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a51096797.htm

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 under

the Securities Exchange Act of 1934

For

the month ended May, 2015

ICON plc

(Registrant's name)

333-08704

(Commission file number)

South County Business Park, Leopardstown, Dublin 18, Ireland

(Address of principal executive offices)

Brendan Brennan, CFO

South County Business Park, Leopardstown, Dublin 18, Ireland.

Brendan.Brennan@iconplc.com

011-353-1-291-2000

(Name, telephone number, email and/or facsimile number and address of Company contact person)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
	Yes___X___	No_______

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
	Yes______	No___X___

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
	Yes______	No___X___

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under the Securities Exchange Act of 1934.
	Yes______	No___X___

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82 N/A

ICON plc

Rider A

This report on Form 6-K is hereby incorporated by reference in the registration statement on Form F-3 (Registration No. 333-133371) of ICON plc and in the prospectus contained therein, and this report on Form 6-K shall be deemed a part of such registration statement from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished by ICON plc under the Securities Act of 1933 or the Securities Exchange Act of 1934.

GENERAL

As used herein, “ICON”, the “Company” and “we” refer to ICON plc and its consolidated subsidiaries, unless the context requires otherwise.

Business

ICON public limited company (“ICON”) is a contract research organization (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. We specialize in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. Our vision is to be the Global CRO partner of choice for the Biopharma industry by delivering best in class information, solutions and performance in clinical and outcomes research.

We believe that we are one of a select group of CRO’s with the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and have the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. At March 31, 2015 we had approximately 11,200 employees, in 81 locations in 38 countries. During the three months ended March 31, 2015 we derived approximately 38.7%, 51.0% and 10.3% of our net revenue in the United States, Europe and Rest of World, respectively.

We began operations in 1990 and have expanded our business predominately through organic growth, together with a number of strategic acquisitions to enhance our capabilities and expertise in certain areas of the clinical development process. We are incorporated in Ireland and our principal executive office is located at: South County Business Park, Leopardstown, Dublin 18, Republic of Ireland. The contact telephone number of this office is 353 (1) 291 2000.

Recent Developments

Acquisitions

On February 27, 2015 the Company acquired MediMedia Pharma Solutions for a total cash consideration of $120.0 million. Headquartered in Yardley, Pennsylvania, MediMedia Pharma Solutions includes MediMedia Managed Markets and Complete Healthcare Communications. MediMedia Managed Markets is a leading provider of strategic payer-validated market access solutions. Complete Healthcare Communications is one of the leading medical and scientific communication agencies working with medical affairs, commercial and brand development teams within life science companies. (see note 3 Business Combinations for further information).

ICON plc

CONDENSED CONSOLIDATED BALANCE SHEETS

AS AT MARCH 31, 2015 AND DECEMBER 31, 2014

	(Unaudited)			(Audited)
	March 31,			December 31,
	2015			2014
ASSETS	(in thousands)
Current Assets:
Cash and cash equivalents	$	95,241		$	118,900
Short term investments - available for sale		96,434			97,100
Accounts receivable, net		361,780			370,956
Unbilled revenue		156,595			146,163
Other receivables		19,813			17,491
Deferred tax asset		35,092			24,716
Prepayments and other current assets		30,628			28,465
Income taxes receivable		16,009			15,716
Total current assets		811,592			819,507
Other Assets:
Property, plant and equipment, net		141,552			148,185
Goodwill		571,523			463,324
Non-current other assets		12,833			11,583
Non-current income taxes receivable		13,022			15,060
Non-current deferred tax asset		9,792			21,472
Intangible assets		44,587			49,719
Total Assets	$	1,604,901		$	1,528,850
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	3,859		$	2,793
Payments on account		253,043			280,097
Other liabilities		273,902			251,091
Bank credit lines and loan facilities		20,000			-
Deferred tax liability		234			229
Income taxes payable		7,506			4,149
Total current liabilities		558,544			538,359
Other Liabilities:
Non-current other liabilities		15,389			13,179
Non-current government grants		993			1,116
Non-current income taxes payable		12,895			12,389
Non-current deferred tax liability		17,811			13,601
Shareholders' Equity:
Ordinary shares, par value 6 euro cents per share; 100,000,000 shares authorized,
60,580,540 shares issued and outstanding at March 31, 2015 and
60,106,780 shares issued and outstanding at December 31, 2014		5,059			5,037
Additional paid-in capital		343,320			327,234
Capital redemption reserve		305			305
Accumulated other comprehensive income		(60,469	)		(37,555	)
Retained earnings		711,054			655,185
Total Shareholders' Equity		999,269			950,206
Total Liabilities and Shareholders' Equity	$	1,604,901		$	1,528,850

The accompanying notes are an integral part of these condensed consolidated financial statements.

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND MARCH 31, 2014

(UNAUDITED)

	Three Months Ended
	March 31,			March 31,
	2015			2014


Revenue:
Gross revenue	$	503,366		$	476,544
Reimbursable expenses		(115,135	)		(126,910	)

Net revenue		388,231			349,634

Costs and expenses:
Direct costs		228,078			216,140
Selling, general and administrative expense		79,555			78,948
Depreciation and amortization		13,925			11,548

Total costs and expenses		321,558			306,636

Income from operations		66,673			42,998
Interest income		276			348
Interest expense		(279	)		(257	)

Income before provision for income taxes		66,670			43,089
Provision for income taxes		(10,801	)		(6,894	)

Net income	$	55,869		$	36,195

Net income per Ordinary Share:

Basic	$	0.93		$	0.59

Diluted	$	0.90		$	0.57

Weighted average number of Ordinary Shares outstanding:

Basic		60,281,059			61,776,643

Diluted		61,856,347			63,225,797

The accompanying notes are an integral part of these condensed consolidated financial statements.

