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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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PPD
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The NASDAQ Stock Market LLC
(Nasdaq Global Select Market)
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Item
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Page
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PART I
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1.
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Business
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1A.
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Risk Factors
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1B.
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Unresolved Staff Comments
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2.
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Properties
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3.
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Legal Proceedings
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4.
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Mine Safety Disclosures
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PART II
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5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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6.
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Selected Financial Data
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7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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7A.
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Quantitative and Qualitative Disclosures About Market Risk
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8.
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Financial Statements and Supplementary Data
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9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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9A.
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Controls and Procedures
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9B.
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Other Information
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PART III
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10.
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Directors and Executive Officers of the Registrant and Corporate Governance
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11.
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Executive Compensation
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12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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13.
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Certain Relationships and Related Transactions, and Director Independence
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14.
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Principal Accountant Fees and Services
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PART IV
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15.
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Exhibits and Financial Statement Schedules
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Exhibit Index
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16.
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Form 10-K Summary
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Signatures
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Innovative site and patient access. We have developed differentiated capabilities that meaningfully address two of the biggest challenges that our customers face: patient enrollment and site performance. Through our Accelerated Enrollment Solutions (“AES”) delivery model, we focus on meeting the unique feasibility, site start-up and patient recruitment needs of each study. We address these complex needs by leveraging (i) large data sets, including identified and consented personal data on 100 million U.S. households and health information on approximately 20 million previously screened study candidates and (ii) our global site network of over 180 research sites across five continents and 17 countries.
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Purpose-built PPD Biotech. Over the past five years, we pioneered the development, implementation and scaling of a purpose-built, customer-facing delivery model to address the specific needs of the increasingly relevant biotechnology sector. Our model is founded on (i) dedicating commercial, medical, operational and functional leaders to our biotechnology customers and (ii) allocating the right mix of experienced resources to drive their drug development programs.
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Advanced laboratory services. Over the last five years, in response to strong customer demand for our services (over $1 billion of laboratory services in our backlog as of December 31, 2019), we have invested over $200 million to significantly increase the size and operating capacity of our laboratory facilities, acquire innovative laboratory equipment, expand our test menus and build out differentiated IT systems and laboratory automation.
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Innovative peri-and post-approval studies. Our customers increasingly require evidence-based solutions to help them demonstrate the real-world effectiveness, safety and value of newly approved therapies, which are essential to optimize the commercial potential of their products. We have significantly expanded our capabilities in this growing area, providing our customers with service offerings in areas such as (i) market access, (ii) health economics modeling and (iii) patient-centered research.
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Targeted geographic expansion. We maintain a strong presence of experienced professionals in all key regions and countries necessary to support our customers’ global drug development programs. In response to the growing importance of conducting global studies that include cohorts in Japan and China and the opportunity to serve local customers in those geographies with their global drug development needs, we have significantly increased the size and scale of our operations in those countries while maintaining the quality and operating standards demanded by our customers and regulatory authorities alike.
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Phase I trials involve testing the drug candidate on a limited number of healthy individuals, typically 20 to 80 people, to determine the drug candidate’s basic safety data, including tolerance, absorption, metabolism and excretion. This phase lasts an average of six months to one year. In some therapeutic areas such as oncology, where cytotoxic compounds are being investigated, it is sometimes necessary to run Phase I trials in diagnosed patients instead of healthy individuals.
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Phase II trials involve testing a small number of volunteer participants, typically 100 to 200 people, who suffer from the targeted disease or condition, to assess the drug candidate’s effectiveness and how different doses work. This phase lasts an average of one to two years.
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Phase III trials involve testing large numbers of participants, typically several hundred to several thousand people, to evaluate efficacy on a large scale, as well as long-term safety. These trials involve numerous sites and generally last two to three years, but can be shorter or longer.
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Phase IV or post-approval clinical trials involve monitoring or verifying the risks and benefits of a drug product.
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Real-world data and evidence studies, meaning data and evidence gathered outside of the context of clinical trials, are often used to assess usage, potential benefits or risks, safety, effectiveness and health economics to achieve successful market access and product uptake.
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Growth in R&D spending. Biopharmaceutical companies must continually invest in drug development in order to create innovative new therapies or use existing drugs to treat new indications, to address unmet medical needs and to replace lost revenues when their currently marketed drugs lose patent protection. From 2008 to 2018, R&D spending increased approximately 3.3% annually, driven by long-term secular fundamentals including a 30% increase in active INDs and an approximately 80% increase in average annual FDA approvals from 2008 to 2018.
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Increased levels of outsourcing by biopharmaceutical companies. As biopharmaceutical companies continue to seek ways to reduce clinical development costs and focus resources on core competencies, we believe they will continue to increase the amount of clinical development work they outsource to CROs. Outsourcing penetration as a percentage of total development spending by biopharmaceutical companies increased from approximately 36% in 2007 to approximately 49% in 2018. Drivers of increased outsourcing include:
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biopharmaceutical companies’ desire for flexible cost structures and focus on core competencies;
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experience, expertise, capability and value provided by CROs;
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difficulty conducting large, global and complex clinical trials required by the current regulatory environment;
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ability to generate real-world data and evidence; and
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desire to address declining R&D productivity by utilizing more efficient means of conducting clinical trials.
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Increased complexity in clinical development. Clinical trials continue to increase in complexity due to a confluence of factors including, but not limited to, (i) new therapeutic modalities, (ii) the collection of more clinical trial endpoints, (iii) more specific patient inclusion/exclusion criteria, (iv) ever-changing regulatory requirements and (v) an expansion of evidence generation methods, such as electronic patient-reported outcomes and virtual clinical trials. All of these factors result in more complex trial design, challenges in enrolling protocol-eligible patients, longer duration of clinical trials and greater overall clinical trial cost. As a result, we expect biopharmaceutical companies to increasingly seek partners that have the experience and expertise to conduct cost-effective clinical studies. In particular, we believe large CROs who possess scale, geographic reach and differentiated capabilities to manage the complexity of clinical trials will continue to grow at a higher rate and take market share versus the overall industry.
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Biotechnology sector growth. The U.S. biotechnology sector has grown rapidly over the last decade and has emerged as a key customer segment for the drug development services industry. The rate of biotechnology companies’ R&D spending growth has been higher than that of traditional pharmaceutical companies in recent years, and we believe that over the last five years, innovative biotechnology companies have accounted for approximately 40% of new drug approvals (“NDAs”). This has largely been fueled by a robust funding environment, both public and private, with over $150 billion of capital raised for biotechnology companies in the last three years. Today, we believe the majority of biotechnology companies have enough cash on hand to fund R&D expenditures for two to three years. Many biotechnology companies are smaller, discovery research-focused organizations that do not find it economically attractive to invest in the infrastructure and personnel necessary to conduct their clinical development programs on their own, and we believe they will continue to rely on CROs, like us, for their global drug development needs.
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Increasing importance to prove value of new therapies. As participants in the healthcare industry are increasingly focused on managing costs, biopharmaceutical companies need to find alternatives to align market constituents on the value of their treatments. The ability to perform peri- and post-approval studies to transform real-world data (such as medical claims data or electronic medical records) into real-world evidence provides biopharmaceutical companies a solution to quantify the value of new therapies to market constituents. Real-world data and evidence enable biopharmaceutical companies to develop better therapies and optimize the commercial potential of their new therapies. With increased R&D activity and competition among newly approved therapies in similar indications, we anticipate the continued adoption of real-world data and evidence to demonstrate the value of new medicines.
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Study start-up. We have acquired and embedded leading technologies and tools in our global start-up processes to (i) improve feasibility by helping our customers assess trial viability quickly and effectively and (ii) reduce study start-up timelines. Due to the substantial costs and investments associated with clinical trial starts, our ability to reduce key cycle times to below-industry averages addresses a critical need of our customers. For example, our median cycle time from final protocol received (“FPR”) to first site activated is more than 10% faster than industry benchmark cycle times. Similarly, our median time from FPR to the milestone of 50% of sites activated is more than 10% faster than industry benchmarks. This accelerated site activation, coupled with our clinical operations, has also resulted in significantly improved patient enrollment timelines: FPR to first patient, first visit is more than 10% faster and FPR to 50% patients enrolled is more than 30% faster than benchmarks.
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Accelerated Enrollment Solutions: Our AES delivery model aligns the fundamental components of the clinical trial execution process and extends across five continents, 17 countries and over 180 research sites. In the past five years, AES has participated in over 750 studies, including trials conducted by us, our customers and other CROs. Since 2013, we have deployed over $600 million making strategic acquisitions and bringing together complementary capabilities to create a delivery model which would be difficult to replicate. We believe our AES delivery model represents the industry’s largest aggregation of fully identified data on individuals who have provided their consent and indicated an interest in participating, or have participated, in clinical trials. With our AES delivery model, we are able to provide significant flexibility to our customers, giving them the ability to engage us for (i) discrete components of our AES service offerings, (ii) the full suite of AES capabilities or (iii) wholly integrated constructs which combine our AES offerings with our clinical development services. Through this model, we have been able to deliver compelling value propositions to our customers, including:
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significant percentages (e.g., 30% - 80%) of their trial enrollment with fewer sites, in less time and under one contract and uniform procedures and quality standards; and
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significantly faster start-up times and higher enrollment rates than the independent site model.
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Site monitoring. We have built and implemented a global risk-based monitoring model designed to efficiently focus site monitoring resources on key risks. Driven by an adaptive and intelligent monitoring model powered by real-time data analytics and remote site monitoring, we are able to provide an efficient and cost-effective study monitoring solution focused on the prevention and mitigation of protocol compliance risks in our customers’ clinical development programs. By focusing our on-site monitors on key risks, our differentiated site monitoring solution enables us to reduce our monitors’ time on site, translating to faster and lower-cost clinical trials with better quality oversight.
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Peri- and post-approval services. We are a leading provider of real-world research and evidence-based solutions designed to help sponsors support the real-world effectiveness, safety and value of biopharmaceutical and biotechnology products with capabilities in 35 countries. Through this offering, we provide our customers with critical scientific expertise and global operational capabilities to help generate the evidence needed to optimize the market access and commercial potential of their products. As of December 31, 2019, we had over 450 scientists and consultants conducting real-world, patient-centered, health economics, epidemiological and market access research. We specialize in engaging with key market constituents early in the drug development process to create an evidence strategy that will meet the needs of all relevant stakeholders. We develop evidence to demonstrate the safety, effectiveness and value of over 150 drugs and therapies per year across more than 20 countries. We have also contributed to a number of payer submissions, including the reversal of multiple decisions by the U.K.’s National Institute for Health and Care Excellence.
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Protocol design;
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Clinical trial strategic feasibility and investigator site selection;
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Project management;
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Site study startup activities;
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Clinical monitoring and data capture;
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Data management;
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Biostatistics;
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Safety medical monitoring/pharmacovigilance;
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Regulatory affairs;
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Medical writing;
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Global clinical supplies – including depots in Kiev, Ukraine; Moscow, Russia; Johannesburg, South Africa; and Athlone, Ireland;
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eClinical services;
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Quality assurance; and
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Virtual and digitally-enabled solutions.
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comply with specific requirements governing the selection of qualified investigators;
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obtain specific written commitments from the investigators;
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obtain IRB review and approval of the clinical trial;
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verify that appropriate patient informed consent is obtained before the patient participates in a clinical trial;
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ensure adverse drug reactions resulting from the administration of a drug or biologic during a clinical trial are medically evaluated and reported in a timely manner;
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monitor the validity and accuracy of data;
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maintain records regarding drug or biologic dispensing and disposition;
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instruct investigators and study staff to maintain records and reports; and
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permit appropriate governmental authorities access to data for review.
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Occupational Safety and Health Administration;
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Nuclear Regulatory Commission;
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Environmental Protection Agency;
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Department of Transportation;
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International Civil Aviation Organization;
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Department of Health and Human Services; and
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U.S. Drug Enforcement Administration (the “DEA”).
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clinical pharmacology unit in Austin, Texas and Las Vegas, Nevada;
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bioanalytical laboratories in Middleton, Wisconsin and Richmond, Virginia; and
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GMP laboratory in Middleton, Wisconsin.
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the size, complexity and duration of projects;
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the cancellation or delay of projects; and
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changes in the scope of work during the course of a project.
