a51169665.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 August, 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
 
 
 

 
 
EXHIBIT LIST
 
Exhibit
Description
   
99.1
ICON plc Unaudited Interim Financial Statements (IFRS Single Company Financial Statements)
 
 
 

 
 
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: August 27, 2015
Brendan Brennan
 
Chief Financial Officer

a51169665ex991.htm











 
  ICON Plc
   
  Unaudited Interim Financial Statements
   
  For the Interim Period from 1 January 2015 to 31 July 2015
   
   
   
 
Registered number: 145835
 



                                          
 
                                                                                                             
 
                                                                                                             
 
 
 
                                                                                                             





 

 

 
These unaudited interim financial statements have been prepared solely to present information about the Company on a stand-alone basis for filing with the Companies Registration Office. Separately prepared statutory annual financial statements for the year ended 31 December 2014 have been prepared in accordance with Company Law and were laid before the members at an Annual General Meeting on 24th July 2015 and will be filed with the Companies Registration Office together with its 2014 Annual Return.
 
 

 
 

 
 
ICON Plc  
   
Unaudited Interim financial statements  
   
   
Contents Page
   
Directors and other information                1
   
Unaudited interim income statement 2
   
Unaudited interim statement of comprehensive income 3
   
Unaudited interim statement of financial position 4
   
Unaudited interim statement of cash flows 5
   
Unaudited interim statement of changes in equity 6 –7
   
Notes forming part of the interim financial statements 8 – 30
 
 
 

 
 
 
 
ICON Plc  
   
Directors and other information
 
   
Directors Thomas Lynch (British) 
  Ciaran Murray
  Dr. John Climax
  Dr. Ronan Lambe
  Prof. Dermot Kelleher
  Declan McKeon
  Mary Pendergast (American)
  Prof. William Hall
  Dr. Hugh Brady
   
Secretary Diarmaid Cunningham 
   
Registered office South County Business Park
  Leopardstown
  Dublin 18
   
Solicitors A & L Goodbody 
  IFSC
  25-28 North Wall Quay
  Dublin 1
   
  Cahill Gordon Reindel LLP
  80 Pine Street
  NY 10005
  USA
   
Registrars Computershare Investor Services (Ireland) Limited 
  Herron House
  Corrig Road
  Sandyford Industrial Estate
  Dublin 18
   
Bankers Citibank 
  Canada Square Canary Wharf
  London E145LB
  United Kingdom
 
 
 
1

 
 
ICON Plc

Unaudited interim income statement
for the period ended 31 July 2015
 
 
Note
   
Period ended
   
Year ended
 
       
31 July
   
31 December
 
       
2015
Unaudited
   
2014
Audited
 
        $’000     $’000  
                 
Turnover – continuing operations
2     34,958     74,409  
                 
Direct costs
3     (15,666 )   (30,925
Other operating expenses, net
4     (22,543 )   (48,201
                 
Operating loss – continuing operations
      (3,251 )   (4,717
                 
Profit on disposal of subsidiary undertaking
5     350,000     -  
                 
Financing income
6     -     141,030  
                 
Profit on ordinary activities before taxation
      346,749     136,313  
                 
Tax on profit on ordinary activities
7     (491 )   (876
                 
Profit for the interim period - equity
      346,258     135,437  

 
On behalf of the Board  
   
   
   
Declan McKeon Ciaran Murray
Director Director
 
 
 
2

 
 
 
ICON Plc

Unaudited interim statement of comprehensive income
for the period ended 31 July 2015
 
   
Period ended
   
Year ended
 
   
31 July
   
31 December
 
   
2015
Unaudited
   
2014
Audited
 
    $’000     $’000  
             
Other Comprehensive Income
           
             
Items that are or may be subsequently reclassified to the income statement:
 
             
Currency translation differences
  (54,538 )   (84,923 )
             
Other comprehensive loss for the interim period net of tax
  (54,538 )   (84,923 )
             
Profit for the interim period
  346,258     135,437  
             
Total comprehensive income for the interim period
  291,720     50,514  
             
Attributable to:
           
Equity holders of the Company
  291,720     50,514  
             
Total comprehensive income for the interim period
  291,720     50,514  


On behalf of the Board  
   
   
   