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND MARCH 31, 2014

(UNAUDITED)

	Three Months Ended
	March 31,			March 31,
	2015			2014
	(in thousands)
Cash flows from operating activities:
Net income	$	55,869		$	36,195
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of property, plant and equipment		4			31
Depreciation expense		9,907			9,682
Amortization of intangibles		4,018			1,866
Amortization of grants		(11	)		(80	)
Share compensation expense		6,043			4,045
Deferred taxes		(173	)		(4,868	)
Changes in assets and liabilities:
Decrease in accounts receivable		16,381			4,958
Increase in unbilled revenue		(11,716	)		(3,573	)
(Increase)/ decrease in other receivables		(2,699	)		1,199
Increase in prepayments and other current assets		(2,522	)		(5,304	)
Increase in other non current assets		(1,254	)		(643	)
Decrease in payments on account		(31,093	)		(27,567	)
Increase in other current liabilities		13,462			20,983
Increase in other non-current liabilities		1,757			58
Increase/(decrease) in income taxes payable		2,734			(492	)
Increase in accounts payable		406			2,170
Net cash provided by operating activities		61,113			38,660

Cash flows from investing activities:
Purchase of property, plant and equipment		(10,688	)		(6,163	)
Purchase of subsidiary undertakings		(103,138	)		-
Purchase of short term investments		(60	)		(38,988	)
Sale of short term investments		1,037			50,530
Net cash (used in)/provided by investing activities		(112,849	)		5,379

Cash flows from financing activities:
Proceeds from exercise of share options		8,146			9,825
Share issuance costs		(4	)		(4	)
Tax benefit from the exercise of share options		1,923			726
Drawdown of bank credit lines and loan facilities		20,000			-
Net cash provided by financing activities		30,065			10,547
Effect of exchange rate movements on cash		(1,988	)		(449	)
Net (decrease)/increase in cash and cash equivalents		(23,659	)		54,137
Cash and cash equivalents at beginning of period		118,900			182,519

Cash and cash equivalents at end of period	$	95,241		$	236,656
The accompanying notes are an integral part of these condensed consolidated financial statements.

ICON plc

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME

(UNAUDITED)

	Shares		Amount		Additional Paid-in Capital			Capital Redemption Reserve		Accumulated Other Comprehensive Income			Retained Earnings		Total

	(dollars in thousands, except share data)

Balance at December 31, 2014		60,106,780	$	5,037	$	327,234		$	305	$	(37,555	)	$	655,185	$	950,206

Comprehensive Income:
Net income		-		-		-			-		-			55,869		55,869
Currency translation adjustment		-		-		-			-		(31,789	)		-		(31,789	)
Currency impact of long term funding		-		-		-			-		8,978			-		8,978
Tax on currency impact of long term funding		-		-		-			-		(415	)		-		(415	)
Unrealized capital gain - investments		-		-		-			-		312			-		312

Total comprehensive income		-		-		-			-		(22,914	)		55,869		32,955
Exercise of share options		317,777		22		8,114			-		-			-		8,136
Issue of restricted share units		155,983		-		10			-		-			-		10
Share issuance costs		-		-		(4	)		-		-			-		(4	)
Non-cash stock compensation expense		-		-		6,043			-		-			-		6,043
Tax benefit on exercise of options		-		-		1,923			-		-			-		1,923

Balance at March 31, 2015		60,580,540	$	5,059	$	343,320		$	305	$	(60,469	)	$	711,054	$	999,269

The accompanying notes are an integral part of these condensed consolidated financial statements.

ICON plc

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

March 31, 2015

1. Basis of Presentation

These condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”), have not been audited. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the condensed consolidated financial statements. Actual results could differ from those estimates.

The condensed consolidated financial statements should be read in conjunction with the accounting policies and notes to the consolidated financial statements included in ICON’s Form 20-F for the year ended December 31, 2014. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the fiscal period ending December 31, 2015.

2. Goodwill

	Three months ended				Year ended
		March 31,			December 31,
		2015			2014
		(in thousands)

Opening balance		$	463,324		$	357,523
Current period acquisitions (Note 3)			115,037			121,209
Prior Period acquisitions			4,418			-
Foreign exchange movement			(11,256	)		(15,408	)

Closing balance		$	571,523		$	463,324

3. Business Combinations

Acquisitions - MediMedia Pharma Solutions.

On February 27, 2015 the Company acquired MediMedia Pharma Solutions for a total cash consideration of $120.0 million including certain payments to be made on behalf of the company on completion totalling $14.9 million. Headquartered in Yardley, Pennsylvania, MediMedia Pharma Solutions includes MediMedia Managed Markets and Complete Healthcare Communications. MediMedia Managed Markets is a leading provider of strategic payer-validated market access solutions. Complete Healthcare Communications is one of the leading medical and scientific communication agencies working with medical affairs, commercial and brand development teams within life science companies. The acquisition agreement also provides for certain working capital targets to be achieved by MediMedia Pharma Solutions on acquisition. The Company has withheld a provisional amount of $3.3 million pending completion of this review.

The acquisition of MediMedia Pharma Solutions has been accounted for as a business combination in accordance with FASB ASC 805 Business Combinations. The following table summarizes the Company’s provisional estimates of the fair values of the assets acquired and liabilities assumed:

	February 27
	2015
	(in thousands)
Property, plant and equipment	$	829
Goodwill*		115,037
Accounts receivable		9,955
Prepayments and other current assets		621
Accounts payable		(749	)
Payments on account		(4,186	)
Other liabilities		(16,405	)

Net assets acquired	$	105,102

Cash consideration	$	120,000
Adjustments to cash consideration **		(11,574	)
Working capital adjustment		(3,324	)
Net purchase consideration	$	105,102

*Goodwill represents the acquisition of an established workforce with experience in the provision of strategic payer-validated market access solutions while the acquisition of Complete Healthcare Communications comprises an established workforce with significant communication experience working with medical affairs, commercial and brand development teams within the life science industry.