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lack of available funding or financing;
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mergers or acquisitions involving the customer;
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a change in customer priorities;
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products being tested fail to satisfy safety requirements or efficacy criteria;
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products have undesirable preclinical or clinical results;
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the customer decides to forgo a particular study;
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inability to enroll enough patients in a particular study;
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inability to recruit enough investigators for a particular study;
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the customer decides to shift business to a competitor or to use internal resources;
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manufacturing problems that cause shortages of the study drug;
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actions by regulatory authorities; and
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performance failures.
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disruption, impairment or failure of data centers, telecommunications facilities or other key infrastructure platforms;
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security breaches of, cyber-attacks on and other failures or malfunctions in our critical application systems or their associated hardware; and
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excessive costs, delays or other deficiencies in systems development and deployment.
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non-compliance generally could result in the termination of ongoing clinical trials or the disqualification of data for submission to regulatory authorities, or enforcement action from regulators;
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compromise of data from a particular trial, such as our failure to verify that informed consents were obtained from patients, could require us to repeat the trial under the terms of our contract at no further cost to our customer, but at a substantial cost to us;
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improperly conducting or reporting laboratory results could affect medical decisions for the patient in the trial as well as the clinical trial data and create liability for personal injury and breach of contract for us; and
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breach of a contractual term could result in liability for damages and/or termination of the contract.
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conducting a clinical trial in multiple countries is complex, and issues in one country can affect the progress of the trial in other countries and result in delays or cancellation of contracts;
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the United States or foreign countries could enact legislation or impose regulations, including unfavorable labor regulations, tax policies or economic sanctions, that could have an adverse effect on our ability to conduct business in or expatriate profits from the countries in which we operate;
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the complexities of operating within multiple tax jurisdictions, including potentially negative consequences from changes in tax laws or from current and future tax examinations;
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foreign countries are expanding or might expand their regulatory framework with respect to patient informed consent or other aspects of the conduct of clinical trials, which could delay or inhibit our ability to conduct trials in such countries;
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the regulatory or judicial authorities of foreign countries might not enforce legal rights and recognize business procedures in a manner to which we are accustomed or would reasonably expect;
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changes in political and economic conditions might lead to changes in the business environment in which we operate;
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changes in foreign currency exchange rates, including the impact of contractual provisions that shift the risk of unfavorable movement in certain exchange rates to us;
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potential violations of existing or newly enacted laws may cause difficulties in staffing and managing international operations;
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customers in foreign countries may have longer payment cycles, and it may be more difficult to collect receivables in those countries;
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political unrest could interrupt our services, endanger our personnel or cause project delays or loss of clinical trial material or results; and
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any failure by us to comply with foreign regulations or restrictions or become aware of and acknowledge changes in foreign regulations or restrictions, which could result in the delay of a clinical trial.
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the requirement to exclude from our quarterly worldwide effective income tax calculations losses in jurisdictions where no income tax benefit can be recognized;
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actual and projected full year pre-tax income;
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changes in existing tax laws and rates in various taxing jurisdictions;
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examinations or audits by taxing authorities;
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the use of foreign tax credits, and restrictions therein;
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changes in our capital structure;
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the establishment of valuation allowances against deferred income tax assets if we determine that it is more likely than not that future income tax benefits will not be realized; and
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other provisions of the Tax Act, including (i) base erosion and anti-abuse tax, if applicable, (ii) taxation of foreign-derived intangible income and global intangible low-taxed income and (iii) limitations on deductions for interest, among others.
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under difficult market conditions there can be no assurance that borrowings under our senior secured credit facilities would be available or sufficient, and in such a case, we might not be able to successfully obtain additional financing on reasonable terms, or at all;
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in order to respond to market conditions, we may need to seek waivers of various provisions in the credit agreement governing our senior secured credit facilities, and we might not be able to obtain such waivers on reasonable terms, if at all; and
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market conditions could result in our key customers experiencing financial difficulties and/or electing to limit spending or cause non-payment of invoices due, which in turn could result in decreased sales, cash flows and earnings for us.
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it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt, resulting in possible defaults on and acceleration of such indebtedness;
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our ability to obtain additional financing for working capital, capital expenditures, debt service requirements or other general corporate purposes may be impaired;
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a substantial portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, acquisitions and other purposes;
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we are more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited;
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our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt; and
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our ability to borrow additional funds or to refinance debt may be limited.
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incur additional indebtedness and guarantee indebtedness;
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pay dividends on or make distributions in respect of our common stock or make other restricted payments;
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make loans and investments;
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sell or otherwise dispose of assets;
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incur liens;
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consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
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enter into agreements restructuring our subsidiaries’ ability to pay dividends;
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enter into certain transactions with our affiliates; and
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designate our subsidiaries as unrestricted subsidiaries.
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limited in how we conduct our business;
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unable to raise additional debt or equity financing to operate during general economic or business downturns; or
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unable to compete effectively or to take advantage of new business opportunities.
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results of operations that vary from the expectations of securities analysts and investors;
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results of operations that vary from those of our competitors;
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changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;
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declines in the market prices of stocks generally;
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strategic actions by us or our competitors;
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announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;
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changes in general economic or market conditions or trends in our industry or markets;
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changes in business or regulatory conditions;
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additions or departures of key management personnel;
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future sales of our common stock or other securities by us or our existing stockholders, or the perception of such future sales;
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investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;
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the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
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announcements relating to litigation;
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guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
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the development and sustainability of an active trading market for our stock;
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changes in accounting principles; and
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other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
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the division of our board of directors into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year;
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that at any time when the Majority Sponsors and certain of their respective affiliates beneficially own, in the aggregate, less than 40% in voting power of the stock of our company entitled to vote generally in the election of directors, directors may only be removed for cause, and only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of stock entitled to vote thereon, voting together as a single class;
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the ability of our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control;
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advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings;
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the right of the Majority Sponsors and certain of their respective affiliates to nominate the majority of the members of our board of directors and the obligation of certain of our other pre-IPO stockholders to support such nominees;
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certain limitations on convening special stockholder meetings; and
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that certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may be amended only by the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class, if the Majority Sponsors and certain of their respective affiliates beneficially own, in the aggregate, less than 40% in voting power of our stock entitled to vote generally in the election of directors.
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Location
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Approximate square footage
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Middleton, Wisconsin (2 properties)
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273,000
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Richmond, Virginia (2 properties)
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251,000
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Austin, Texas (2 properties)
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225,000
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Morrisville, North Carolina (3 properties)
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220,000
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Sofia, Bulgaria
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153,000
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Bangalore, India
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111,000
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Manila, Philippines
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88,000
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Highland Heights, Kentucky
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72,000
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Location
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Approximate square footage
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Wilmington, North Carolina
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395,000
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Bellshill, United Kingdom
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70,000
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Brussels, Belgium
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43,000
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Beijing, China
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26,000
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Year Ended December 31,(1)
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2019(2)
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2018
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2017(2)
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2016(2)
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2015(2)
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(in thousands)
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Statement of operations data:
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Revenue:
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Revenue
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$
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4,031,017
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$
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3,748,971
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$
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2,767,476
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$
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2,467,941
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$
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2,073,484
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Reimbursed revenue(3)
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—
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—
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|
233,574
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|
|
211,624
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|
|
178,350
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|||||
Total revenue
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4,031,017
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|
|
3,748,971
|
|
|
3,001,050
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|
|
2,679,565
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|
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2,251,834
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|||||
Operating costs and expenses:
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||||||||||
Direct costs, exclusive of depreciation and amortization
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1,484,258
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|
|
1,333,812
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|
|
1,302,983
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|
|
1,175,051
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|
|
965,098
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|||||
Reimbursed costs
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924,634
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|
|
940,913
|
|
|
233,574
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|
|
211,624
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|
|
178,350
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|||||
Selling, general and administrative expenses
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938,806
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|
|
813,035
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|
|
809,333
|
|
|
718,139
|
|
|
652,900
|
|
|||||
Recapitalization costs
|
—
|
|
|
—
|
|
|
114,766
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
264,830
|
|
|
258,974
|
|
|
279,066
|
|
|
260,487
|
|
|
262,871
|
|
|||||
Goodwill and long-lived asset impairments
|
1,284
|
|
|
29,626
|
|
|
43,459
|
|
|
28,101
|
|
|
13,686
|
|
|||||
Total operating costs and expenses
|
3,613,812
|
|
|
3,376,360
|
|
|
2,783,181
|
|
|
2,393,402
|
|
|
2,072,905
|
|
|||||
Income from operations
|
417,205
|
|
|
372,611
|
|
|
217,869
|
|
|
286,163
|
|
|
178,929
|
|
|||||
Interest expense, net
|
(311,744
|
)
|
|
(263,618
|
)
|
|
(253,891
|
)
|
|
(203,294
|
)
|
|
(228,084
|
)
|
|||||
(Loss) gain on investments(4)
|
(19,043
|
)
|
|
15,936
|
|
|
92,750
|
|
|
61,576
|
|
|
19,525
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(131,755
|
)
|
|||||
Other (expense) income, net
|
(27,143
|
)
|
|
21,701
|
|
|
(40,259
|
)
|
|
22,448
|
|
|
19,462
|
|
|||||
Income (loss) before provision for (benefit from) income taxes
|
59,275
|
|
|
146,630
|
|
|
16,469
|
|
|
166,893
|
|
|
(141,923
|
)
|
|||||
Provision for (benefit from) income taxes
|
2,957
|
|
|
39,579
|
|
|
(284,360
|
)
|
|
(15,961
|
)
|
|
2,173
|
|
|||||
Income (loss) before equity in losses of unconsolidated affiliates
|
56,318
|
|
|
107,051
|
|
|
300,829
|
|
|
182,854
|
|
|
(144,096
|
)
|
|||||
Equity in losses of unconsolidated affiliates, net of income taxes
|
(3,563
|
)
|
|
(186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
52,755
|
|
|
106,865
|
|
|
300,829
|
|
|
182,854
|
|
|
(144,096
|
)
|
|||||
Loss from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,139
|
)
|
|||||
Net (income) loss attributable to noncontrolling interests
|
(4,934
|
)
|
|
(2,679
|
)
|
|
(4,802
|
)
|
|
241
|
|
|
1,678
|
|
|||||
Net income (loss) attributable to PPD, Inc.
|
47,821
|
|
|
104,186
|
|
|
296,027
|
|
|
183,095
|
|
|
(146,557
|
)
|
|||||
Recapitalization investment portfolio consideration
|
6,846
|
|
|
(7,849
|
)
|
|
(97,136
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to common stockholders of PPD, Inc.