Declan McKeon Ciaran Murray
Director Director
 
 
3

 
 
ICON Plc
 
Unaudited interim statement of financial position
for the period ended 31 July 2015
 
         
Period ended
   
Year ended
 
   
Note
   
31 July
   
31 December
 
         
2015
Unaudited
   
2014
Audited
 
ASSETS
        $’000     $’000  
Non-current assets
                 
Property, plant and equipment
  9     404     614  
Intangible assets
  10     152     197  
Investment in subsidiaries
  11     400,737     468,124  
Deferred tax asset, net
  7     531     410  
                   
Total non-current assets
        401,824     469,345  
                   
Current assets
                 
Other current assets
  12     3,678     2,951  
Amounts due from subsidiary undertakings
        395,048     148,272  
Current taxes receivable
        -     151  
Cash and cash equivalents
        81,951     4,516  
                   
Total current assets
        480,677     155,890  
                   
Total assets
        882,501     625,235  
EQUITY
                 
Share capital
  13     5,008     5,037  
Share premium
  14     232,956     221,965  
Capital redemption reserve
  14     363     305  
Share based payment reserve
  14     65,103     58,614  
Other reserves
  14     6,071     6,071  
Functional currency translation reserve
  14     (113,576 )   (59,038 )
Retained earnings
  14     673,013     368,553  
                   
Attributable to equity holders
        868,938     601,507  
                   
Total equity
        868,938     601,507  
LIABILITIES
                 
                   
Current liabilities
                 
Accounts payable
        158     27  
Accrued and other liabilities
        13,076     23,701  
Current taxes payable
        329     -  
                   
Total current liabilities
        13,563     23,728  
                   
Total liabilities
        13,563     23,728  
                   
Total equity and liabilities
        882,501     625,235  

 
On behalf of the Board  
   
   
   
Declan McKeon Ciaran Murray
Director Director
 
 
 
4

 
 
ICON Plc

Unaudited interim statement of cash flows
for the period ended 31 July 2015
 
   
Period ended
   
Year ended
 
   
31 July
   
31 December
 
   
2015
Unaudited
   
2014
Audited
 
    $’000     $’000  
             
Profit for the financial period
  346,258     135,437  
Adjustments to reconcile net income to net cash generated from operating activities
           
Depreciation
  163     423  
Amortisation of intangible assets
  85     186  
Share based payment
  5,557     7,567  
Profit on disposal of subsidiary
  (350,000 )   -  
Income tax expense
  491     976  
Operating cash inflow before changes in working capital
  2,554     144,589  
(Increase)/decrease in other current assets
  (726 )   (224 )
Increase/(decrease) in accounts payable and accrued and other liabilities
  (10,479 )   263  
Increase/(decrease) in income taxes payable
  359     7  
Cash (used in)/provided by operations
  (8,292 )   144,634  
Income taxes paid
  (491 )   (976 )
Net cash (outflow)/inflow from operating activities
  (8,783 )   143,659  
Investing activities
           
Purchase of computer software
  (60 )   (106 )
Purchase of property, plant and equipment
  -     (90 )
Disposal of subsidiary undertaking
  350,000        
Increase in investment in subsidiaries
  -     (13,283 )
Net cash provided by/(used in) investing activities
  349,940     (13,479 )
Financing activities
           
Increase in amounts due from subsidiary undertakings
  (216,543 )   (10,667 )
Proceeds from exercise of share options and RSU’s
  11,024     22,274  
Share issuance costs
  (4 )   (20 )
Repurchase of ordinary shares
  (57,892 )   (140,030 )
Share repurchase costs
  (289 )   (1,032 )
Net cash used in financing activities
  (263,704 )   (129,475 )
Net increase in cash and cash equivalents
  77,453     705  
Effect of exchange rate changes
  (18 )   (22 )
Cash and cash equivalents the at start of the period
  4,516     3,833  
Cash and cash equivalents at the end of the period
  81,951     4,516  
 
 
5

 
 
ICON Plc

Unaudited interim statement of changes in equity
for the period ended  31 July 2015
 
   
 
   
 
   
 
   
Capital
   
Share Based
   
 
   