** Adjustments to cash consideration represents certain one-time liabilities at the acquisition date which have subsequently been repaid.

Prior Period Acquisitions – Aptiv Solutions

On May 7, 2014 the Company acquired 100% of the common stock of Aptiv Solutions (“Aptiv”), a global biopharmaceutical and medical device development services company and leader in adaptive clinical trials for a cash consideration of $143.5 million including certain payments to be made on behalf of the company on completion totalling $22.4 million. Aptiv offers full-service clinical trial consulting and regulatory support for drugs, medical devices and diagnostics with a specific focus on strategy to increase product development efficiency and productivity. It is a market leader in the integrated design and execution of adaptive clinical trials for exploratory and late phase development as well as being an industry leader in medical device and diagnostic development in key medical technology segments. The acquisition agreement also provided for certain working capital targets to be achieved by Aptiv on completion. On March 25, 2015 the Company received $1.9 million on completion of this review.

The acquisition of Aptiv Solutions has been accounted for as a business combination in accordance with FASB ASC 805 Business Combinations. The following table summarizes the preliminary estimated fair values of the assets acquired and the liabilities assumed:

	May 7
	2014
	(in thousands)
Property, plant and equipment	$	6,924
Goodwill*		125,627
Intangible asset – customer relationships		21,400
Intangible asset – order backlog		7,900
Cash and cash equivalents		3,484
Accounts receivable		25,091
Unbilled revenue		21,154
Prepayments and other current assets		4,180
Non-current assets		2,911
Accounts payable		(9,565	)
Other liabilities		(29,782	)
Payments on account		(31,094	)
Non-current other liabilities		(11,303	)
Loan notes payable **		(17,790	)

Net assets acquired	$	119,137

Cash consideration	$	143,500
Adjustments to cash consideration***		(22,399	)
Working capital adjustment		(1,964	)
Net purchase consideration	$	119,137

* Goodwill represents the acquisition of an established workforce with experience in clinical trial consulting and regulatory support for the development of drugs, medical devices and diagnostics, with a specific focus on strategy to increase efficiency and productivity in product development. Goodwill related to the US portion of the business acquired is tax deductible.

** Adjustments to cash consideration represent certain one-time liabilities (including loan notes) identified at the acquisition date which have subsequently been repaid.

4. Restructuring and other items

Prior Period Restructuring Charges- 2014 Restructuring Provisions

A restructuring charge of $8.8 million was recognized during the year ended December 31, 2014. Following the closure of the Company’s European Phase 1 services in 2013, the Company recognized a charge in 2014 in relation to its Manchester, United Kingdom facility; $5.6 million in relation to asset impairments and $3.2 million in relation to an onerous lease charge associated with this facility. We expect this to be paid by 2024.

	Onerous			Asset
	Lease			Impairment			Total
	(in thousands)

Total provision recognized	$	3,167		$	5,629		$	8,796
Asset write-off		-			(5,629	)		(5,629	)
Cash payments		(444	)		-			(444	)
Foreign exchange movement		(170	)		-			(170	)

Provision at March 31, 2015	$	2,553		$	-		$	2,553

Cash payments of $444,000 were paid in respect of the onerous lease during the three months ended March 31, 2015.

Prior Period Restructuring Charges – 2013 Restructuring Provisions

Restructuring and other items of $9.0 million were recorded during the year ended December 31, 2013. During Q1 and Q2 2013 the Company conducted a review of its operations. This review resulted in the adoption of an initial restructuring plan, which included the closure of its Phase I facility in Omaha, Nebraska. This followed the expansion of the Company’s Phase I facility in San Antonio, Texas and the consolidation of the Company’s US Phase I capabilities in this location. The restructuring plan also included resource rationalizations in certain areas of the business to improve resource utilization. Details of the movement in this restructuring plan recognized are as follows:

	Workforce			Office
	Reductions			Consolidations			Total
	(in thousands)
Q1 Plan - Initial provision recognized	$	3,903		$	509		$	4,412
Q2 Plan - Initial provision recognized		4,228			393			4,621
Total provision recognized		8,131			902			9,033
Cash payments		(7,934	)		(579	)		(8,513	)
Amounts released		(93	)		-			(93	)
Foreign exchange movement		(3	)		-			(3	)

Provision at March 31, 2015	$	100		$	323		$	423

Cash payments of $114,000 (workforce reductions $71,000; office consolidations $43,000) were paid during the three months ended March 31, 2015.

5. Income Taxes

Income taxes recognized during the three and three months ended March 31, 2015 comprise:

	Three Months Ended
	March 31,		March 31,
	2015		2014
	(In thousands)


Provision for income taxes	$	10,801	$	6,894

As at March 31, 2015 the Company maintains a $27.6 million liability (December 31, 2014: $25.6 million) for unrecognized tax benefit, which is comprised of $25.1 million (December 31, 2014: $23.2 million) related to items generating unrecognized tax benefits and $2.4 million (December 31, 2014: $2.4 million) for interest and related penalties to such items. The Company recognizes interest accrued on unrecognized tax benefits as an additional income tax expense.

The Company has analyzed filing positions in all of the significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. The only periods subject to examination by the major tax jurisdictions where the Company does business are 2009 through 2014 tax years. The Company does not believe that the outcome of any examination will have a material impact on its financial statements.

6. Net income per ordinary share

Basic net income per ordinary share has been computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per ordinary share is computed by adjusting the weighted average number of ordinary shares outstanding during the period for all potentially dilutive ordinary shares outstanding during the period and adjusting net income for any changes in income or loss that would result from the conversion of such potential ordinary shares. There is no difference in net income used for basic and diluted net income per ordinary share.