|
$
|
54,667
|
|
|
$
|
96,337
|
|
|
$
|
198,891
|
|
|
$
|
183,095
|
|
|
$
|
(146,557
|
)
|
|
Year Ended December 31,(1)
|
||||||||||||||||||
|
2019(2)
|
|
2018
|
|
2017(2)
|
|
2016(2)
|
|
2015(2)
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings/(loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.20
|
|
|
$
|
0.34
|
|
|
$
|
0.68
|
|
|
$
|
0.59
|
|
|
$
|
(0.46
|
)
|
Diluted
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
$
|
0.68
|
|
|
$
|
0.58
|
|
|
$
|
(0.46
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
279,285
|
|
|
279,238
|
|
|
291,027
|
|
|
312,065
|
|
|
311,874
|
|
|||||
Diluted
|
280,693
|
|
|
279,317
|
|
|
293,826
|
|
|
316,553
|
|
|
311,874
|
|
|
Year Ended December 31,(1)
|
||||||||||||||||||
|
2019(2)
|
|
2018
|
|
2017(2)
|
|
2016(2)
|
|
2015(2)
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cash flow data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
432,946
|
|
|
$
|
423,406
|
|
|
$
|
359,079
|
|
|
$
|
407,995
|
|
|
$
|
416,288
|
|
Investing activities
|
(233,228
|
)
|
|
(90,525
|
)
|
|
(92,743
|
)
|
|
(519,746
|
)
|
|
(253,542
|
)
|
|||||
Financing activities
|
(422,039
|
)
|
|
(166,942
|
)
|
|
(249,393
|
)
|
|
130,465
|
|
|
(44,629
|
)
|
|||||
Other financial data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net authorizations(5)
|
3,827,291
|
|
|
3,420,954
|
|
|
2,485,419
|
|
|
3,051,596
|
|
|
2,491,584
|
|
|||||
Backlog (at end of period)(5)
|
7,066,254
|
|
|
6,313,710
|
|
|
5,730,568
|
|
|
6,006,644
|
|
|
5,192,054
|
|
|||||
Backlog conversion(5)
|
11.9
|
%
|
|
11.9
|
%
|
|
11.7
|
%
|
|
11.4
|
%
|
|
10.6
|
%
|
|||||
Net book-to-bill(5)
|
1.2x
|
|
|
1.2x
|
|
|
0.9x
|
|
|
1.2x
|
|
|
1.2x
|
|
|
As of December 31,(1)
|
||||||||||||||||||
2019(2)
|
|
2018
|
|
2017(2)
|
|
2016(2)
|
|
2015(2)
|
|||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
345,187
|
|
|
$
|
553,066
|
|
|
$
|
418,960
|
|
|
$
|
361,741
|
|
|
$
|
365,846
|
|
Property and equipment, net
|
458,845
|
|
|
399,103
|
|
|
384,187
|
|
|
382,946
|
|
|
333,737
|
|
|||||
Working capital
|
(288,059
|
)
|
|
137,456
|
|
|
30,352
|
|
|
150,452
|
|
|
252,699
|
|
|||||
Total assets
|
5,556,246
|
|
|
5,489,361
|
|
|
5,444,873
|
|
|
5,310,304
|
|
|
4,849,447
|
|
|||||
Total debt
|
5,643,928
|
|
|
4,795,684
|
|
|
4,822,234
|
|
|
4,309,112
|
|
|
3,655,200
|
|
|||||
Total stockholders’ deficit
|
(2,698,148
|
)
|
|
(1,522,421
|
)
|
|
(1,491,680
|
)
|
|
(964,241
|
)
|
|
(444,369
|
)
|
(1)
|
Financial data as of and for the years ended December 31, 2019 and 2018 is reported in accordance with ASC 606. Financial data as of and for the years ended December 31, 2017, 2016 and 2015 is reported in accordance with ASC 605.
|
(2)
|
We acquired Synarc Inc. on September 3, 2019, Medimix International on July 1, 2019, Optimal Research, LLC on September 1, 2017, Evidera Holdings, Inc. on September 1, 2016, Synexus Clinical Research Topco Limited on May 31, 2016, CRA Intermediate Holdings, Inc. on May 12, 2015 and the clinical research division of SNBL, subsequently renamed PPD-SNBL, on April 1, 2015. We own 60% of PPD-SNBL. The financial results of these entities have been included as of and since the dates of each acquisition.
|
(3)
|
Represents out-of-pocket revenues and related costs reimbursed by our customers at cost when we are the principal (and not the agent) in the relationship in accordance with ASC 605 for the years ended December 31, 2017, 2016 and 2015.
|
(4)
|
Represents the fair value accounting gains or losses primarily from our investments in Auven and venBio. The gains or losses from our investments in Auven and venBio will likely continue to fluctuate from period to period based on the changes in fair values of the net asset values of the limited partnerships and changes in the discounts applied to such investments for our lack of control and lack of marketability. A contingent liability for additional consideration estimated to be payable to certain owners prior to the 2017 recapitalization was recorded, primarily based on changes in the fair value of such investments, net of taxes and other related expenses. For more information, see Note 2, “Recapitalization Transaction” and Note 7, “Investments” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
|
(5)
|
Net authorizations represent new business awards, net of award or contract modifications, contract cancellations, foreign currency fluctuations and other adjustments. Backlog for all periods represents anticipated direct revenue for work not yet completed or performed (i) under signed contracts, letters of intent and, in some cases, awards that are supported by other forms of written communication and (ii) where there is sufficient or reasonable certainty about the customer’s ability and intent to fund and commence the services within six months. Backlog and net authorizations exclude the impact of net authorizations from anticipated third-party pass-through and out-of-pocket revenue. Backlog conversion represents the quarterly average of direct revenue for the period divided by opening backlog for that period. Net book-to-bill represents the amount of net authorizations for the period divided by direct revenue recognized in that period.
|
|
|
|
|
|
|
|
|
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
|
|
$
|
2,545,046
|
|
|
$
|
2,336,005
|
|
|
$
|
2,319,103
|
|
|
$
|
209,041
|
|
|
8.9
|
%
|
|
$
|
16,902
|
|
|
0.7
|
%
|
Segment direct costs
|
|
1,164,906
|
|
|
1,058,245
|
|
|
1,053,557
|
|
|
106,661
|
|
|
10.1
|
|
|
4,688
|
|
|
0.4
|
|
|||||
Segment SG&A expenses
|
|
530,311
|
|
|
476,408
|
|
|
464,794
|
|
|
53,903
|
|
|
11.3
|
|
|
11,614
|
|
|
2.5
|
|
|||||
Segment operating income
|
|
849,829
|
|
|
801,352
|
|
|
800,752
|
|
|
48,477
|
|
|
6.0
|
|
|
600
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||||||||
|
|
Years Ended December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||||||
(dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Segment revenue
|
|
$
|
598,691
|
|
|
$
|
501,805
|
|
|
$
|
448,373
|
|
|
$
|
96,886
|
|
|
19.3
|
%
|
|
$
|
53,432
|
|
|
11.9
|
%
|
Segment direct costs
|
|
307,346
|
|
|
258,473
|
|
|
235,137
|
|
|
48,873
|
|
|
18.9
|
|
|
23,336
|
|
|
9.9
|
|
|||||
Segment SG&A expenses
|
|
83,130
|
|
|
70,673
|
|
|
60,097
|
|
|
12,457
|
|
|
17.6
|
|
|
10,576
|
|
|
17.6
|
|
|||||
Segment operating income
|
|
208,215
|
|
|
172,659
|
|
|
153,139
|
|
|
35,556
|
|
|
20.6
|
|
|
19,520
|
|
|
12.7
|
|
(in thousands)
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Cash held in the United States
|
|
$
|
135,917
|
|
|
$
|
371,495
|
|
Cash held in foreign locations
|
|
209,270
|
|
|
181,571
|
|
||
Total
|
|
$
|
345,187
|
|
|
$
|
553,066
|
|
Revolving Credit Facility (net of letters of credit)
|
|
$
|
298,370
|
|
|
$
|
298,370
|
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by operating activities
|
|
$
|
432,946
|
|
|
$
|
423,406
|
|
|
$
|
359,079
|
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash used in investing activities
|
|
$
|
(233,228
|
)
|
|
$
|
(90,525
|
)
|
|
$
|
(92,743
|
)
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash used in financing activities
|
|
$
|
(422,039
|
)
|
|
$
|
(166,942
|
)
|
|
$
|
(249,393
|
)
|
|
|
Principal Balance
|
|
|
|
Interest Expense
|
||||
(dollars in thousands)
|
|
December 31, 2019
|
|
Average Effective
Interest Rate
|
|
For Year
Ended December 31,
2019
|
||||
Term Loan
|
|
$
|
3,096,429
|
|
|
4.51%
|
|
$
|
156,257
|
|
Revolving Credit Facility
|
|
—
|
|
|
—
|
|
1,715
|
|
||
OpCo Notes
|
|
1,125,000
|
|
|
6.61%
|
|
73,761
|
|
||
Initial HoldCo Notes
|
|
550,000
|
|
|
8.92%
|
|
46,294
|
|
||
Additional HoldCo Notes
|
|
900,000
|
|
|
8.90%
|
|
49,116
|
|
||
Other debt
|
|
5,707
|
|
|
1.13%
|
|
86
|
|
||
Finance lease obligations
|
|
28,726
|
|
|
Various
|
|
2,075
|
|
||
Total
|
|
$
|
5,705,862
|
|
|
|
|
$
|
329,304
|
|
(in thousands)
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025-Thereafter
|
|
Total
|
||||||||||
Long-term debt, including interest (1)
|
|
$
|
278,622
|
|
|
$
|
4,969,686
|
|
|
$
|
1,196,905
|
|
|
$
|
5,772
|
|
|
$
|
6,450,985
|
|
Finance leases
|
|
4,730
|
|
|
9,865
|
|
|
8,945
|
|
|
12,069
|
|
|
35,609
|
|
|||||
Operating leases
|
|
55,907
|
|
|
84,671
|
|
|
44,061
|
|
|
58,479
|
|
|
243,118
|
|
|||||
Purchase obligations and commitments (2)
|
|
91,484
|
|
|
24,417
|
|
|
9,650
|
|
|
1,954
|
|
|
127,505
|
|
|||||
Other liabilities (3)
|
|
20,787
|
|
|
28,436
|
|
|
—
|
|
|
—
|
|
|
49,223
|
|
|||||
Total
|
|
$
|
451,530
|
|
|
$
|
5,117,075
|
|
|
$
|
1,259,561
|
|
|
$
|
78,274
|
|
|
$
|
6,906,440
|
|
(1)
|
We may be required to make mandatory prepayments of principal under the Term Loan in future years based on our cash flows in those years. Future interest expense on our indebtedness included in the above table is calculated assuming a blended rate of 5.6%. The above amounts do not include interest costs related to the Revolving Credit Facility, as it was undrawn as of December 31, 2019. The amounts above also assume that the amounts outstanding at December 31, 2019 will remain outstanding until maturity, with minimum payments occurring as currently scheduled and no assumed future borrowings.
|
(in thousands)
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025-Thereafter
|
|
Total
|
||||||||||
Long-term debt, including interest (1)
|
|
$
|
236,713
|
|
|
$
|
3,421,798
|
|
|
$
|
1,196,905
|
|
|
$
|
5,772
|
|
|
$
|
4,861,188
|
|
(1)
|
We may be required to make mandatory prepayments of principal under the Term Loan in future years based on our cash flows in those years. Future interest expense on our indebtedness is calculated assuming a blended rate of 4.8%. The as adjusted above amounts do not include interest costs related to the Revolving Credit Facility, as it was undrawn as of December 31, 2019. The as adjusted amounts above also assume that the amounts will remain outstanding until maturity, with minimum payments occurring as currently scheduled and no future borrowings.
|
Date
|
Title
|
Effective Date
|
February 2016
|
Leases
|
Adopted January 1, 2019
|
Date
|
Title
|
Effective Date
|
August 2018
|
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
First annual period beginning on or after December 15, 2019 and interim periods therein
|
•
|
we translate statement of operations accounts at the exchange rates on the dates those elements are recognized or the average exchange rates for the relevant monthly period;
|
•
|
we translate balance sheet asset and liability accounts at the end of period exchange rates; and
|
•
|
we translate equity accounts at historical exchange rates.