 
   
 
   
 
 
   
Number
   
Share
   
Share
    Redemption     Payment    
Other
   
Currency
   
Retained
   
Total
 
   
of shares
   
Capital
   
Premium
   
Reserve
   
Reserve
   
Reserves
   
Reserve
   
Earnings
   
Equity
 
          $’000     $’000     $’000     $’000     $’000     $’000     $’000     $’000  
                                                       
Balance at 1 January 2015
  60,106,780     5,037     221,965     305     58,614     6,071     (59,038 )   368,553     601,507  
                                                       
Total comprehensive income for the interim period:
                                                     
Profit for the interim period
  -     -     -     -     -     -     -     346,258     346,258  
Other comprehensive income
                                                     
Foreign currency translation
  -     -     -     -     -     -     (54,538 )   -     (54,538 )
                                                       
Total other comprehensive income
  -     -     -     -     -     -     (54,538 )   346,258     291,720  
                                                       
Total comprehensive income for the interim period
  -     -     -     -     -     -     (54,538 )   346,268     291,720  
                                                       
Transactions with owners, recorded directly in equity
                                                     
Exercise of share options
  422,255     29     10,980     -     -     -     -     -     11,009  
Share-based payment
                          22,872                       22,872  
Issue of shares arising from issue of restricted share units
  222,805     -     15     -     -     -     -     -     15  
Share issue costs
  -     -     (4 )   -     -     -     -     -     (4 )
Repurchase of ordinary shares
  (882,419 )   (58 )   -     58     -     -     -     (57,892 )   (57,892 )
Share repurchase costs
  -     -     -     -     -     -     -     (289 )   (289 )
Transfer of exercised and expired share–based awards  
  -     -     -     -     (16,383 )   -     -     16,383     -  
                                                       
Total contributions by and distributions to owners
  (237,359 )   (29 )   10,991     58     6,489     -     -     (41,798 )   (24,289 )
                1                                      
                                                       
Total transactions with owners
  (237,359 )   (29 )   10,991     58     6,489     -     -     (41,798 )   (24,289 )
                                                       
                                                       
Balance at 31 July 2015
  59,869,421     5,008     232,956     363     65,103     6,071     (113,576 )   673,013     868,938  
 
 
6

 
 
ICON Plc

Statement of changes in equity (Audited)
for the year ended 31 December 2014
 
   
 
   
 
   
 
   
Capital
   
Share Based
   
 
   
 
   
 
   
 
 
   
Number
   
Share
   
Share
    Redemption     Payment    
Other
   
Currency
   
Retained
   
Total
 
   
of shares
   
Capital
   
Premium
   
Reserve
   
Reserve
   
Reserves
   
Reserve
   
Earnings
   
Equity
 
          $’000     $’000     $’000     $’000     $’000     $’000     $’000     $’000  
                                                       
Balance at 1 January 2014
  61,587,727     5,168     199,785     100     44,785     6,071     25,885     365,282     647,076  
                                                       
Total comprehensive income for the year:
                                                     
Profit for the year
  -     -     -     -     -     -     -     135,437     135,437  
Other comprehensive income
                                                     
Foreign currency translation
  -     -     -     -     -     -     (84,923 )   -     (84,923 )
                                                       
Total other comprehensive income
  -     -     -     -     -     -     (84,923 )   135,437     50,514  
                                                       
Total comprehensive income for the year
  -     -     -     -     -     -     (84,923 )   135,437     50,514  
                                                       
Transactions with owners, recorded directly in equity
                                                     
Exercise of share options
  926,407     74     22,182     -     -     -     -     -     22,256  
Share-based payment
                          22,725                       22,725  
Issue of shares arising from issue of restricted share units
  233,726     -     18     -     -     -     -     -     18  
Share issue costs
  -     -     (20 )   -     -     -     -     -     (20 )
Repurchase of ordinary shares
  (2,640,610 )   (205 )   -     205     -     -     -     (140,030 )   (140,030 )
Share repurchase costs
  -     -     -     -     -     -     -     (1,032 )   (1,032 )
Transfer of exercised and expired share–based awards
  -     -     -     -     (8,896 )   -     -     8,896     -  
                                                       
