swaps | |||
Derivative [Line Items] | |||
Number of instruments | instrument | 3 |
Derivative Instruments and Hedging Activities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Interest Rate Hedging The Company has variable rate borrowings under its Term Loan, and as a result, is exposed to interest rate fluctuations on these borrowings. From time to time, the Company enters into interest rate swaps to mitigate the risk in fluctuations in interest rates. The interest rate swaps effectively convert variable rate borrowings under the Term Loan to fixed rate borrowings based on the fixed interest rate for the interest rate swaps plus the applicable margin on the Term Loan. The terms of these interest rate swaps are substantially the same as those of the Term Loan, including interest settlements. The Company accounts for these interest rate swaps as cash flow hedges because their purpose is to hedge the Company’s exposure to increases in interest rates on its variable rate borrowings. The Company recognizes in accumulated other comprehensive loss (“AOCL”) or accumulated other comprehensive income (“AOCI”), each net of tax, any changes in the fair value, representing unrealized gains or losses, of the effective portion of its interest rate swaps. In 2018, the Company terminated all of its outstanding interest rate swaps, resulting in cash proceeds of $29.6 million. These interest rate swaps were set to mature in November 2020. Unrealized gains previously recorded in AOCI through the date of termination will be reclassified into interest expense, net, through the original maturity date of the interest rate swaps. The Company expects to reclassify current unrealized gains of $8.6 million, net of tax, within the next 12 months from AOCI to interest expense, net, on the statements of operations as interest payments are made on the Term Loan. In February 2020, the Company entered into three new interest rate swaps. See Note 22, “Subsequent Events,” for additional information related to the new interest rate swaps. Foreign Currency Hedging The Company has significant international revenues and expenses denominated in currencies other than its reporting currency. As a result, the Company’s operating results can be affected by changes in foreign currency exchange rates. In an effort to mitigate this risk, from time to time, the Company purchases foreign currency forward contracts as hedges against anticipated and recorded transactions denominated in foreign currencies. The Company’s foreign currency forward contracts expired in 2017, and the Company had no foreign currency forward contracts outstanding as of or during the years ended December 31, 2019 and 2018. The Company does not use derivative financial instruments for speculative or trading purposes and does not offset the fair value amounts of its derivatives. The Company recognized the following amounts of pre-tax gain as a component of OCI or OCL during the years ended December 31, 2019, 2018 and 2017:
The following table provides the location of the effective portion of the pre-tax gain (loss) reclassified from AOCL or AOCI into revenue, direct costs and interest expense, net, respectively, on the consolidated statements of operations during the years ended December 31, 2019, 2018 and 2017:
|
Employee Savings and Pension Plan - Expected Funding Contributions (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
2021 | $ 3,639 |
2022 | 3,769 |
Total | $ 7,408 |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (55,467,000) |
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | (1,547,147,000) |
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests | us-gaap_TemporaryEquityCarryingAmountIncludingPortionAttributableToNoncontrollingInterests | 21,733,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (55,467,000) |
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | (1,337,582,000) |
Treasury Stock [Member] | ||
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | $ 0 |
Shares, Outstanding | us-gaap_SharesOutstanding | 0 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | $ 22,018,000 |
Common Stock [Member] | ||
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | $ 2,794,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 279,443,000 |
AOCI Attributable to Parent [Member] | ||
Stockholders' Equity Attributable to Parent, Adjusted Balance | ppdi_StockholdersEquityAttributabletoParentAdjustedBalance | $ (234,377,000) |
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | The amount of finance lease ROU assets and liabilities and the associated financial statement line item they are included within on the consolidated balance sheets are as follows:
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Lease Expense and Other Leases Information | Other information on operating and finance leases were as follows:
The components of total lease expense were as follows:
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Supplemental Cash Flow Information | Supplemental cash flow information related to operating and finance leases were as follows:
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Future Lease Payments for Operating Lease Liabilities | As of December 31, 2019, the undiscounted lease payments for operating and finance lease liabilities were as follows:
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Future Lease Payments for Finance Lease Liabilities | As of December 31, 2019, the undiscounted lease payments for operating and finance lease liabilities were as follows:
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Future Minimum Payments for Operating Leases under ASC 840 | The future minimum payments for operating leases and capital leases as of December 31, 2018 on an ASC 840 basis were as follows:
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Future Minimum Payments for Capital Leases under ASC 840 | The future minimum payments for operating leases and capital leases as of December 31, 2018 on an ASC 840 basis were as follows:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liability Measured at Fair Value | The following table presents information about the Company’s assets and liability measured at fair value on a recurring basis:
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Fair Value Measurement Inputs and Valuation Techniques | The following table summarizes the Company’s quantitative information about the fair value measurements of Auven and venBio at the dates indicated:
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Fair Value Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in fair value of the Company’s investments measured on a recurring basis using significant unobservable inputs (Level 3) were as follows:
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Fair Value Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in fair value of the Recapitalization Investment Portfolio Liability measured on a recurring basis using significant unobservable inputs (Level 3) were as follows:
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Fair Value by Balance Sheet Grouping | The following table presents information about the carrying value and estimated fair value of the Company’s financial instruments on the dates set forth below:
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Leases - Components of Lease Expense (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Amortization of ROU assets | $ 2,497 |
Interest on lease liabilities | 1,968 |
Operating lease expense | 54,179 |
Short-term lease expense | 1,301 |
Variable lease expense | 15,804 |
Total lease expense | $ 75,749 |
Revenue - Capitalized Contract Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue from Contract with Customer [Abstract] | |||
Capitalized costs to obtain a contract, net | $ 25,766 | $ 23,062 | |
Amortization of costs to obtain a contract | $ 11,432 | $ 8,693 | $ 0 |
Long-term Debt and Finance Lease Obligations - Debt Covenants and Default Provisions (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019
USD ($)
|
Aug. 18, 2015
USD ($)
|
|
Senior Notes | OpCo Notes | ||
Debt Instrument [Line Items] | ||
Threshold for default | $ 75.0 | |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Non-cash collateralized letters of credit | $ 25.0 | |
Percentage of outstanding borrowings, excluding letters of credits | 0.30 | |
Tokyo Inter-bank Offered Rate | Other debt | ||
Debt Instrument [Line Items] | ||
Variable rate | 1.00% |
Long-term Debt and Finance Lease Obligations - Schedule of Line of Credit Facilities (Details) - Line of Credit - Revolving Credit Facility - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 18, 2015 |
|
Line of Credit Facility [Line Items] | |||
Long-term line of credit | $ 300,000,000 | $ 300,000,000.0 | |
Available credit | $ 298,370,000 | $ 298,370,000 | |
LIBOR | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 3.25% |
Revenue - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 |
Dec. 31, 2019 |
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, expected timing of satisfaction, period | 12 months |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, percentage | 35.00% |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, percentage | 41.00% |
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 4 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 18 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 1 year |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Quarterly Results of Operations (unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unaudited Quarterly Results of Operations | The following table summarizes the Company’s unaudited quarterly results of operations:
(1) The sum of the quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted-average shares outstanding and the effects of rounding for each period. |
Schedule I - Condensed Financial Information of the Registrant - Balance Sheets - Additional Information - PPD, Inc (Parent Company Only) (Details) - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Common stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,080,000,000 | 2,080,000,000 |
Common stock, shares, issued (in shares) | 280,127,000 | 279,545,000 |
Common stock, shares, outstanding (in shares) | 279,426,000 | 279,030,000 |
Parent Company | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Common stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,080,000 | 2,080,000 |
Common stock, shares, issued (in shares) | 280,127 | 279,545 |
Common stock, shares, outstanding (in shares) | 279,426 | 279,030 |
Investments - Summary of Financial Information (Details) - Auven and venBio - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Net investment (loss) income (for the years ended December 31) | $ (280,962) | $ (140,943) | $ 598,285 |
Total assets (as of December 31) | 1,396,040 | 1,645,063 | 2,005,154 |
Total liabilities (as of December 31) | $ 30,812 | $ 2,105 | $ 126,407 |
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