|
Index to Consolidated Financial Statements
|
||
|
|
Page
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
|
|
|
|
Consolidated Statements of Stockholders’ Deficit and Redeemable Noncontrolling Interest for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
|
|
Notes to the Consolidated Financial Statements
|
|
|
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
|
|
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
|
%
|
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
|
$
|
2,545,046
|
|
|
$
|
2,336,005
|
|
|
$
|
2,319,103
|
|
Laboratory Services
|
598,691
|
|
|
501,805
|
|
|
448,373
|
|
|||
Total segment revenue
|
3,143,737
|
|
|
2,837,810
|
|
|
2,767,476
|
|
|||
Segment direct costs:
|
|
|
|
|
|
||||||
Clinical Development Services
|
1,164,906
|
|
|
1,058,245
|
|
|
1,053,557
|
|
|||
Laboratory Services
|
307,346
|
|
|
258,473
|
|
|
235,137
|
|
|||
Total segment direct costs
|
1,472,252
|
|
|
1,316,718
|
|
|
1,288,694
|
|
|||
Segment SG&A expenses:
|
|
|
|
|
|
||||||
Clinical Development Services
|
530,311
|
|
|
476,408
|
|
|
464,794
|
|
|||
Laboratory Services
|
83,130
|
|
|
70,673
|
|
|
60,097
|
|
|||
Total segment SG&A expenses
|
613,441
|
|
|
547,081
|
|
|
524,891
|
|
|||
Segment operating income:
|
|
|
|
|
|
||||||
Clinical Development Services
|
849,829
|
|
|
801,352
|
|
|
800,752
|
|
|||
Laboratory Services
|
208,215
|
|
|
172,659
|
|
|
153,139
|
|
|||
Total segment operating income
|
$
|
1,058,044
|
|
|
$
|
974,011
|
|
|
$
|
953,891
|
|
|
|
|
|
|
|
||||||
Total segment revenue
|
$
|
3,143,737
|
|
|
$
|
2,837,810
|
|
|
$
|
2,767,476
|
|
Other revenue not allocated to segments(1)
|
887,280
|
|
|
911,161
|
|
|
233,574
|
|
|||
Total revenue
|
4,031,017
|
|
|
3,748,971
|
|
|
3,001,050
|
|
|||
|
|
|
|
|
|
||||||
Total segment direct costs
|
1,472,252
|
|
|
1,316,718
|
|
|
1,288,694
|
|
|||
Total segment SG&A expenses
|
613,441
|
|
|
547,081
|
|
|
524,891
|
|
|||
|
|
|
|
|
|
||||||
Operating costs and expenses not allocated to segments:
|
|
|
|
|
|
||||||
Direct costs
|
12,006
|
|
|
17,094
|
|
|
14,289
|
|
|||
Reimbursed costs
|
924,634
|
|
|
940,913
|
|
|
233,574
|
|
|||
SG&A expenses
|
325,365
|
|
|
265,954
|
|
|
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
|
|
Name
|
|
Age
|
|
|
Position
|
David Simmons
|
|
55
|
|
|
Chairman and Chief Executive Officer
|
William J. Sharbaugh
|
|
57
|
|
|
Chief Operating Officer
|
Christopher G. Scully
|
|
49
|
|
|
Executive Vice President and Chief Financial Officer, Treasurer and Assistant Secretary
|
Glen Donovan
|
|
46
|
|
|
Chief Accounting Officer
|
Anshul Thakral
|
|
42
|
|
|
Executive Vice President, Chief Commercial Officer
|
B. Judd Hartman
|
|
56
|
|
|
Executive Vice President, General Counsel and Chief Administrative Officer
|
Christopher Fikry
|
|
43
|
|
|
Executive Vice President, Global Laboratory Services
|
Ronald Garrow
|
|
56
|
|
|
Executive Vice President and Chief Human Resource Officer
|
David Johnston
|
|
51
|
|
|
Executive Vice President of Global Clinical Development
|
Karen Kaucic
|
|
60
|
|
|
Executive Vice President and President of Evidera, Chief Medical Officer
|
Roger Smith
|
|
47
|
|
|
Senior Vice President and General Manager of AES
|
Joe Bress
|
|
37
|
|
|
Director
|
Stephen Ensley
|
|
35
|
|
|
Director
|
Maria Teresa Hilado
|
|
55
|
|
|
Director
|
Colin Hill
|
|
47
|
|
|
Director
|
Jeffrey B. Kindler
|
|
64
|
|
|
Director
|
P. Hunter Philbrick
|
|
40
|
|
|
Director
|
Allen R. Thorpe
|
|
49
|
|
|
Director
|
Stephen H. Wise
|
|
47
|
|
|
Director
|
•
|
David Simmons, Chairman and Chief Executive Officer
|
•
|
Christopher G. Scully, Executive Vice President and Chief Financial Officer
|
•
|
William J. Sharbaugh, Chief Operating Officer
|
•
|
Anshul Thakral, Executive Vice President, Chief Commercial Officer
|
•
|
B. Judd Hartman, Executive Vice President, General Counsel and Chief Administrative Officer
|
•
|
Performance-Based: A significant portion of executive compensation should be “at-risk,” performance-based pay linked to specific, measurable short-term and long-term goals that reward both organizational and individual performance;
|
•
|
Stockholder Aligned: Incentives should be structured to create a strong alignment between executives and stockholders on both a short-term and long-term basis; and
|
•
|
Market Competitive: Compensation levels and programs for executives, including the Named Executive Officers, should be competitive relative to the markets in which we operate and compete for talent. It is important to leverage an understanding of what constitutes competitive pay in our markets and build strategies to attract, incentivize, reward and retain top talent.
|
Agilent Technologies, Inc.
|
|
Charles River Labs International, Inc.
|
|
Mettler-Toledo International Inc.
|
|
Quest Diagnostics
Incorporated
|
|
|
|
|
|
|
|
Avantor, Inc.
|
|
Illumina, Inc.
|
|
PerkinElmer, Inc.
|
|
Syneos Health, Inc.
|
|
|
|
|
|
|
|
Bio-Rad Laboratories, Inc.
|
|
IQVIA Holdings Inc.
|
|
PRA Health Sciences, Inc.
|
|
|
|
|
|
|
|
|
|
Bruker Corporation
|
|
Laboratory Corporation of America Holdings
|
|
Perrigo Company plc
|
|
|
•
|
Challenging, but attainable goals that are well-defined and communicated;
|
•
|
Balance of short- and long-term variable compensation tied to a mix of commercial, financial and individual performance metrics; and
|
•
|
Establishment of controls in the administration of our plans to ensure performance against established company performance metrics is objectively and independently determined.
|
•
|
base salary;
|
•
|
annual incentive bonus; and
|
•
|
long-term equity incentive compensation in the form of stock options.
|
Name
|
|
2018 Base Salary
($) |
|
2019 Base Salary
($) |
|
2018 to 2019 Increase (%)
|
|||
David Simmons
|
|
1,566,720
|
|
|
1,566,720
|
|
|
—
|
|
Christopher G. Scully
|
|
495,000
|
|
|
495,000
|
|
|
—
|
|
William J. Sharbaugh
|
|
507,291
|
|
|
526,365(1)
|
|
|
3.8
|
|
Anshul Thakral
|
|
345,000
|
|
|
450,000(2)
|
|
|
30.4
|
|
B. Judd Hartman
|
|
443,439
|
|
|
456,742(1)
|
|
|
3.0
|
|
(1)
|
Effective April 1, 2019
|
(2)
|
Effective January 1, 2019, Mr. Thakral’s base salary was increased to $400,000 and effective November 1, 2019, his base salary was increased to $450,000.
|
Name
|
|
SEICP
|
|
|
Annual Authorization
Bonus (%)
|
||||||||
EBITDA Performance
Award Weight (%)
|
|
Gross Authorization
Performance Award
Weight (%)
|
|
Individual Qualitative
Performance Award
Weight (%)
|
|
|
|||||||
David Simmons
|
|
60
|
|
|
25
|
|
|
15
|
|
|
|
—
|
|
Christopher G. Scully
|
|
60
|
|
|
25
|
|
|
15
|
|
|
|
—
|
|
William J. Sharbaugh
|
|
60
|
|
|
25
|
|
|
15
|
|
|
|
—
|
|
Anshul Thakral
|
|
15
|
|
|
—
|
|
|
15
|
|
|
|
70
|
|
B. Judd Hartman
|
|
70
|
|
|
15
|
|
|
15
|
|
|
|
—
|
|
Achievement Relative to
Annual EBITDA Target
(%)
|
|
Leverage Ratio
(#)
|
|
Payout Percentage Range
(%)
|
<86
|
|
—
|
|
—
|
86
|
|
Threshold
|
|
8
|
87 to 97
|
|
8.0
|
|
16-96
|
97.5 to 102.5
|
|
Target
|
|
100
|
103 to 120+
|
|
5.75
|
|
102.9-200
|
Achievement Relative to
Annual Gross
Authorization Target
(%)
|
|
Leverage Ratio
(#)
|
|
Payout Percentage Range
(%)
|
<75
|
|
—
|
|
—
|
75
|
|
Threshold
|
|
50
|
76 to 94
|
|
2.5
|
|
52.5-97.5
|
95 to 105
|
|
Target
|
|
100
|
106 to 125+
|
|
1.25
|
|
101.25-125
|
•
|
Mr. Simmons: The individual performance goals set for Mr. Simmons focused on his impact and leadership in driving the Company to meet its financial guidance and corporate and strategic objectives established for the year. Mr. Simmons’ goals included building supplemental commercial capabilities, continuing to improve authorizations and backlog growth, strengthening our core global clinical development capabilities, refining our laboratory services strategy and meeting key talent, culture, colleague engagement and organizational development objectives.
|
•
|
Mr. Scully: The individual performance goals set for Mr. Scully focused on driving the Company’s financial and strategic performance through his leadership over the finance organization. Mr. Scully’s goals included improving authorization results, cost management, EBITDA and strengthening our core capabilities in financial operations.
|
•
|
Mr. Sharbaugh: The individual performance goals set for Mr. Sharbaugh focused on driving the Company’s financial and strategic performance as well as the operational performance of the Clinical Development Services and Laboratory Services segments. Mr. Sharbaugh’s goals included maintaining quality and compliance standards, supporting the commercial selling effort for existing and new strategic partnerships, developing growth strategies for our core businesses and integrating the Company’s site and patient access delivery model.
|
•
|
Mr. Thakral: The individual performance goals set for Mr. Thakral focused on driving the growth of our PPD Biotech model to support the Company’s financial and strategic performance. Mr. Thakral’s goals included achieving authorization goals and leading commercial selling efforts for existing and new PPD Biotech partnerships, developing business strategies and integrating the Company’s new service offerings into the commercial strategy.
|
•
|
Mr. Hartman: The individual performance goals set for Mr. Hartman focused on various enterprise priorities, including optimizing our senior leadership governance structure, co-chairing the Talent and Culture Committee and overseeing the implementation of our leadership, talent and culture strategies. Mr. Hartman’s goals included driving efficiencies and cost savings in the corporate functions that report to him (Legal, Quality and Enterprise Learning, Human Resources, Corporate Communication and Privacy), including through the use of technology and automation. Mr. Hartman’s goals further included the continued oversight and implementation of the ongoing transformation of the Human Resources function.
|
Authorization Achievement Relative to
Annual Authorization Goal
(%)
|
|
Leverage Ratio
(#)
|
|
Annual Payout Percentage Range
(%)
|
<90
|
|
—
|
|
—
|
90
|
|
Threshold
|
|
50.0
|
91 to 99
|
|
5.0
|
|
55.0-95.0
|
100
|
|
—
|
|
100.0
|
101 to 130
|
|
6.67
|
|
106.67-300.0
|
131+
|
|
1.0
|
|
301.0+
|
Name
|
|
2019 Bonus Eligible Earnings
($)
|
|
Target Bonus Opportunity (%)
|
|
Target Bonus Opportunity ($)
|
|
Combined Weighted Achievement Factor (%)
|
|
Actual Payout
($)
|
|||
David Simmons
|
|
1,566,720
|
|
|
100.0
|
|
1,566,720
|
|
|
92.3
|
|
1,445,299
|
|
Christopher G. Scully
|
|
495,000
|
|
|
75.0
|
|
371,250
|
|
|
92.3
|
|
342,478
|
|
William J. Sharbaugh
|
|
520,802
|
|
|
90.0
|
|
468,722
|
|
|
90.0
|
|
421,849
|
|
Anshul Thakral
|
|
|
|
|
|
|
|
|
|
|
|||
SEICP
|
|
403,958
|
|
|
22.5
|
|
90,891
|
|
|
105.0
|
|
95,435
|
|
Annual Authorization Bonus
|
|
400,000
|
|
|
52.5
|
|
210,000
|
|
|
111.3
|
|
233,814
|
|
B. Judd Hartman
|
|
452,862
|
|
|
50.0
|
|
226,431
|
|
|
95.5
|
|
216,242
|
|
Name
|
|
Time Option
Percentage (%)
|
|
EBITDA Option
Percentage (%)
|
|
Liquidity Event/Realization
Event Option
Percentage (%)
|
David Simmons
|
|
39.73
|
|
39.73
|
|
20.54
|
Christopher G. Scully
|
|
41.67
|
|
41.67
|
|
16.66
|
William J. Sharbaugh
|
|
38.89
|
|
38.89
|
|
22.22
|
Anshul Thakral
|
|
33.56
|
|
33.56
|
|
32.88
|
B. Judd Hartman
|
|
31.73
|
|
31.73
|
|
36.54
|
•
|
With respect to Time Options (both vested and unvested) and EBITDA Options (vested only), the Named Executive Officers were each entitled to a payment in an amount equal to (x) the number of shares underlying such Time Options and EBITDA Options multiplied by (y) the May 2019 Dividend amount, less applicable tax withholdings, and payable in accordance with the following schedule:
|
◦
|
1/3 of such payment was paid in May 2019;
|
◦
|
1/3 of such payment will be paid to the applicable Named Executive Officer in September 2020, subject to (x) the applicable Named Executive Officer’s continued employment through such date and (y) the accelerated vesting provisions included in the applicable option agreement; and
|
◦
|
1/3 of such payment will be paid to the applicable Named Executive Officer in September 2021, subject to (x) the applicable Named Executive Officer’s continued employment through such date and (y) the accelerated vesting provisions included in the applicable option agreement.
|
•
|
With respect to outstanding unvested Performance-Based Options, we reduced the per share exercise prices of such options by the per share May 2019 Dividend amount.
|
•
|
With respect to Time Options (both vested and unvested) and EBITDA Options (vested only), the Named Executive Officers were each entitled to a payment in an amount equal to (x) the number of shares underlying such Time Options and EBITDA Options multiplied by (y) the November 2019 Dividend amount, less applicable tax withholdings, and such payment was made in December 2019.
|
•
|
With respect to outstanding unvested Performance-Based Options, we reduced the per share exercise prices of such options by the per share November 2019 Dividend amount.