Total contributions by and distributions to owners
  (1,480,477 )   (131 )   22,180     205     13,829     -     -     (132,166 )   (96,083 )
                                                       
                                                       
Total transactions with owners
  (1,480,477 )   (131 )   22,180     205     13,829     0     0     (132,166 )   (96,083 )
                                                       
                                                       
Balance at 31 December 2014
  60,106,780     5,037     221,965     305     58,614     6,071     (59,038 )   368,553     601,507  
 
 
7

 
 
ICON Plc

Notes to the unaudited financial statements for the interim period ended 31 July 2015
 
1.
Basis of preparation and significant accounting policies
 
 
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company’s financial statements.
 
 
Basis of preparation

 
The Company’s unaudited interim financial statements (‘the interim financial statements’) have been prepared in accordance with measurement and recognition principles of International Financial Reporting Standards (‘IFRS’) and their interpretations issued by the International Accounting Standards Board (‘IASB’) as adopted by the European Union (‘EU’), that are effective as at 31 July 2015.

 
These non-statutory unaudited interim financial statements have been prepared solely to present information about the Company on a stand-alone basis for filing with the Company Registration Office. Separately prepared statutory annual financial statements have been prepared in accordance with Company Law and have been laid before the Annual General Meeting of the Company on 24 July 2015. These annual statutory financial statements will be filed with the Companies Registration Office with the 2014 Annual Return. These financial statements include the financial statements of the Company and all of its branches (Italy, Latvia, Lithuania and Poland); all inter branch transactions and balances have been eliminated in their preparation.

 
The interim financial statements of the Company were approved for issue by the Board of Directors on 27 August 2015.

 
Turnover

 
The Company earns revenue from contract research services provided in Italy, Latvia, Lithuania and Poland and recognises revenue as such services are provided. The costs of providing such services are remunerated on a cost plus basis by a fellow group undertaking. Turnover represents the invoiced fair value (excluding value added tax) to the fellow group undertaking for services provided during the period. The Company also earns revenue by recharging subsidiary undertakings for management services provided to them. Turnover represents the invoiced fair value (excluding value added tax) plus a mark-up for those services.

 
Intangible assets – computer software

 
Intangible assets are stated at cost less accumulated amortisation and impairment losses. Useful lives of intangible assets are reviewed and adjusted if appropriate at each reporting date. Residual value is estimated to be zero. Amortisation is charged to the income statement on a straight line basis over the estimated useful lives of intangible assets, currently estimated as follows:
 
   
Years
 
Computer software
     2-8
 
 
Foreign currencies

 
The presentation currency of the Group and Company is US Dollars ($). The functional currency of the Company is Euros. The Company financial statements have been presented in US dollars due to the Company’s international operations and profile. The foreign currency exchange differences arising from the translation of the financial statements of the company and its branches to US dollars are transferred to the foreign currency translation reserve. Transactions in currencies other than Euro are recorded at the rate ruling at the date of the transaction or at a contracted rate. Monetary assets and liabilities denominated in currencies other than Euro are translated at exchange rates prevailing at the statement of financial position date. Adjustments resulting from these transactions are charged or credited to income.

 
 
8

 

ICON Plc

Notes (continued)
 
1.
Accounting policies (continued)
 
 
Property, plant and equipment

 
Items of property, plant and equipment are stated at cost less accumulated depreciation and any provisions for impairment losses.

 
Depreciation is calculated to write off the original cost of property, plant and equipment less its estimated residual value over its expected useful lives on a straight line basis. Residual values and useful lives of property, plant and equipment are reviewed and adjusted if appropriate at each reporting date. At present it is estimated that all items of property, plant and equipment have no residual value. The estimated useful lives applied in determining the charge to depreciation are as follows:
 
   
Years
 
Computer software
     2-8
  Office furniture and fixtures         8

 
Leasehold improvements are amortised using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter.

 
On disposal of property, plant and equipment the cost and related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the income statement.

 
The carrying amounts of property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. Where such an indication exists an impairment review is carried out. An impairment loss is recognised whenever the carrying amount of an asset or its cash generation unit exceeds its recoverable amount. Impairment losses are recognised in the income statement unless the asset is recorded at a re-valued amount, in which case it is firstly dealt with through the revaluation reserve with any residual amount being transferred to the income statement.