The reconciliation of the number of shares used in the computation of basic and diluted net income per ordinary share is as follows:

	Three Months Ended
	March 31,		March 31,
	2015		2014

Weighted average number of ordinary shares outstanding for basic net income per ordinary share		60,281,059		61,776,643
Effect of dilutive share options outstanding		1,575,288		1,449,154
Weighted average number of ordinary shares for diluted net income per ordinary share		61,856,347		63,225,797

7. Share-based Awards

Share Options

On July 21, 2008 the Company adopted the Employee Share Option Plan 2008 (the “2008 Employee Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any employee, or any director holding a salaried office or employment with the Company or a Subsidiary for the purchase of ordinary shares. On the same date, the Company also adopted the Consultants Share Option Plan 2008 (the “2008 Consultants Plan”), pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may grant options to any consultant, adviser or non-executive director retained by the Company or any Subsidiary for the purchase of ordinary shares.

Each option granted under the 2008 Employee Plan or the 2008 Consultants Plan (together the “2008 Option Plans”) will be an employee stock option, or NSO, as described in Section 422 or 423 of the Internal Revenue Code. Each grant of an option under the 2008 Options Plans will be evidenced by a Stock Option Agreement between the optionee and the Company. The exercise price will be specified in each Stock Option Agreement, however option prices will not be less than 100% of the fair market value of an ordinary share on the date the option is granted.

An aggregate of 6.0 million ordinary shares have been reserved under the 2008 Employee Plan, as reduced by any shares issued or to be issued pursuant to options granted under the 2008 Consultants Plan, under which a limit of 400,000 shares applies. Further, the maximum number of ordinary shares with respect to which options may be granted under the 2008 Employee Option Plan, during any calendar year to any employee shall be 400,000 ordinary shares. There is no individual limit under the 2008 Consultants Plan. No options may be granted under the 2008 Option Plans after July 21, 2018.

On January 17, 2003 the Company adopted the Share Option Plan 2003 (the “2003 Share Option Plan”) pursuant to which the Compensation and Organization Committee of the Board could grant options to officers and other employees of the Company or its subsidiaries for the purchase of ordinary shares. An aggregate of 6.0 million ordinary shares were reserved under the 2003 Share Option Plan; and, in no event could the number of ordinary shares issued pursuant to options awarded under this plan exceed 10% of the outstanding shares, as defined in the 2003 Share Option Plan, at the time of the grant, unless the Board expressly determined otherwise. Further, the maximum number of ordinary shares with respect to which options could be granted under the 2003 Share Option Plan during any calendar year to any employee was 400,000 ordinary shares. The 2003 Share Option Plan expired on January 17, 2013. No new options may be granted under this plan.

Share option awards are granted with an exercise price equal to the market price of the Company’s shares at date of grant. Share options typically vest over a period of five years from date of grant and expire eight years from date of grant. The maximum contractual term of options outstanding at March 31, 2015 is eight years.

The following table summarizes option activity for the three months ended March 31, 2015:

	Options Outstanding Number of Shares			Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life

Outstanding at December 31, 2014		2,227,700		$	28.00	$	10.40

Granted		239,972		$	68.39	$	19.78
Exercised		(317,777	)	$	25.60	$	9.89
Forfeited		(31,637	)	$	24.06	$	9.29

Outstanding at March 31, 2015		2,118,258		$	33.00	$	11.56		4.98

Exercisable at March 31, 2015		924,768		$	25.53	$	9.80		3.42

The Company has granted options with fair values ranging from $5.88 to $19.78 per option or a weighted average fair value of $10.64 per option. The Company issues ordinary shares for all options exercised. The total amount of fully vested share options which remained outstanding at March 31, 2015, was 924,768. Fully vested share options at March 31, 2015, have an average remaining contractual term of 3.42 years, an average exercise price of $25.53 and a total intrinsic value of $41.6 million. The total intrinsic value of options exercised during the three months ended March 31, 2015 was $12.6 million (March 31, 2014: $8.9 million).

The following table summarizes the movement in non-vested share options for the three months ended March 31, 2015:

	Options Outstanding Number of Shares			Weighted Average Exercise Price			Weighted Average Fair Value

Non vested outstanding at December 31, 2014		1,203,150			$	30.54		$	10.98

Granted		239,972			$	68.39		$	19.78
Vested		(230,849	)		$	27.64		$	10.17
Forfeited		(18,783	)		$	25.86		$	10.33

Non vested outstanding at March 31, 2015		1,193,490			$	38.78		$	12.92

Fair value of Stock Options Assumptions

The weighted average fair value of options granted during the three months ended March 31, 2015 and March 31, 2014 was calculated using the Black-Scholes option pricing model. The weighted average fair values and assumptions used were as follows:

	Three Months Ended
	March 31,			March 31,
	2015			2014

Weighted average fair value	$	19.78		$	14.95

Assumptions:
Expected volatility		30	%		33	%
Dividend yield		0	%		0	%
Risk-free interest rate		1.41	%		1.54	%
Expected life	5 years			5 years

Expected volatility is based on the historical volatility of our common stock over a period equal to the expected term of the options; the expected life represents the weighted average period of time that options granted are expected to be outstanding given consideration to vesting schedules and our historical experience of past vesting and termination patterns. The risk-free rate is based on the U.S. government zero-coupon bonds yield curve in effect at time of the grant for periods corresponding with the expected life of the option.

Restricted Share Units and Performance Share Units

On July 21, 2008 the Company adopted the 2008 Employees Restricted Share Unit Plan (the “2008 RSU Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any employee, or any director holding a salaried office or employment with the Company, or a Subsidiary to receive an award under the plan. An aggregate of 1.0 million ordinary shares have been reserved for issuance under the 2008 RSU Plan.