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Option
Awards
($)(1)
|
|
Non-Equity
Incentive Plan
Compensation
($)(2)
|
|
All Other
Compensation
($)(3)
|
|
Total
($)(7)
|
||||||
David Simmons
|
|
2019
|
|
1,566,720
|
|
|
—
|
|
|
4,540,218
|
|
|
1,445,299
|
|
|
107,602
|
|
|
7,659,839
|
|
Chairman and Chief Executive Officer
|
|
2018
|
|
1,566,720
|
|
|
—
|
|
|
—
|
|
|
1,488,384
|
|
|
37,976
|
|
|
3,093,080
|
|
Christopher G. Scully
|
|
2019
|
|
495,000
|
|
|
75,000
|
|
|
689,183
|
|
|
342,478
|
|
|
8,400
|
|
|
1,610,061
|
|
Executive Vice President and Chief Financial Officer
|
|
2018
|
|
290,654
|
|
|
400,000
|
|
|
3,187,399
|
|
|
—
|
|
|
90,942
|
|
|
3,968,995
|
|
William J. Sharbaugh
|
|
2019
|
|
521,662
|
|
|
—
|
|
|
1,174,857
|
|
|
421,849
|
|
|
47,305
|
|
|
2,165,673
|
|
Chief Operating Officer
|
|
2018
|
|
507,291
|
|
|
—
|
|
|
—
|
|
|
389,980
|
|
|
37,124
|
|
|
934,395
|
|
Anshul Thakral
|
|
2019
|
|
408,356
|
|
|
—
|
|
|
697,152
|
|
|
329,249
|
|
|
8,400
|
|
|
1,443,157
|
|
Executive Vice President, Chief Commercial Officer
|
|
2018
|
|
345,000
|
|
|
—
|
|
|
108,503
|
|
|
607,157
|
|
|
8,250
|
|
|
1,068,910
|
|
B. Judd Hartman
|
|
2019
|
|
453,462
|
|
|
75,000
|
|
|
507,374
|
|
|
216,242
|
|
|
8,400
|
|
|
1,260,478
|
|
Executive Vice President, General Counsel and Chief Administrative Officer
|
|
2018
|
|
432,760
|
|
|
—
|
|
|
—
|
|
|
209,889
|
|
|
8,250
|
|
|
650,899
|
|
(1)
|
As described in “Compensation Discussion and Analysis—2019 Cash Dividends,” changes to the stock options required in connection with the May 2019 Dividend and the November 2019 Dividend were accounted for as modifications under ASC Topic 718. Amounts reported for 2019 reflect the incremental fair values calculated in accordance with ASC Topic 718 with respect to each dividend for each of our Named Executive Officers as follows:
|
Named Executive Officer
|
|
May 2019 Dividend
|
|
November 2019 Dividend
|
||||
David Simmons
|
|
$
|
4,361,137
|
|
|
$
|
179,081
|
|
Christopher G. Scully
|
|
661,469
|
|
|
27,714
|
|
||
William J. Sharbaugh
|
|
1,128,517
|
|
|
46,340
|
|
||
Anshul Thakral
|
|
388,154
|
|
|
16,495
|
|
||
B. Judd Hartman
|
|
403,042
|
|
|
16,550
|
|
(2)
|
Amounts reported for 2019 represent the 2019 annual cash incentive awards earned pursuant to our SEICP (and Mr. Thakral’s Annual Authorization Bonus). Amounts reported for 2018 represent awards earned pursuant to our SEICP in 2018. For Mr. Thakral, the amount also includes his Annual Authorization Bonus. Mr. Scully, our Chief Financial Officer who commenced service in May 2018, received a fixed bonus of $225,000 in lieu of his participation in the SEICP for 2018, which is included in the “Bonus” column for 2018. Effective beginning in 2019, Mr. Scully’s Employment Agreement provides for a targeted annual cash bonus of 75% of annual base salary under the SEICP. For additional information, see “—Compensation Discussion and Analysis—2019 Annual Cash Incentive Compensation.”
|
(3)
|
Other compensation includes the amounts set forth in the following table:
|
Name
|
|
Year
|
|
Employer
Contribution
to 401(k)
($)
|
|
Relocation
Benefits
($)(a)
|
|
Company
Aircraft
($)(b)
|
|
Total
($)
|
||||
David Simmons.
|
|
2019
|
|
8,400
|
|
|
—
|
|
|
99,202
|
|
|
107,602
|
|
|
|
2018
|
|
8,250
|
|
|
—
|
|
|
29,726
|
|
|
37,976
|
|
Christopher G. Scully.
|
|
2019
|
|
8,400
|
|
|
—
|
|
|
—
|
|
|
8,400
|
|
|
|
2018
|
|
4,950
|
|
|
85,992
|
|
|
—
|
|
|
90,942
|
|
William J. Sharbaugh
|
|
2019
|
|
8,400
|
|
|
—
|
|
|
38,905
|
|
|
47,305
|
|
|
|
2018
|
|
8,250
|
|
|
—
|
|
|
28,874
|
|
|
37,124
|
|
Anshul Thakral
|
|
2019
|
|
8,400
|
|
|
—
|
|
|
—
|
|
|
8,400
|
|
|
|
2018
|
|
8,250
|
|
|
—
|
|
|
—
|
|
|
8,250
|
|
B. Judd Hartman
|
|
2019
|
|
8,400
|
|
|
—
|
|
|
—
|
|
|
8,400
|
|
|
|
2018
|
|
8,250
|
|
|
—
|
|
|
—
|
|
|
8,250
|
|
(a)
|
Amount represents payments to Mr. Scully as reimbursement for relocation expenses, which was subject to repayment in the event of Mr. Scully’s resignation without good reason or termination by the Company for cause (each as defined in his Employment Agreement discussed below), in either case prior to May 15, 2019.
|
(b)
|
Amounts represent the aggregate incremental cost of personal use of our airplane. Incremental costs include fuel costs, crew travel expenses, passenger catering expenses, trip-related maintenance costs, landing and facility fees, trip-related hangar and parking costs and other similar variable costs. In 2018 and 2019, Mr. Simmons used our airplane for personal use for a total of 4,114 and 15,676 miles, respectively. In 2018 and 2019, Mr. Sharbaugh used our airplane for personal use for a total of 4,676 and 5,466 miles, respectively. In addition, family members of each of Messrs. Simmons and Scully have, in limited circumstances, accompanied them on business travel on our airplane for which we incurred de minimis incremental costs.
|
(4)
|
Mr. Scully commenced employment with the Company in May 2018. Amount represents the portion of Mr. Scully’s annual base salary paid to him in 2018.
|
(5)
|
Amounts reported for 2019 represent the special cash recognition awards paid to Messrs. Scully and Hartman. Amount reported for 2018 represents Mr. Scully’s sign-on bonus payment of $175,000 paid to him at the time he commenced employment with the Company in May 2018, which was subject to repayment in the event of Mr. Scully’s resignation without good reason or termination by us for cause, in either case prior to May 15, 2019, and a fixed bonus of $225,000 paid to him in March 2019, in lieu of his participation in the SEICP for 2018.
|
(6)
|
Mr. Thakral’s annual base salary was increased from $400,000 to $450,000, effective November 1, 2019.
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
Grant Date
Fair Value
of Stock
and Option
Awards($)
(4)
|
||||||||||||||||||
Name
|
|
Grant
Date
|
|
Threshold
($)(2)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)(3)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|||||||||||||||
David Simmons
2019 SEICP
|
|
—
|
|
|
75,203
|
|
|
1,566,720
|
|
|
2,604,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Christopher G. Scully
2019 SEICP
|
|
—
|
|
|
17,820
|
|
|
371,250
|
|
|
617,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
William J. Sharbaugh
2019 SEICP
|
|
—
|
|
|
22,499
|
|
|
468,722
|
|
|
779,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Anshul Thakral
2019 SEICP
|
|
—
|
|
|
3,636
|
|
|
90,891
|
|
|
136,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Annual Authorization Bonus
|
|
—
|
|
|
105,000
|
|
|
210,000
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Time Options
|
|
11/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,041
|
|
|
21.70
|
|
|
146,251
|
|
||||||
EBITDA Options
|
|
11/26/2019
|
|
|
|
|
|
|
|
|
2,304
|
|
|
23,041
|
|
|
—
|
|
|
|
|
21.70
|
|
|
146,251
|
|
||||
Realization Event Options
|
|
11/26/2019
|
|
|
|
|
|
|
|
|
—
|
|
|
23,041
|
|
|
—
|
|
|
|
|
21.70
|
|
|
—
|
|
||||
B. Judd Hartman
2019 SEICP
|
|
—
|
|
|
12,680
|
|
|
226,431
|
|
|
393,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Time Options
|
|
12/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,912
|
|
|
21.70
|
|
|
43,891
|
|
||||||
EBITDA Options
|
|
12/30/2019
|
|
|
|
|
|
|
|
|
691
|
|
|
6,912
|
|
|
|
|
|
|
21.70
|
|
|
43,891
|
|
(1)
|
The amounts reported in these columns reflect the cash incentive award opportunity range under our SEICP and, for Mr. Thakral, under his Annual Authorization Bonus, for 2019, the terms of which are summarized under “—Compensation Discussion and Analysis—2019 Annual Cash Incentive Compensation” above.
|
(2)
|
For purposes of this table, the “Threshold” amount shown for the SEICP represents an assumption that the Named Executive Officer only earns the threshold payout under the EBITDA Performance Award, and the Company did not achieve the threshold level for the Gross Authorization Performance Award and there was no payout under the Individual Qualitative Performance Award.
|
(3)
|
For the EBITDA Options, amount reported in the “Threshold” column assumes that 10% of the EBITDA Options granted will vest.
|
(4)
|
The amounts reported for Mr. Thakral under “Time Options,” “EBITDA Options” and “Realization Event Options” represent the grant date fair values of such options granted to Mr. Thakral in 2019. The amounts reported for Mr. Hartman under “Time Options” and “EBITDA Options” represent the grant date fair values of such options granted to Mr. Hartman in 2019. The grant date fair values of the EBITDA Options and Realization Event Options are based on the probable outcome of the performance conditions. See footnote 1 to the Summary Compensation Table.