 
Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the replaced item can be measured reliably. All other repair and maintenance costs are charged to the income statement during the financial period in which they are incurred.
 
 
9

 
 
ICON Plc

Notes (continued)
 
1.
Accounting policies (continued)
 
 
Investments in subsidiaries

 
Investments in subsidiary undertakings are stated at cost less provision for impairment in the Company’s statement of financial position. Non-trading loans to subsidiary undertakings are initially recorded at fair value in the Company statement of financial position and subsequently at amortised cost using an effective interest rate methodology.

 
Share based payments received by employees of subsidiary undertakings without a related recharge / payment from the subsidiary undertaking, is considered a gift to that subsidiary undertaking, and as a result increases the investment in the subsidiary undertaking.

 
Other receivables

 
Other receivables are initially measured at fair value and are thereafter measured at amortised cost using the effective interest rate method less any provision for impairment. A provision for impairment of other receivables is recognised when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Impairment losses, and any subsequent recovery of such losses, are recognised in the income statement within ‘other operating expenses’.

 
Cash and cash equivalents

 
Cash and cash equivalents include cash and highly liquid investments with initial maturities of three months or less and are stated at cost, which approximates market value.

 
Accounts payable

 
Account payable are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

 
Share capital

 
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 
Where ordinary shares are repurchased by the Company they are cancelled and the nominal value of the shares is transferred to a capital redemption reserve fund within equity.
 
 
10

 

ICON Plc

Notes (continued)
 
 
1.
Accounting policies (continued)
 
 
Employee benefits

 
(a) Pension and other post-employment benefits
 
The Company operates a defined contribution pension plan. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Contributions to defined contribution pension plans are expensed as incurred.

 
(b) Share-based payments
 
Share-based payments comprise options to acquire ordinary shares in the Company, restricted share units (RSUs) and performance share units (PSUs) in the form of ordinary share entitlements after a certain period of time. These are awarded to the certain key employees of the Group based on service conditions such as term of employment and individual performance. The fair value of options, RSUs and PSUs granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the individual become unconditionally entitled to the options, RSU or PSU. The fair value of options granted is measured using a binomial lattice model, taking into account the terms and conditions upon which the options were granted. The fair value of RSUs and PSUs is equal to the market price at date of grant. The total amount to be expensed is determined by reference to the fair value of the options, RSUs or PSUs granted, excluding the impact of any non-market service and performance vesting conditions (for example profitability, sales growth targets). There are no such non-market vesting conditions during the period in relation to options or RSUs that are expected to vest. The amount recognised as an expense is adjusted to reflect the actual number of share options, RSUs or PSUs that vest.
 
 
The share-based payment expense associated with the plans is recognised by the entity which receives services in exchange for the share-based payment compensation. Share-based payment expense is recognised over the requisite service period for awards of equity instruments to employees based on the grant date fair value of those awards expected to ultimately vest. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates.
 
 
The income statement of the Company is charged with the expense related to the services received by the Company. The remaining portions of the share-based payments represent a contribution to Company entities and are added to the carrying amount of those investments. Under an agreement, the subsidiaries pay the Company an amount equal to the value of the ordinary shares issued that is in excess of the award exercise price with such amount reducing theCompany’s investment in its subsidiaries. The net effect of the grant date fair value of the Company’s share-based compensation to employees of the Company’s subsidiaries and recharges received from those subsidiaries is presented as a movement in financial fixed assets.
 
 
Direct costs

 
Direct costs consist of compensation, associated employee benefits and share-based payments for project-related employees and other direct project-related costs.
 
 
11

 
 
ICON Plc

Notes (continued)
 
1.
Accounting policies (continued)
 
 
Other operating expenses

 
Other operating expenses consist of compensation, associated employee benefits and share-based payments for non-project-related employees and other indirect costs associated with the business. Other operating expenses also includes depreciation expenses and the amortisation of intangible assets.


 
Financing income

 
Interest income is recognised in the income statement as it accrues, using the effective interest rate method and includes interest receivable on funds invested and actuarial gains on pension plan assets. Financing income also includes dividends received from group undertakings.
 