On April 23, 2013 the Company adopted the 2013 Employees Restricted Share Unit Plan (the “2013 RSU Plan”) pursuant to which the Compensation and Organization Committee of the Company’s Board of Directors may select any employee, or any director holding a salaried office or employment with the Company, or a Subsidiary to receive Restricted Share Units (“RSUs”) and/or Performance Share Units (“PSUs”) under the plan. An aggregate of 1.6 million ordinary shares have been reserved for issuance under the 2013 RSU Plan. The shares are awarded at zero cost and vest over a service period. Awards under the 2013 RSU Plan may be settled in cash or shares at the option of the Company.

The Company has awarded RSUs and PSUs to certain key individuals of the Group. The following table summarizes RSU and PSU activity for the three months ended March 31, 2014:

	PSU Outstanding Number of Shares			PSU Weighted Average Fair Value		PSU Weighted Average Remaining Contractual Life		RSU Outstanding Number of Shares			RSU Weighted Average Fair Value		RSU Weighted Average Remaining Contractual Life

Outstanding at December 31, 2014		669,171		$	39.78		1.77		1,038,996		$	35.19		1.67

Granted		231,284		$	68.39				75,412		$	68.39
Shares vested		-			-				(155,983	)	$	21.75
Forfeited		(3,981	)	$	31.49				(23,608	)	$	39.12

Outstanding at March 31, 2015		896,474		$	47.21		1.90		934,817		$	40.01		1.78

The fair value of RSUs vested for the three months ended March 31, 2015 totaled $3.4 million (full year 2014: $4.9 million).

No PSUs vested during either the first three months of 2015 or the full year 2014.

The PSUs vest based on service and specified EPS targets over the period 2013 – 2016, 2014 – 2017 and 2015 - 2018. Since 2013, we granted 449,399 PSUs (net of forfeitures). Depending on the actual amount of EPS from 2013 to 2018, up to an additional 447,075 PSUs may also be granted.

Non-cash stock compensation expense

Non-cash stock compensation expense for the three months ended March 31, 2015 has been allocated as follows:

	Three Months Ended
	March 31,		March 31,
	2015		2014
	(In thousands)
Direct costs	$	3,330	$	2,229
Selling, general and administrative		2,713		1,816

	$	6,043	$	4,045

Total non-cash stock compensation expense not yet recognized at March 31, 2015 amounted to $69.3 million. The weighted average period over which this is expected to be recognized is 2.5 years. Total tax benefit recognized in additional paid in capital related to the non-cash compensation expense amounted to $1.9 million for the three months ended March 31, 2015 (March 31, 2014: $0.7 million).

8. Business Segment Information

The Company determines and presents operating segments based on the information that is internally provided to the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, who together are considered the Company’s chief operating decision makers, in accordance with FASB ASC 280-10 Disclosures about Segments of an Enterprise and Related Information.

The Company is a contract research organization (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. It specializes in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. The Company has the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and has the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. The Company has expanded predominately through internal growth, together with a number of strategic acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process.

The Company is generally awarded projects based upon responses to requests for proposals received from companies in the pharmaceutical, biotechnology and medical device industries or work orders executed under our strategic partnership arrangements. Contracts with customer are generally entered into centrally, in most cases with ICON Clinical Research Limited (“ICON Ireland”), the Company’s principal operating subsidiary in Ireland. Revenues, which consist primarily of fees earned under these contracts, are allocated to individual entities within the Group, based on where the work is performed in accordance with the Company’s global transfer pricing model.

ICON Ireland acts as the group entrepreneur under the Company’s global transfer pricing model given its role in the development and management of the group, it’s ownership of key intellectual property and customer relationships, its key role in the mitigation of risks faced by the group and its responsibility for maintaining the Company’s global network. As such it enters into the majority of the Company’s customer contracts.

ICON Ireland remunerates other operating entities in the ICON Group on the basis of a guaranteed cost plus mark up for the services they perform in each of their local territories. The cost plus mark up for each ICON entity is established to ensure that each of ICON Ireland and the ICON entities that are involved in the conduct of services for customers, earn an appropriate arms-length return having regard to the assets owned, risks borne, and functions performed by each entity from these intercompany transactions. The cost plus mark-up policy is reviewed annually to ensure that it is market appropriate.

The geographic split of revenue disclosed for each region outside Ireland is the cost plus revenue attributable to these entities. The residual revenues of the Group, once each ICON entity has been paid its respective intercompany service fee, generally fall to be retained by ICON Ireland. As such revenues and income from operations in Ireland are a function of this global transfer pricing model and comprise net revenues of the Group after deducting the cost plus revenues attributable to the activities performed outside Ireland.

The Company's areas of operation outside of Ireland include the United States, United Kingdom, France, Germany, Italy, Spain, The Netherlands, Sweden, Turkey, Poland, Czech Republic, Lithuania, Latvia, Russia, Ukraine, Hungary, Israel, Romania, Switzerland, Canada, Mexico, Brazil, Colombia, Argentina, Chile, Peru, India, China, South Korea, Japan, Thailand, Taiwan, Singapore, The Philippines, Australia, New Zealand, and South Africa.

Segment information as at March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and March 31, 2014 is as follows:

a) The distribution of net revenue by geographical area was as follows:

	Three Months Ended
	March 31,		March 31,
	2015		2014
	(in thousands)
Ireland	$	114,090	$	85,361
Rest of Europe		84,088		86,401
U.S.		150,064		141,679
Rest of World		39,989		36,193

Total	$	388,231	$	349,634

* All sales shown for Ireland are export sales.

b) The distribution of income from operations by geographical area was as follows:

	Three Months Ended
	March 31,		March 31,
	2015		2014
	(in thousands)
Ireland	$	47,566	$	28,134
Rest of Europe		6,785		6,401
U.S.		9,854		6,694
Rest of World		2,468		1,769

Total	$	66,673	$	42,998

c) The distribution of property, plant and equipment, net, by geographical area was as follows:

	March 31,		December 31,
	2015		2014
	(in thousands)
Ireland	$	90,481	$	95,574
Rest of Europe		8,822		10,419
U.S.		34,239		33,978
Rest of World		8,010		8,214

Total	$	141,552	$	148,185

d) The distribution of depreciation and amortization by geographical area was as follows:

	Three Months Ended
	March 31,		March 31,
	2015		2014
	(in thousands)
Ireland	$	4,913	$	5,149
Rest of Europe		2,268		1,323
U.S.		5,718		4,203
Rest of World		1,026		873

Total	$	13,925	$	11,548

e) The distribution of total assets by geographical area was as follows:

	March 31,		December 31,
	2015		2014
	(in thousands)
Ireland	$	491,413	$	495,747
Rest of Europe		310,481		324,086
U.S.		747,641		648,559
Rest of World		55,366		60,458

Total	$	1,604,901	$	1,528,850

ICON plc

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes included elsewhere herein and the Consolidated Financial Statements and related notes thereto included in our Form 20-F for the year ended December 31, 2014. The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States.

Overview

We are a contract research organization (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. We specialize in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. Our vision is to be the Global CRO partner of choice in drug development by delivering best in class information, solutions and performance in clinical and outcomes research.

We believe that we are one of a select group of CRO’s with the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and have the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. At March 31, 2015, we employed approximately 11,200 employees, in 81 locations in 38 countries. During the three months ended March 31, 2015 we derived approximately 38.7%, 51.0% and 10.3% of our net revenue in the United States, Europe and Rest of World, respectively.

Revenue consists primarily of fees earned under contracts with third-party clients. In most cases, a portion of the contract fee is paid at the time the study or trial is started, with the balance of the contract fee generally payable in installments over the study or trial duration, based on the achievement of certain performance targets or "milestones". Revenue from contracts is recognized on a proportional performance method based on the relationship between time incurred and the total estimated duration of the trial or on a fee-for-service basis according to the particular circumstances of the contract. As is customary in the CRO industry, we contract with third party investigators in connection with clinical trials. All investigator fees and certain other costs, where reimbursed by clients, are, in accordance with industry practice, deducted from gross revenue to arrive at net revenue. As these costs vary from contract to contract, we view net revenue as our primary measure of revenue growth.

As the nature of our business involves the management of projects having a typical duration of one to four years, the commencement or completion of projects in a fiscal year can have a material impact on revenues earned with the relevant clients in such years. In addition, as we typically work with some, but not all, divisions of a client, fluctuations in the number and status of available projects within such divisions can also have a material impact on revenues earned from such clients from year to year.

Termination or delay in the performance of an individual contract may occur for various reasons, including, but not limited to, unexpected or undesired results, production problems resulting in shortages of the drug, adverse patient reactions to the drug, the client’s decision to de-emphasize a particular trial or inadequate patient enrolment or investigator recruitment. In the event of termination the Company is usually entitled to all sums owed for work performed through the notice of termination and certain costs associated with the termination of the study. In addition, contracts generally contain provisions for renegotiation in the event of changes in the scope, nature, duration, or volume of services of the contract.

Our backlog consists of potential net revenue yet to be earned from projects awarded by clients. At March 31, 2015 we had a backlog of approximately $3.6 billion, compared with approximately $3.6 billion at December 31, 2014. We believe that our backlog as of any date is not necessarily a meaningful predictor of future results, due to the potential for cancellation or delay of the projects underlying the backlog, and no assurances can be given on the extent to which we will be able to realize this backlog as net revenue.

Although we are domiciled in Ireland, we report our results in U.S. dollars. As a consequence the results of our non-U.S. based operations, when translated into U.S. dollars, could be materially affected by fluctuations in exchange rates between the U.S. dollar and the currencies of those operations.

In addition to translation exposures, we are also subject to transaction exposures because the currency in which contracts are priced can be different from the currencies in which costs relating to those contracts are incurred. Our operations in the United States are not materially exposed to such currency differences as the majority of our revenues and costs are in U.S. dollars. However, outside the United States the multinational nature of our activities means that contracts are usually priced in a single currency, most often U.S. dollars or euro, while costs arise in a number of currencies, depending, among other things, on which of our offices provide staff for the contract and the location of investigator sites. Although many such contracts benefit from some degree of natural hedging, due to the matching of contract revenues and costs in the same currency, where costs are incurred in currencies other than those in which contracts are priced, fluctuations in the relative value of those currencies could have a material effect on our results of operations. We regularly review our currency exposures and usually negotiate currency fluctuation clauses in our contracts which allow for price negotiation if changes in the relative value of those currencies exceed predetermined tolerances.

As we conduct operations on a global basis, our effective tax rate has depended and will depend on the geographic distribution of our revenue and earnings among locations with varying tax rates. Our results therefore may be affected by changes in the tax rates of the various jurisdictions. In particular, as the geographic mix of our results of operations among various tax jurisdictions changes, our effective tax rate may vary significantly from period to period.

Results of Operations

Three Months Ended March 31, 2015 compared with Three Months Ended March 31, 2014

The following table sets forth for the periods indicated certain financial data as a percentage of net revenue and the percentage change in these items compared to the prior comparable period. The trends illustrated in the following table may not be indicative of future results.