|
•
|
On May 2, 2018, Pharmaceutical Product Development, LLC and the Company entered into a Named Executive Officer Employment Agreement with Mr. Scully, effective for employment as of May 15, 2018, pursuant to which Mr. Scully serves as our Executive Vice President and Chief Financial Officer;
|
•
|
On April 10, 2012, Pharmaceutical Product Development, LLC and Jaguar Holding Company I entered into a Named Executive Officer Employment Agreement with Mr. Sharbaugh, which was subsequently amended pursuant to that Amendment No. 1, dated February 10, 2016, assigned to, and assumed by, the Company on May 11, 2017 and further amended pursuant to that Amendment No. 2, dated March 1, 2019 pursuant to which Mr. Sharbaugh serves as our Chief Operating Officer;
|
•
|
On April 10, 2012, Pharmaceutical Product Development, LLC and Jaguar Holding Company I entered into a Named Executive Officer Employment Agreement with Mr. Hartman which was subsequently amended pursuant to that Amendment No. 1, dated February 10, 2016, assigned to, and assumed by, the Company on May 11, 2017 and further amended pursuant to that Amendment No. 2, dated April 1, 2018, and that Amendment No. 3, dated December 18, 2019, pursuant to which Mr. Hartman serves as our Executive Vice President, General Counsel and Chief Administrative Officer; and
|
•
|
On June 15, 2016, Pharmaceutical Product Development, LLC and Jaguar Holding Company I entered into a Named Executive Officer Employment Agreement with Mr. Thakral, effective as of June 27, 2016, which was subsequently amended pursuant to that Amendment No. 1, dated September 28, 2016, assigned to, and assumed by, the Company on May 11, 2017 and further amended pursuant to that Amendment No. 2, dated April 1, 2018 and that Amendment No. 3 dated January 1, 2019, pursuant to which Mr. Thakral served as our Executive Vice President, Global Head of PPD Biotech. On November 26, 2019, Pharmaceutical Product Development, LLC and the Company entered into an amended and restated Named Executive Officer Employment Agreement with Mr. Thakral, effective as of November 1, 2019, which supersedes his then-existing Named Executive Officer Employment Agreement and pursuant to which Mr. Thakral serves as our Executive Vice President and Chief Commercial Officer.
|
|
|
Grant Date
|
|
Option Awards(1)
|
||||||||||||
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)(2)
|
|
Option
Expiration
Date
|
||||||
David Simmons
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time Options(3)
|
|
5/11/2017
|
|
590,878
|
|
|
1,156,316
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
|
EBITDA Options(3)
|
|
5/11/2017
|
|
751,605
|
|
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
||
EBITDA Options(3)
|
|
5/11/2017
|
|
366,166
|
|
|
|
|
809,423
|
|
|
10.59
|
|
|
5/11/2027
|
|
Liquidity Event Options(3)
|
|
5/11/2017
|
|
|
|
|
|
996,824
|
|
|
10.59
|
|
|
5/11/2027
|
||
Christopher G. Scully
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time Options(4)
|
|
6/21/2018
|
|
64,494
|
|
|
257,970
|
|
|
|
|
15.51
|
|
|
6/21/2028
|
|
EBITDA Options(4)
|
|
6/21/2018
|
|
61,268
|
|
|
|
|
|
|
15.51
|
|
|
6/21/2028
|
||
EBITDA Options(4)
|
|
6/21/2018
|
|
61,269
|
|
|
|
|
199,927
|
|
|
11.05
|
|
|
6/21/2028
|
|
Realization Event Options(4)
|
|
6/21/2018
|
|
|
|
|
|
128,986
|
|
|
11.05
|
|
|
6/21/2028
|
||
William J. Sharbaugh
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time Options(3)
|
|
5/11/2017
|
|
186,075
|
|
|
279,109
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
|
EBITDA Options(3)
|
|
5/11/2017
|
|
181,420
|
|
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
||
EBITDA Options(3)
|
|
5/11/2017
|
|
88,384
|
|
|
|
|
195,379
|
|
|
10.59
|
|
|
5/11/2027
|
|
Realization Event Options(3)
|
|
5/11/2017
|
|
|
|
|
|
265,819
|
|
|
10.59
|
|
|
5/11/2027
|
||
Anshul Thakral
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time Options(3)
|
|
5/11/2017
|
|
59,810
|
|
|
89,713
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
|
EBITDA Options(3)
|
|
5/11/2017
|
|
58,313
|
|
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
||
EBITDA Options(3)
|
|
5/11/2017
|
|
28,409
|
|
|
|
|
62,801
|
|
|
10.59
|
|
|
5/11/2027
|
|
Realization Event Options(3)
|
|
5/11/2017
|
|
|
|
|
|
132,909
|
|
|
10.59
|
|
|
5/11/2027
|
||
Time Options(5)
|
|
12/14/2018
|
|
2,572
|
|
|
10,281
|
|
|
|
|
19.45
|
|
|
12/14/2028
|
|
EBITDA Options(5)
|
|
12/14/2018
|
|
2,443
|
|
|
|
|
10,410
|
|
|
14.99
|
|
|
12/14/2028
|
|
Realization Event Options(5)
|
|
12/14/2018
|
|
|
|
|
|
25,707
|
|
|
14.99
|
|
|
12/14/2028
|
||
Time Options(6)
|
|
11/26/2019
|
|
|
|
23,041
|
|
|
|
|
21.70
|
|
|
11/26/2029
|
||
EBITDA Options(6)
|
|
11/26/2019
|
|
|
|
|
|
23,041
|
|
|
21.70
|
|
|
11/26/2029
|
||
Realization Event Options(6)
|
|
11/26/2019
|
|
|
|
|
|
23,041
|
|
|
21.70
|
|
|
11/26/2029
|
||
B. Judd Hartman
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Time Options(3)
|
|
5/11/2017
|
|
66,456
|
|
|
99,681
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
|
EBITDA Options(3)
|
|
5/11/2017
|
|
64,793
|
|
|
|
|
|
|
15.05
|
|
|
5/11/2027
|
||
EBITDA Options(3)
|
|
5/11/2017
|
|
31,566
|
|
|
|
|
69,777
|
|
|
10.59
|
|
|
5/11/2027
|
|
Realization Event Options(3)
|
|
5/11/2017
|
|
|
|
|
|
199,364
|
|
|
10.59
|
|
|
5/11/2027
|
||
Time Options(7)
|
|
12/30/2019
|
|
|
|
6,912
|
|
|
|
|
21.70
|
|
|
12/30/2029
|
||
EBITDA Options(7)
|
|
12/30/2019
|
|
|
|
|
|
6,912
|
|
|
21.70
|
|
|
12/30/2029
|
(1)
|
The detailed grant and vesting provisions of the options are discussed above in “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards.”
|
(2)
|
In connection with each of the May 2019 Dividend and the November 2019 Dividend, the exercise prices for then outstanding unvested Performance-Based Options were reduced by the per share May 2019 Dividend amount and the per share November 2019 Dividend amount, respectively. See “—2019 Cash Dividends.”
|
(3)
|
Represents options granted to Messrs. Simmons, Sharbaugh, Thakral and Hartman in connection with the recapitalization. The remaining three annual installments of Time Options vest equally on May 11, 2020, 2021 and 2022, subject to each respective individual’s continued employment on each vesting date. A portion of the unvested Time Options granted to Mr. Simmons vested as of immediately prior to the IPO such that 50% of the total number of Time Options granted to Mr. Simmons were vested and exercisable as of immediately prior to the IPO. 95.0% of the vesting installment vested on December 31, 2019. The remaining two annual installments of EBITDA Options vest equally on December 31, 2020 and 2021, subject to attainment of the predetermined EBITDA target for the 2020 and 2021 fiscal years. The Liquidity Event Options granted to Mr. Simmons vest immediately prior to a Simmons Liquidity Event and the Realization Event Options granted to Messrs. Sharbaugh, Thakral and Hartman vest immediately prior to a Realization Event, each as described in more detail under “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards” above.
|
(4)
|
Represents options granted to Mr. Scully in connection with the commencement of his employment in May 2018. The remaining four annual installments of Time Options vest equally on May 15, 2020, 2021, 2022 and 2023, subject to his continued employment on each vesting date. 95.0% of the vesting installment vested on December 31, 2019. The remaining three annual installments of EBITDA Options vest equally on December 31, 2020, 2021 and 2022, subject to attainment of the predetermined EBITDA target for the 2020, 2021 and 2022 fiscal years. The Realization Event Options vest immediately prior to a Realization Event, as described in more detail under “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards” above.
|
(5)
|
Represents options granted to Mr. Thakral in connection with his promotion to Executive Vice President, Global Head of PPD Biotech, effective January 2019. The four remaining annual installments of Time Options vest equally on December 14, 2020, 2021, 2022 and 2023, subject to his continued employment on each vesting date. 95.0% of the vesting installment vested on December 31, 2019. The four annual installments of EBITDA Options vest equally on December 31, 2020, 2021, 2022 and 2023, subject to our attainment of the predetermined EBITDA target for the 2020, 2021, 2022 and 2023 fiscal years. The Realization Event Options vest immediately prior to a Realization Event, as described in more detail under “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards” above.
|
(6)
|
Represents options granted to Mr. Thakral in connection with his promotion to Executive Vice President, Chief Commercial Officer, effective November 2019. The five annual installments of Time Options vest equally on November 26, 2020, 2021, 2022, 2023 and 2024, subject to his continued employment on each vesting date. The five annual installments of EBITDA Options vest equally on December 31, 2020, 2021, 2022, 2023 and 2024, subject to our attainment of the predetermined EBITDA target for the 2020, 2021, 2022, 2023 and 2024 fiscal years. The Realization Event Options vest immediately prior to a Realization Event, as described in more detail under “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards” above.
|
(7)
|
Represents options granted to Mr. Hartman in connection with his special equity recognition award. The five annual installments of Time Options vest equally on December 30, 2020, 2021, 2022, 2023 and 2024, subject to his continued employment on each vesting date. The five annual installments of EBITDA Options vest equally on December 31, 2020, 2021, 2022, 2023 and 2024, subject to our attainment of the predetermined EBITDA target for the 2020, 2021, 2022, 2023 and 2024 fiscal years.
|
|
|
Option Awards
|
||||
Name
|
|
Number
of Shares
Acquired
on
Exercise
(#)
|
|
Value
Realized
on
Exercise(1)
($)
|
||
David Simmons
|
|
180,000
|
|
|
792,400
|
|
Christopher G. Scully
|
|
—
|
|
|
—
|
|
William J. Sharbaugh
|
|
—
|
|
|
—
|
|
Anshul Thakral
|
|
—
|
|
|
—
|
|
B. Judd Hartman
|
|
—
|
|
|
—
|
|
(1)
|
Represents the value of exercised options calculated by multiplying (i) the gross number of shares of our common stock acquired upon exercise by (ii) the excess of the per share fair market value of our common stock on the date of exercise, as determined by the most current valuation of our common stock prior to such exercise, over the exercise price of the option.
|
Name
|
|
Payment Type
|
|
Termination
Without Cause
(Including
Non-Extension of Term)
($)
|
|
Termination
for Good
Reason
($)
|
|
Termination
due to
Death or
Disability
($)
|
|||
David Simmons
|
|
Cash Severance(1)
|
|
5,483,520
|
|
|
5,483,520
|
|
|
5,483,520
|
|
Benefit Continuation(2)
|
|
48,546
|
|
|
48,546
|
|
|
48,546
|
|
||
Total
|
|
5,532,066
|
|
|
5,532,066
|
|
|
5,532,066
|
|
||
Christopher G. Scully
|
|
Cash Severance(3)
|
|
1,113,750
|
|
|
1,113,750
|
|
|
—
|
|
Benefit Continuation(2)
|
|
25,964
|
|
|
25,964
|
|
|
—
|
|
||
Total
|
|
1,139,714
|
|
|
1,139,714
|
|
|
—
|
|
||
William J. Sharbaugh
|
|
Cash Severance(3)
|
|
1,263,276
|
|
|
1,263,276
|
|
|
—
|
|
Benefit Continuation(2)
|
|
37,007
|
|
|
37,007
|
|
|
—
|
|
||
Total
|
|
1,300,283
|
|
|
1,300,283
|
|
|
—
|
|
||
Anshul Thakral
|
|
Cash Severance(3)
|
|
1,012,500
|
|
|
1,012,500
|
|
|
—
|
|
Benefit Continuation(2)
|
|
37,007
|
|
|
37,007
|
|
|
—
|
|
||
Total
|
|
1,049,507
|
|
|
1,049,507
|
|
|
—
|
|
||
B. Judd Hartman
|
|
Cash Severance(3)
|
|
913,485
|
|
|
913,485
|
|
|
—
|
|
Benefit Continuation(2)
|
|
37,007
|
|
|
37,007
|
|
|
—
|
|
||
Total
|
|
950,492
|
|
|
950,492
|
|
|
—
|
|
(1)
|
Amount represents the sum of (i) 2.0 times annual base salary and (ii) 1.5 times the annual target bonus for 2019; however, if the resignation for good reason resulted from Mr. Simmons not becoming the Chief Executive Officer of the ultimate parent of any successor entity or division operating our business following a change in control, the amount would be equal to the sum of (i) 1.0 times annual base salary and (ii) 1.0 times the annual target bonus for 2019, or $3,133,440.