 
12

 

ICON Plc

Notes (continued)
 
1.
Accounting policies (continued)
 
 
Income tax

 
Income tax expense in the income statement represents the sum of income tax currently payable and deferred income tax.

 
Income tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement as it excludes items of income or expense that are taxable or deductible in other years and further excludes items that are not taxable or deductible. The Company’s liability for income tax is calculated using rates that have been enacted or substantially enacted at the reporting date. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity.

 
Deferred income tax is provided, using the liability method, on all differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except those arising from non-deductible goodwill or on initial recognition of an asset or liability which affects neither accounting nor taxable profit. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is expected to be realised or the liability to be settled.

 
Deferred tax assets are recognised for all deductible differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred income tax asset to be utilised.

 
Leased assets

 
Expenditure on leases other than finance leases, namely 'operating leases', is charged to the income statement on a basis representative of the benefit derived from the asset, on a straight line basis over the lease period.
 
2.
Turnover
           
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
               
 
Activity
           
 
Management services
  17,842     35,750  
 
Clinical research income
  17,116     38,659  
               
      34,958     74,409  
 
 
13

 
 
ICON Plc

Notes (continued)
 
2.
Turnover(continued)
           
               
 
Geographical area
           
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Ireland
  17,842     35,750  
 
Europe
  17,116     38,659  
               
      34,958     74,409  
 
3.
Direct costs
           
               
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Payroll and related costs
 
14,897
   
28,947
 
 
Other project related expenses
 
769
   
1,978
 
               
     
15,666
   
30,925
 
 
4.
Other operating expenses
           
               
       Period ended    
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Payroll and related costs
 
11,095
   
17,881
 
 
Administrative expenses
 
12,450
   
30,802
 
 
Depreciation expense
 
163
   
423
 
 
Amortisation of intangible assets – computer software
 
85
   
186
 
 
Other income
 
(40
)  
(145
 
Exchange gain
  (1,210 )   (946
               
     
22,543
   
48,201
 
 
 
14

 

ICON Plc

Notes (continued)
 
5.
Profit on disposal of subsidiary undertakings
           
               
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Profit on disposal of subsidiary undertakings
 
350,000
   
-
 
               
     
350,000
   
-
 
 
 
On 30 July 2015 the Company sold a 13% shareholding in its subsidiary ICON Clinical Research Limited to ICON Investments Four, a fellow Group company, for total proceeds of $350 million. This subsidiary had a $nil original cost and therefore the part disposal resulted in a profit on disposal of $350 million which has been recorded in the income statement during the period ended 31 July 2015.

6.
Financing income
           
               
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Dividend income
 
-
   
141,030
 
 
 
15

 
 
ICON Plc

Notes (continued)
 
7. Income tax expense            
               
The components of the current and deferred tax expense for the period ended 31 July 2015 and year ended 31 December 2014 were as follows:        
         
     
Period ended
31 July
2015
   
Year ended
31 December
2014
 
      $’000     $’000  
 
Current tax expense
           
 
Current period/year
  403     1,054  
 
Under /(over) provided in prior years
  209     (163 )
               
      612     891  
 
Deferred tax charge/(credit)
           
 
Origination and reversal of temporary differences
  (2 )   (5 )
 
Over provided in prior years
  (119 )   (10 )
      (121 )   (15 )
               
 
Total income tax expense in the income statement
  491     876  
 
    A reconciliation of the expected tax expense, computed by applying the standard Irish tax rate to income before tax to the actual tax expense, is as follows:
 
     
Period ended
31 July
2015
   
Year ended
31 December
2014
 
      $’000     $’000  
               
 
Profit before tax
  346,749     136,313  
               
 
Taxes at Irish standard tax rate of 12.5% (2014: 12.5%)
  43,344     17,039  
               
 
Effects of:
           
 
Non-taxable income and non-tax deductible expenses
  (43,012 )   (16,357 )
 
Reversal of prior year under/(over) provision in respect of
           
 
current foreign taxes
  90     (173 )
 
Foreign and other income taxed at higher rates
  174     321  
 
Other
  (105 )   46  
               
 
Tax expense on profit for the period/year
  491     876  
 
 
16

 
 