	Three Months Ended
	March 31, 2015			March 31, 2014			2015 to 2014
							Percentage
	Percentage of Net Revenue						Increase/ (Decrease)

Net revenue		100.0	%		100.0	%		11.0	%

Costs and expenses:
Direct costs		58.7	%		61.8	%		5.5	%
Selling, general and administrative		20.5	%		22.6	%		0.8	%
Depreciation		2.6	%		2.8	%		2.3	%
Amortization		1.0	%		0.5	%		115.3	%


Income from operations		17.2	%		12.3	%		55.1	%

Net revenue for the period increased by $38.6 million, or 11.0%, from $349.6 million for the three months ended March 31, 2014 to $388.2 million for the three months ended March 31, 2015. For the three months ended March 31, 2015 we derived approximately 38.7%, 51.0% and 10.3% of our net revenue in the United States, Europe and Rest of World, respectively. During the three months ended March 31, 2015, $202.6 million or 52.2% of our net revenues were derived from our top five customers compared to $184.3 million or 52.7% of net revenues derived from our top five customers during the three months ended March 31, 2014. The increased use of strategic partnerships arrangements in recent years has resulted in a greater portion of our net revenues being derived from our top five customers. While net revenues from these customers continue to increase, we have seen a reduction in the overall proportion of Group revenues being derived from these customers as the Company continues to expand its customer base. Net revenues for the three months ended March 31, 2015 includes revenues from the acquisition of Aptiv Solutions which was acquired on May 7, 2014 together with revenues from the acquisition of MediMedia Pharma Solutions since its acquisition on February 28, 2015. This equivalent revenue was not earned during the three months ended March 31, 2014.

Net revenue in Ireland increased from $85.4 million for the three months ended March 31, 2014 to $114.1 million for the three months ended March 31, 2015. Net revenue in Ireland is principally a function of the Company’s global transfer pricing model (see note 8 Business Segmental Information for further details). Net revenue in our Rest of Europe region decreased from $86.4 million for the three months ended March 31, 2014 to $84.1 million for the three months ended March 31, 2015. Net revenues in non-U.S. dollar operations in this region were impacted by foreign currency translation and the movement in local rates to the U.S. dollar over the comparative quarter. In addition, the previous closure of the Company’s early phase operations in the United Kingdom contributed to a reduction in net revenues in this region for the three months ended March 31, 2015. Net revenues in the U.S. region for the three months ended March 31, 2015 were impacted positively by the acquisitions of Aptiv Solutions, which was acquired on May 7, 2014, and MediMedia Pharma Solutions, which was acquired on February 28, 2015. Net revenues in our Other region increased from $36.2 million for three months ended March 31, 2014 to $40.0 million for the three months ended March 31, 2015. Net revenues in this region were also positively impacted by the acquisitions of Aptiv Solutions, which was acquired on May 7, 2014.

Direct costs for the period increased by $12.0 million, or 5.5%, from $216.1 million for the three months March 31, 2014 to $228.1 million for the three months ended March 31, 2015. Direct costs consist primarily of compensation, associated fringe benefits and share based compensation expense for project-related employees and other direct project driven costs. The increase in direct costs during the period arose from an increase in headcount and a corresponding increase in personnel related expenditure of $7.8 million and an increase in other direct project related costs of $4.2 million. As a percentage of net revenue, direct costs have decreased from 61.8% for the three months ended March 31, 2014 to 58.7% for the three months ended March 31, 2015.

Selling, general and administrative expenses for the period increased by $0.6 million, or 0.8%, from $78.9 million for the three months ended March 31, 2014 to $79.5 million for the three months ended March 31, 2015. Selling, general and administrative expenses comprise primarily of compensation, related fringe benefits and share based compensation expense for non-project-related employees, recruitment expenditure, professional service costs, advertising costs and all costs related to facilities and information systems. The increase in selling, general and administration expenses for the period arose primarily from an increase in personnel related expenditure of $1.5 million, an increase in facilities and related costs expenditure of $1.1 million, and an increase in general and administrative expenses of $1.4 million. The increase in selling, general and administrative expenses are inclusive of amounts in relation to MediMedia Pharma Solutions since acquisition. In addition, during the three months ended March 31, 2015, we recognized a foreign exchange gain of $2.9 million, which reduced selling, general and administrative expenses from 21.2% of revenue to 20.5% of revenue for the three months ended March 31, 2015. As a percentage of net revenue, selling, general and administrative expenses, decreased from 22.6% for the three months ended March 31, 2014 to 20.5% for the three months ended March 31, 2015.

Depreciation expense for the period increased by $0.2 million, or 2.3%, from $9.7 million for the three months ended March 31, 2014 to $9.9 million for three months ended March 31, 2015 and principally arises from an investment in facilities, information systems and equipment to support the Company’s growth. As a percentage of net revenue, depreciation expense decreased from 2.8% of net revenues for the three months ended March 31, 2014 to 2.6% of net revenues for the three months ended March 31, 2015. Amortization expense for the period increased by $2.1 million, or 115.3%, from $1.9 million for the three months ended March 31, 2014 to $4.0 million for the three months ended March 31, 2015. Amortization expense represents the amortization of intangible assets acquired on business combinations. The increase in the amortization expense for the period relates to the Aptiv and MediMedia acquisitions. As a percentage of net revenue, amortization expense increased from 0.5% of net revenues for the three months ended March 31, 2014 to 1.0% for the three months ended March 31, 2015.

As a result of the above, income from operations for the three months increased by $23.7 million, or 55.1%, from $43.0 million for the three months ended March 31, 2014 to $66.7 million for the three months ended March 31, 2015. As a percentage of net revenue, income from operations increased from 12.3% of net revenues for the three months ended March 31, 2014 to 17.2% of net revenues for the three months ended March 31, 2015.

Income from operations in Ireland increased from a profit of $28.1 million for the three months ended March 31, 2014 to a profit of $47.6 million for the three months ended March 31, 2015. Income from operations in Ireland is impacted by the Group’s global transfer pricing model (see note 8 Business Segmental Information for further details). Income from operations in our Rest of Europe region increased from $6.4 million for the three months ended March 31, 2014 to $6.8 million for the three months ended March 31, 2015. The previous closure of the Company’s early phase operations in the United Kingdom contributed to an increase in income from operations in this region during the three months ended March 31, 2015. Income from operations in the U.S. region increased from $6.7 million for the year ended March 31, 2014 to $9.9 million for the three months ended March 31, 2015. Income from operations in the U.S. region for the three months ended March 31, 2015 were impacted positively by the acquisitions of Aptiv Solutions, which was acquired on May 7, 2014, and MediMedia Pharma Solutions, which was acquired on February 28, 2015. Income from operations in our Other region increased from $1.8 million for three months ended March 31, 2014 to $2.5 million for the three months ended March 31, 2015. Income from operations in this region was also positively impacted by the acquisitions of Aptiv Solutions, which was acquired on May 7, 2014.