|
(2)
|
Amounts represent monthly payments equal to the COBRA premiums required for continuation of group medical, dental and vision benefits for the Named Executive Officer and the Named Executive Officer’s dependents for up to 24 months for Mr. Simmons and 18 months for each of our other Named Executive Officers.
|
(3)
|
Amount represents the sum of (i) 1.5 times annual base salary and (ii) 1.0 times the annual target bonus for 2019.
|
Name
|
|
Equity
Award(1)
|
|
Qualifying
Termination
($)(2)
|
|
IPO
($)(3)
|
|
Significant
Sale
($)(4)
|
|
Qualifying
Sale
($)(5)
|
|
Liquidity
Event
($)(6)
|
|
Performance
Liquidity
Event /
Liquidity
Hurdle
Achievement
($)(7)
|
|
Change of
Control
Transaction/
Termination
Following a
Change of
Control
Transaction
($)(8)
|
|||||||
David Simmons
|
|
Time
Options
|
|
2,952,885
|
|
|
2,302,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,817,964
|
|
EBITDA
Options
|
|
6,008,784
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Liquidity
Event
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
8,961,669
|
|
|
2,302,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,817,964
|
|
||
Christopher G. Scully
|
|
Time
Options
|
|
466,940
|
|
|
—
|
|
|
1,148,571
|
|
|
—
|
|
|
2,964,075
|
|
|
—
|
|
|
2,964,075
|
|
EBITDA
Options
|
|
977,241
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Realization
Event
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
1,444,181
|
|
|
—
|
|
|
1,148,571
|
|
|
—
|
|
|
2,964,075
|
|
|
—
|
|
|
2,964,075
|
|
||
William J. Sharbaugh
|
|
Time
Options
|
|
712,758
|
|
|
—
|
|
|
611,480
|
|
|
—
|
|
|
3,335,341
|
|
|
—
|
|
|
3,335,341
|
|
EBITDA
Options
|
|
1,450,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Realization
Event
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
2,163,139
|
|
|
—
|
|
|
611,480
|
|
|
—
|
|
|
3,335,341
|
|
|
—
|
|
|
3,335,341
|
|
||
Anshul Thakral
|
|
Time
Options
|
|
232,351
|
|
|
—
|
|
|
288,890
|
|
|
—
|
|
|
1,271,790
|
|
|
—
|
|
|
1,271,790
|
|
EBITDA
Options
|
|
495,532
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Realization
Event
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
727,883
|
|
|
—
|
|
|
288,890
|
|
|
—
|
|
|
1,271,790
|
|
|
—
|
|
|
1,271,790
|
|
||
B. Judd Hartman
|
|
Time
Options
|
|
254,583
|
|
|
—
|
|
|
237,056
|
|
|
—
|
|
|
1,227,811
|
|
|
—
|
|
|
1,227,811
|
|
EBITDA
Options
|
|
517,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Realization
Event
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
772,581
|
|
|
—
|
|
|
237,056
|
|
|
—
|
|
|
1,227,811
|
|
|
—
|
|
|
1,227,811
|
|
(1)
|
Amounts reported are based on our common stock having a fair market value of $21.70 per share as of the date of the most current valuation of our common stock on or prior to December 31, 2019. For additional details regarding the treatment of the options under each of the termination events in this table, see “—Accelerated Vesting of Equity Awards” above.
|
(2)
|
Amounts reported reflect partial accelerated vesting of Time Options held by each Named Executive Officer in connection with certain qualifying terminations of employment. The next installment of EBITDA Options scheduled to vest following certain qualifying terminations of employment will remain eligible to vest and become exercisable provided and to the extent that the Compensation Committee determines that the predetermined EBITDA target has been achieved, subject to the execution of a general release of claims in favor of the Company by the Named Executive Officer (other than Mr. Simmons for whom no such release is required). Amounts reported reflect the 2019 vesting installment vesting at 95.0% based on actual performance.
|
(3)
|
Amounts reported reflect partial accelerated vesting of Time Options held by Mr. Simmons immediately prior to an initial public offering such that the total percentage of Mr. Simmons’ vested Time Options is equal to 50.0%. Such acceleration occurred as of immediately prior to the IPO.
|
(4)
|
Assumes that a Significant Sale occurs in which the Sponsors sell 51.0% of their equity investment in the Company. With respect to the Named Executive Officers other than Mr. Simmons, the amounts reported reflect partial accelerated vesting of Time Options immediately prior to the Significant Sale such that the total percentage of the Named Executive Officer’s vested Time Options is equal to 51% (the percentage of the Sponsors’ assumed investment sold in connection with such Significant Sale).
|
(5)
|
Upon a Qualifying Sale, if the total percentage of the vested EBITDA Options held by each of our Named Executive Officers other than Mr. Simmons is less than the percentage of our Sponsors’ investment sold in connection with the Qualifying Sale, then a portion of the Named Executive Officer’s unvested EBITDA Options will vest and become exercisable immediately prior to the Qualifying Sale such that the total percentage of the Named Executive Officer’s vested EBITDA Options is equal to the percentage of our Sponsors’ investment sold in connection with the Qualifying Sale. Amounts reported assume that a Significant Sale occurs but such Significant Sale would not have constituted a Qualifying Sale and therefore there would have been no accelerated vesting of EBITDA Options.
|
(6)
|
Amounts reported reflect full accelerated vesting of Time Options for each of the Named Executive Officers other than Mr. Simmons in connection with a Liquidity Event.
|
(7)
|
Vesting of EBITDA Options fully accelerates for Mr. Simmons in the event of a Performance Liquidity Event and, for each of the other Named Executive Officers, in the event that the Liquidity Hurdles are achieved in connection with a Liquidity Event. Amounts reported for Mr. Simmons assume that a Performance Liquidity Event would not have occurred and, for each of the Named Executive Officers other than Mr. Simmons, that the Liquidity Hurdles would not have been achieved in connection with a Liquidity Event and therefore there would have been no accelerated vesting of EBITDA Options.
|
(8)
|
Amounts reported reflect full accelerated vesting of Time Options for Mr. Simmons in connection with a Change of Control Transaction and, for each of the Named Executive Officers other than Mr. Simmons, in the event of a termination by the Company without cause, by the Named Executive Officer for good reason or due to the Named Executive Officer’s death or disability following a Change of Control Transaction. In addition, in the event that Mr. Simmons’ Liquidity Event Options and the other Named Executive Officers’ Realization Event Options (other than the Realization Event Options granted to Mr. Thakral in 2019) have not otherwise vested either prior to or in connection with a Change of Control Transaction, such options would fully vest in connection with a Change of Control Transaction if the enterprise value of the Company exceeds the required multiple of 2019 EBITDA and certain EBITDA thresholds were met in 2018. Amounts reported assume that the Liquidity Event Options and Realization Options do not vest in connection with a Change of Control Transaction.
|
Committee
|
|
Committee Member Retainer
|
|
Committee Chair
Retainer
|
||||
Audit Committee
|
|
$
|
10,000
|
|
|
$
|
25,000
|
|
Compensation Committee
|
|
7,500
|
|
|
20,000
|
|
||
Nominating and Corporate Governance Committee
|
|
5,000
|
|
|
15,000
|
|
Name
|
|
Fees
Earned
or Paid
in Cash
($)
|
|
Stock
Awards(1)
($)
|
|
All Other
Compensation
(2)($)
|
|
Total
($)
|
||||
Joe Bress
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stephen Ensley
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Maria Teresa Hilado
|
|
100,000
|
|
|
75,000
|
|
|
11,828
|
|
|
186,828
|
|
Colin Hill
|
|
100,000
|
|
|
75,000
|
|
|
13,096
|
|
|
188,096
|
|
Jeffrey B. Kindler
|
|
100,000
|
|
|
75,000
|
|
|
14,250
|
|
|
189,250
|
|
P. Hunter Philbrick
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Allen R. Thorpe
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stephen H. Wise
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Amounts reported represent the grant date fair value of the restricted stock awards granted to the Non-Employee Directors in 2019 determined in accordance with ASC Topic 718. As of December 31, 2019, the aggregate number of outstanding unvested shares of restricted stock held by each Non-Employee Director was 3,117 shares.
|
(2)
|
Amounts reported reflect the cash dividend amounts paid on the unvested shares of restricted stock held by each of the Non-Employee Directors in connection with each of the May 2019 Dividend and the November 2019 Dividend.
|
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||
Plan category
|
|
(a)
|
|
(b)
|
|
(c)
|
|||
Equity compensation plan approved by security holders (1)
|
|
20,302,725
|
|
|
14.10
|
|
|
3,211,535
|
|
Equity compensation plans not approved by security holders (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
20,302,725
|
|
|
14.10
|
|
|
3,211,535
|
|
•
|
each person known by us to beneficially own more than 5% of our outstanding shares of common stock;
|
•
|
each of our directors;
|
•
|
each of our named executive officers; and
|
•
|
our directors and executive officers as a group.
|
|
|
Common Stock
Beneficially Owned
|
||||
Name of Beneficial Owner
|
|
Shares
|
|
Percentage
|
||
5% Stockholders:
|
|
|
|
|
||
H&F Investors(1)
|
|
158,426,641
|
|
|
45.4
|
%
|
Carlyle Investor(2)
|
|
66,454,994
|
|
|
19.1
|
|
ADIA Investor(3)
|
|
25,585,173
|
|
|
7.3
|
|
GIC Investor(4)
|
|
25,585,173
|
|
|
7.3
|
|
Directors and Named Executive Officers:
|
|
|
|
|
||
David Simmons(5)
|
|
3,039,408
|
|
|
*
|
|
Joe Bress(6)
|
|
—
|
|
|
—
|
|
Stephen Ensley(7)
|
|
—
|
|
|
—
|
|
Maria Teresa Hilado(8)
|
|
33,471
|
|
|
*
|
|
Colin Hill(9)
|
|
12,160
|
|
|
*
|
|
Jeffrey B. Kindler(10)
|
|
112,095
|
|
|
*
|
|
P. Hunter Philbrick(7)
|
|
—
|
|
|
—
|
|
Allen R. Thorpe(7)
|
|
—
|
|
|
—
|
|
Stephen H. Wise(6)
|
|
—
|
|
|
—
|
|
William J. Sharbaugh(11)
|
|
908,364
|
|
|
*
|
|
Christopher G. Scully(12)
|
|
213,031
|
|
|
*
|
|
Anshul Thakral(13)
|
|
185,773
|
|
|
*
|
|
B. Judd Hartman(14)
|
|
256,981
|
|
|
*
|
|
All directors and executive officers as a group (19 persons)(15)
|
|
5,538,353
|
|
|
1.6
|
%
|
*
|
Indicates beneficial ownership of less than 1%.