ICON Plc

Notes (continued)
 
7. Income tax expense(continued)            
               
 
The net deferred tax assets at 31 July 2015 and 31 December 2014, were as follows:
           
               
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
      2015     2014  
      $’000     $’000  
 
Deferred taxation assets:
           
 
Accrued expenses and payments on account
  425     274  
 
Property, plant and equipment
  69     106  
 
Loans to subsidiaries
  52     52  
               
 
Total deferred taxation assets
  546     432  
               
 
Deferred taxation liabilities:
           
 
Property, plant and equipment
  (15 )   (21 )
 
Accrued expenses and payments on account
  -     (1 )
               
 
Total deferred taxation liabilities
  (15 )   (22 )
               
 
Net deferred taxation asset
  531     410  
 
    The movement in temporary differences during the period ended 31 July 2015 and year ended 31 December 2014 was as follows:
 
     
Balance
       
Balance
 
     
1 January
 
Recognised in
   
31 July
 
      2015  
Income
    2015  
      $’000   $’000     $’000  
 
Deferred taxation assets
               
 
Accrued expenses and payments on account
  274   151     425  
 
Property plant and equipment
  106   (37 )   69  
 
Loans to subsidiaries
  52   -     52  
                   
 
Total deferred taxation assets
  432   114     546  
                   
 
Deferred taxation liabilities
               
 
Property, plant and equipment
  (21 ) 6     (15 )
 
Accrued expenses and payments on account
  (1 ) 1     -  
                   
 
Total deferred taxation liabilities
  (22 ) 7     (15 )
                   
 
Net deferred taxation asset
  410   121     531  
 
 
17

 
 
ICON Plc

Notes (continued)
 
7.
Income tax expense (continued)
               
                   
     
Balance
       
Balance
 
     
1 January
 
Recognised in
   
31 December
 
      2014  
Income
    2014  
      $’000   $’000     $’000  
 
Deferred taxation assets
               
 
Accrued expenses and payments on account
  270   4     274  
 
Property plant and equipment
  105   1     106  
 
Loans to subsidiaries
  52   -     52  
                   
 
Total deferred taxation assets
  427   5     432  
                   
 
Deferred taxation liabilities
               
 
Property, plant and equipment
  (29 ) 8     (21 )
 
Accrued expenses and payments on account
  (3 ) 2     (1 )
                   
 
Total deferred taxation liabilities
  (32 ) 10     (22 )
                   
 
Net deferred taxation asset
  395   15     410  
 
 
At 31 July 2015 and 31 December 2014 the Company had no net operating loss carry forwards for income tax purposes and there were no deferred tax assets that have not been recognised.
 
 
18

 
 
ICON Plc

Notes (continued)
 
8.
Share-based payments
 
 
The Company operates a number of share based payment plans in which employees of the Group participate, including a number of share options plans and a restricted share unit plan, further details of which are set out in note 10 of the Group’s Annual Report for the year ended 31 December 2014, which is available publically and can be obtained at http://investor.iconplc.com/annuals.cfm.

 
Share options outstanding and exercisable at 31 July 2015 were as follows:
 
   
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
  259,059     $68.25     $19.75     -  
Exercised
  (422,255 )   $26.07     $10.03     -  
Forfeited
  (46,648 )   $23.47     $10.02     -  
                         
Outstanding at July 31, 2015
  2,017,856     $33.67     $11.70     4.85  
                         
Exercisable at July 31, 2015
  962,227     $25.88     $9.89     3.50  
 
Restricted Share Units (“RSU’s”) and Performance Share Units (“PSU’s”) outstanding at 31 July 2015 were as follows:
 
   
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
  269,875     $68.06           378,804     $66.85     -  
Shares vested
  -     -           (222,805 )   $25.36     -  
Forfeited
  (3,981 )   $31.49           (44,570 )   $39.48     -  
                                     
Outstanding at July 31, 2015
  935,065     $47.24     1.72     1,150,425     $47.35     1.92  
 
 
19

 
 
ICON Plc

Notes (continued)
 