Interest expense for the period remained at $0.3 million for the three months ended March 31, 2014 and the three months ended March 31, 2015. Interest income remained at $0.3 million for the three months ended March 31, 2014 and the three months ended March 31, 2015.

Provision for income taxes for the period increased from $6.9 million for the three months ended March 31, 2014 to $10.8 million for the three months ended March 31, 2015. The Company’s effective tax rate for the three months ended March 31, 2015 was 16.2% compared with 16.0% for the three months ended March 31, 2014. The Company’s effective tax rate is principally a function of the distribution of pre-tax profits amongst the territories in which it operates.

Liquidity and Capital Resources

The CRO industry is generally not capital intensive. The Group’s principal operating cash needs are payment of salaries, office rents, travel expenditures and payments to investigators. Investing activities primarily reflect capital expenditures for facilities and information systems enhancements, the purchase and sale of short term investments and acquisitions.

Our clinical research and development contracts are generally fixed price with some variable components and range in duration from a few weeks to several years. Revenue from contracts is generally recognized as income on the basis of the relationship between time incurred and the total estimated contract duration or on a fee-for-service basis. The cash flow from contracts typically consists of a small down payment at the time the contract is entered into, with the balance paid in installments over the contract's duration, in some cases on the achievement of certain milestones. Accordingly, cash receipts do not correspond to costs incurred and revenue recognized on contracts.

The Company’s cash and short term investment balances at March 31, 2015 amounted to $191.7 million compared with cash and short term investment balances of $216.0 million at December 31, 2014. The Company’s cash and short term investment balances at March 31, 2015 comprised cash and cash equivalents $95.2 million and short-term investments $96.4 million. The Company’s cash and short-term investment balances at December 31, 2014 comprised cash and cash equivalents $118.9 million and short-term investments $97.1 million. During the three months ended March 31, 2015, the Company completed the acquisition of MediMedia Pharma Solutions resulting in a cash outflow totalling $105.1 million.

On June 30, 2014 the Company entered into a five year committed multi currency revolving credit facility for $100.0 million with Citibank, JP Morgan, Santander and Barclays Bank. Each bank subject to the agreement has committed $25 million to the facility, with equal terms and conditions in place with all institutions. The facility bears interest at LIBOR plus a margin and includes certain composite guarantees, indemnities and pledges in favor of the banks. During the three months ended March 31, 2015, the company drew down $20 million of the facility. Amounts available to the Group under the facility amounted to $80.0 million at March 31, 2015. This replaced all other facilities in place at that date.

Net cash provided by operating activities was $61.1 million for the three months ended March 31, 2015 compared with cash provided by operating activities of $38.7 million for the three months ended March 31, 2014. The most significant influence on our operating cashflows has been an increase to revenues and underlying profitability of the Company. This was offset by an increase in revenue outstanding which comprises accounts receivable and unbilled revenue, less payments on account. The dollar value of these balances and the related number of days revenue outstanding (i.e. revenue outstanding as a percentage of revenue for the period, multiplied by the number of days in the period) can vary over a study or trial duration. Contract fees are generally payable in installments based on the achievement of certain performance targets or “milestones” (e.g. target patient enrollment rates, clinical testing sites initiated or case report forms completed), such milestones being specific to the terms of each individual contract, while revenues on contracts are recognized as contractual obligations are performed. Days revenue outstanding can vary therefore due to, amongst others, the scheduling of contractual milestones over a study or trial duration, the achievement of a particular milestone during the period or the timing of cash receipts from customers. A decrease in the number of days revenue outstanding during a period will result in cash inflows to the Company while an increase in days revenue outstanding will lead to cash outflows. The number of days revenue outstanding at March 31, 2015 was 47 days compared to 40 days at December 31, 2014. The number of days revenue outstanding at March 31, 2014 was 35 days compared to 32 days at December 31, 2013.

Net cash used in investing activities was $112.8 million for the three months ended March 31, 2015 compared to net cash provided by investing activities of $5.4 million for the three months ended March 31, 2014. Net cash used in the three months ended March 31, 2015 arose principally from cash paid on the purchase of MediMedia Pharma Solutions.

Capital expenditure for the three months ended March 31, 2015 amounted to $10.7 million and comprised mainly of expenditure on global infrastructure and information technology systems to support the Company’s growth. During the three months ended March 31, 2015 the Company received a net $1.0 million from the sale of short-term investments.

Net cash provided by financing activities during the three months ended March 31, 2015 amounted to $30.1 million compared with net cash provided by financing activities of $10.5 million for the three months ended March 31, 2014. During the three months ended March 31, 2015 $20.0 million was drawn down by the Company under its negotiated banking facility. In addition, $8.1 million was received by the Company from the exercise of share options. Net cash provided by financing activities during the three months ended March 31, 2014 arose primarily from the $9.8 million received from the exercise of stock options.

As a result of these cash flows, cash and cash equivalents decreased by $23.7 million for the three months ended March 31, 2015 compared to an increase of $54.1 million for the three months ended March 31, 2014.

Inflation

We believe the effects of inflation generally do not have a material adverse impact on our operations or financial condition.

Legal Proceedings

We are not party to any litigation or other legal proceedings that we believe could reasonably be expected to have a material adverse effect on our business, results of operations and financial condition.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ICON plc



		/s/ Brendan Brennan
Date: May 15, 2015		Brendan Brennan
		Chief Financial Officer