|
(1)
|
Reflects (i) 63,069,561 shares directly held by Hellman & Friedman Capital Partners VII, L.P., 24,143,479 shares directly held by Hellman & Friedman Capital Partners VII (Parallel), L.P., 4,330,024 shares directly held by HFCP VII (Parallel-A), L.P. and 428,587 shares directly held by H&F Executives VII, L.P. (collectively, the “H&F VII Funds”) and (ii) 42,483,348 shares directly held by Hellman & Friedman Capital Partners VIII, L.P., 19,066,602 shares directly held by Hellman & Friedman Capital Partners VIII (Parallel), L.P., 3,603,189 shares directly held by HFCP VIII (Parallel-A), L.P., 1,114,449 shares directly held by H&F Executives VIII, L.P. and 187,402 shares directly held by H&F Associates VIII, L.P. (collectively, the “H&F VIII Funds” and, together with the H&F VII Funds, the “H&F Investors”). Hellman & Friedman Investors VII, L.P. (“H&F Investors VII”) is the general partner of the H&F VII Funds. H&F Corporate Investors VII, Ltd. (“H&F VII”) is the general partner of H&F Investors VII. As the general partner of H&F Investors VII, H&F VII may be deemed to have beneficial ownership of the shares of common stock beneficially owned by H&F Investors VII. Hellman & Friedman Investors VIII, L.P. (“H&F Investors VIII”) is the general partner of the H&F VIII Funds. H&F Corporate Investors VIII, Ltd. (“H&F VIII”) is the general partner of H&F Investors VIII. As the general partner of H&F Investors VIII, H&F VIII may be deemed to have beneficial ownership of the shares of common stock beneficially owned by H&F Investors VIII. Voting and investment determinations with respect to shares of common stock held by H&F Investors VII and H&F Investors VIII are made by the boards of directors of H&F VII and H&F VIII, respectively. The board of directors of each of H&F VII and H&F VIII consists of Philip U. Hammarskjold, David R. Tunnell and Allen R. Thorpe. Each of the members of the boards of directors of H&F VII and H&F VIII disclaims beneficial ownership of such shares of our common stock. The address of each entity named in this footnote is c/o Hellman & Friedman LLC, 415 Mission Street, Suite 5700, San Francisco, California 94105.
|
(2)
|
Reflects shares directly held by Carlyle Partners VI Holdings II, L.P. (the “Carlyle Investor”). Carlyle Group Management L.L.C. holds an irrevocable proxy to vote a majority of the shares of The Carlyle Group Inc., which is a publicly traded entity listed on Nasdaq. The Carlyle Group Inc. is the sole member of Carlyle Holdings II GP L.L.C., which is the managing member of Carlyle Holdings II L.L.C., which, with respect to the securities reported herein, is the managing member of CG Subsidiary Holdings L.L.C., which is the general partner of TC Group Cayman Investment Holdings, L.P., which is the general partner of TC Group Cayman Investment Holdings Sub L.P., which is the sole member of TC Group VI, L.L.C., which is the general partner of TC Group VI, L.P., which is the general partner of the Carlyle Investor. Voting and investment determinations with respect to the common shares held by the Carlyle Investor are made by an investment committee of TC Group VI, L.P. comprised of Allan Holt, William Conway, Jr., Daniel D’Aniello, David Rubenstein, Peter Clare, Kewsong Lee, Norma Kuntz, Sandra Horbach and Marco De Benedetti as a non-voting observer. Accordingly, each of the foregoing entities and individuals may be deemed to share beneficial ownership of the securities held of record by Carlyle Partners VI Holdings II, L.P. Each of them disclaims beneficial ownership of such securities. The address of each of TC Group Cayman Investment
|
(3)
|
Reflects shares directly held by Blue Spectrum ZA 2015 L.P. (the “Blue Spectrum Investor”). The general partner of the Blue Spectrum Investor is Procific, a Cayman Island exempted company with limited liability and a wholly owned subsidiary of ADIA. By reason of its ownership of Procific and pursuant to the rules and regulations of the SEC, ADIA may be deemed to share investment and voting power over and, therefore, beneficial ownership of, the shares held directly by the Blue Spectrum Investor. The address for each of the Blue Spectrum Investor and Procific is c/o Collas Crill Corporate Services Limited, Willow House, Cricket Square, PO Box 709, Grand Cayman, KY1-1107, Cayman Islands. The address for ADIA is 211 Corniche Street, P.O. Box 3600, Abu Dhabi, United Arab Emirates.
|
(4)
|
Reflects shares directly held by Clocktower Investment Pte Ltd. (the “GIC Investor”). The GIC Investor shares the power to vote and the power to dispose of these shares with GIC Special Investments Pte. Ltd. (“GIC SI”), and GIC, both of which are private limited companies incorporated in Singapore. GIC SI is wholly owned by GIC and is the private equity investment arm of GIC. GIC is wholly owned by the Government of Singapore and was set up with the sole purpose of managing Singapore’s foreign reserves. The Government of Singapore disclaims beneficial ownership of these shares. The business address for the GIC Investor is 168 Robinson Road, #37-01 Capital Tower, Singapore 068912.
|
(5)
|
Consists of 603,000 shares held by 2015 Simmons Family Gift Trust U/A dated June 18, 2015 of which Mr. Simmons is a Trustee, 867,759 shares held by David S. Simmons Revocable Trust dated November 13, 2009 of which Mr. Simmons is a Trustee, 1,528,649 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020, and 40,000 shares that Mr. Simmons purchased in our initial public offering as part of the directed share program.
|
(6)
|
The address of each of Messrs. Bress and Wise is c/o The Carlyle Group Inc., 1001 Pennsylvania Avenue, NW, Suite 2200 South, Washington, D.C. 20004.
|
(7)
|
The address of each of Messrs. Ensley, Philbrick and Thorpe is c/o Hellman & Friedman LLC, 415 Mission Street, Suite 5700, San Francisco, California 94105.
|
(8)
|
Consists of 22,354 shares, 3,117 restricted shares and 8,000 shares that Ms. Hilado purchased in our initial public offering as part of the directed share program.
|
(9)
|
Consists of 9,043 shares and 3,117 restricted shares.
|
(10)
|
Consists of 90,478 shares, 3,117 restricted shares and 18,500 shares that Mr. Kindler purchased in our initial public offering as part of the directed share program.
|
(11)
|
Consists of 90,000 shares held by William J. Sharbaugh, III 2020 Grantor Retained Annuity Trust u/a 01/15/2020 of which Mr. Sharbaugh is a Trustee, 332,485 shares held by William J. Sharbaugh, and includes 455,879 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020 and 30,000 shares that Mr. Sharbaugh purchased in our initial public offering as part of the directed share program.
|
(12)
|
Includes 187,031 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020 and 26,000 shares that Mr. Scully purchased in our initial public offering as part of the directed share program.
|
(13)
|
Includes 151,547 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020.
|
(14)
|
Includes 162,815 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020.
|
(15)
|
Consists of 3,088,081 shares issuable upon the exercise of options exercisable within 60 days following February 27, 2020, 9,351 restricted shares, 2,310,521 shares held by our current executive officers and directors, and 130,400 shares purchased in our initial public offering as part of the directed share program.
|
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Fee category:
|
|
|
|
||||
Audit fees(1)
|
$
|
4,610
|
|
|
$
|
2,221
|
|
Audit-related fees(2)
|
1,376
|
|
|
—
|
|
||
Tax fees(3)
|
26
|
|
|
201
|
|
||
All other fees(4)
|
4
|
|
|
5
|
|
||
Total fees
|
$
|
6,016
|
|
|
$
|
2,427
|
|
(1)
|
Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered by Deloitte & Touche LLP for (1) the reviews and audit of our quarterly and annual financial statements, respectively, (2) statutory audits services and (3) consultation on accounting and reporting matters related to the audit and audit services. In 2019, audit fees also includes fees associated with the IPO.
|
(2)
|
Includes the aggregate fees recognized in 2019 for professional services rendered by Deloitte & Touche LLP for (1) work performed in connection with SEC filings related to registration statements, (2) comfort letters issued to underwriters and (3) internal control advisory services outside the scope of the annual audit.
|
(3)
|
Includes the aggregate fees recognized in each of the last two fiscal years for professional services rendered by Deloitte & Touche LLP for tax compliance, tax advice and/or tax planning.
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(4)
|
Includes the aggregate fees recognized in each of the last two fiscal years for products and services provided by Deloitte & Touche LLP, other than those services described above, primarily related to the annual subscription fee for the Deloitte & Touche LLP accounting research tool.
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(1) Financial Statements
|
|
|
|
The following financial statements and supplementary data are included in Item 8 of this Annual Report on Form 10-K:
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Page
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
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Consolidated Balance Sheets as of December 31, 2019 and 2018
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Consolidated Statements of Stockholders’ Deficit and Redeemable Noncontrolling Interest for the years ended December 31, 2019, 2018 and 2017
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Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
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Notes to the Consolidated Financial Statements
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(2) Financial Statements Schedules
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Schedule I – Condensed Financial Information of Registrant (Parent Company only)
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All other schedules are omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.
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(3) Exhibits required by Item 601 of Regulation S-K.
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The exhibits listed in the accompanying Exhibit Index are filed or furnished as a part of this report and are incorporated herein by reference.
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Exhibit
Number
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Description
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3.1
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3.2
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4.1
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4.2
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4.3
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4.4
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4.5†
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10.1
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10.2*
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10.3*
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10.4*
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10.5*
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10.6*
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Exhibit
Number
|
|
Description
|
10.7
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|
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10.8
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10.9
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10.10
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10.11
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10.12
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10.13
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10.14
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10.15
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10.16*
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10.17*
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Exhibit
Number
|
|
Description
|
10.18*
|
|
|
|
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|
10.19*
|
|
|
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10.20*
|
|
|
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10.21*
|
|
|
|
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10.22*
|
|
|
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10.23*
|
|
|
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10.24*
|
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|
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10.25*
|
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|
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10.26*
|
|
|
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10.27*
|
|
|
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10.28*
|
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10.29*
|
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10.30*
|
|
|
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Exhibit
Number
|
|
Description
|
10.31*
|
|
|
|
|
|
10.32*
|
|
|
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10.33*
|
|
|
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10.34*
|
|
|
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10.35*
|
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|
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10.36*
|
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|
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10.37*
|
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10.38*
|
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10.39*
|
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10.40*
|
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10.41*
|
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10.42*
|
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21.1
|
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23.1†
|
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31.1†
|
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31.2†
|
|
Exhibit
Number
|
|
Description
|
|
|
|
32.1††
|
|
|
|
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|
32.2††
|
|
†
|
Filed herewith.
|
††
|
Furnished herewith. The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of PPD, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
|
*
|
Management contract or compensatory plan or arrangement.
|
PPD, Inc.
|
|
|
|
By:
|
/s/ David Simmons
|
Name:
|
David Simmons
|
Title:
|
Chief Executive Officer and Chairman
|
Signature
|
Title
|
|
|
/s/ David Simmons
|
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
David Simmons
|
|
|
|
/s/ Christopher G. Scully
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Christopher G. Scully
|
|
|
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/s/ Glen Donovan
|
Chief Accounting Officer
(Principal Accounting Officer)
|
Glen Donovan
|
|
|
|
/s/ Joe Bress
|
Director
|
Joe Bress
|
|
|
|
/s/ Stephen Ensley
|
Director
|
Stephen Ensley
|
|
|
|
/s/ Maria Teresa Hilado
|
Director
|
Maria Teresa Hilado
|
|
|
|
/s/ Colin Hill
|
Director
|
Colin Hill
|
|
|
|
/s/ Jeffrey B. Kindler
|
Director
|
Jeffrey B. Kindler
|
|
|
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/s/ P. Hunter Philbrick
|
Director
|
P. Hunter Philbrick
|
|
|
|
/s/ Allen R. Thorpe
|
Director
|
Allen R. Thorpe
|
|
|
|
/s/ Stephen H. Wise
|
Director
|
Stephen H. Wise
|
•
|
prior to such time, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares;
|
•
|
at or subsequent to that time, the business combination is approved by our board of directors and by the affirmative vote of holders of at least 66 2/3% of our outstanding voting stock that is not owned by the interested stockholder; or
|
•
|
the stockholder became an interested stockholder inadvertently and (i) as soon as practicable divested itself of sufficient ownership to cease to be an interested stockholder and (ii) had not been an interested stockholder but for the inadvertent acquisition of ownership within three years of the business combination.
|
1.
|
I have reviewed this Annual Report on Form 10-K of PPD, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date:
|
March 5, 2020
|
|
By:
|
/s/ David Simmons
|
|
|
|
|
David Simmons
|
|
|
|
|
Chief Executive Officer and Chairman
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of PPD, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date:
|
March 5, 2020
|
|
By:
|
/s/ Christopher G. Scully
|
|
|
|
|
Christopher G. Scully
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
Date:
|
March 5, 2020
|
|
By:
|
/s/ David Simmons
|
|
|
|
|
David Simmons
|
|
|
|
|
Chief Executive Officer and Chairman
|
|
|
|
|
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
Date:
|
March 5, 2020
|
|
By:
|
/s/ Christopher G. Scully
|
|
|
|
|
Christopher G. Scully
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|