8.
Share-based payments (continued)

The Company accounts for share-based awards in accordance with IFRS 2 Share-based Payments. The grant date fair value of these awards is calculated using a binomial lattice model and expensed to the income statement over the period the related service is received. Operating profit for the period is stated after charging $5.6 million (2014: $7.6 million) in respect of share-based payments expense, representing the portion of the overall Group charge which relates to share-based awards granted to employees of the Company. Share-based payment expense has been recorded in the income statement as follows:
 
   
Period Ended
31 July
2015
   
Year Ended
31 December
2014
 
    $’000     $’000  
             
Other operating expenses
  5,557     7,567  
             
Total
  5,557     7,567  
 
 
20

 
 
ICON Plc

Notes (continued)
 
9.
Property, plant and equipment
                       
     
Leasehold
   
Computer
   
Office
furniture &
       
     
improvements
   
equipment
   
fixtures
   
Total
 
      $’000     $’000     $’000     $’000  
 
Cost
                       
 
At 1 January 2015
  852     1,834     1,370     4,056  
 
Disposals
  -     -     (23 )   (23 )
 
Foreign currency movement
  (63 )   (136 )   (102 )   (301 )
                           
 
At 31 December 2015
  789     1,698     1,245     3,732  
                           
 
Depreciation
                       
 
At 1 January 2014
  756     1,602     1,084     3,442  
 
Charge for the period
  16     75     72     163  
 
Eliminated on disposals
  -     -     (23 )   (23 )
 
Foreign currency movement
  (56 )   (118 )   (80 )   (254 )
                           
 
At 31 July 2015
  716     1,559     1,053     3,328  
                           
 
Net book value
                       
 
At 31 July 2015
  73     139     192     404  
                           
 
At 31 December 2014
  96     232     286     614  
 
 
21

 
 
ICON Plc
 
Notes to the unaudited financial statements for the interim period ended 31 July 2015
 
9. Property, plant and equipment (continued)                        
                           
     
Leasehold
   
Computer
   
Office
furniture &
       
     
improvements
   
equipment
   
fixtures
   
Total
 
      $’000     $’000     $’000     $’000  
 
Cost
                       
 
At 1 January 2014
  980     2,017     1,563     4,560  
 
Additions
  2     85     3     90  
 
Foreign currency movement
  (130 )   (268 )   (196 )   (594 )
                           
 
At 31 December 2014
  852     1,834     1,370     4,056  
                           
 
Depreciation
                       
 
At 1 January 2014
  817     1,636     1059     3,512  
 
Charge for the year
  55     194     174     423  
 
Foreign currency movement
  (116 )   (228 )   (149 )   (493 )
                           
 
At 31 December 2014
  756     1,602     1,084     3,442  
                           
 
Net book value
                       
 
At 31 December 2014
  96     232     286     614  
                           
 
At 31 December 2013
  163     381     504     1,048  
 
 
22

 
 
ICON Plc
 
Notes (continued)
 
10. Intangible assets      
         
     
Computer Software
$’000
 
 
Cost:
     
 
At 1 January 2015
  1,148  
 
Additions
  60  
 
Foreign exchange movement
  (90 )
         
 
At 31 July 2015
  1,118  
         
 
Accumulated amortisation:
     
 
At 1 January 2015
  951  
 
Arising during the period
  85  
 
Foreign exchange movement
  (70 )
         
 
At 31 July 2015
  966  
         
 
Net book value:
     
 
At 31 July 2015
  152  
         
 
At 31 December 2014
  197  

 
 
 
Cost:
     
 
At 1 January 2014
  1,396  
 
Additions
  106  
 
Disposals/reclassifications
  (192 )
 
Foreign exchange movement
  (162 )
         
 
At 31 December 2014
  1,148  
         
 
Accumulated amortisation:
     
 
At 1 January 2014
  892  
 
Arising during the year
  186  
 
Foreign exchange movement
  (127 )
         
 
At 31 December 2014
  951  
         
 
Net book value:
     
 
At 31 December 2014
  197  
         
 
At 31 December 2013
  504  
 
 
23

 
 
ICON Plc
 
Notes (continued)
 
11. Investment in subsidiaries                  
                     
     
Investment in Subsidiary Undertakings
$’000
   
Long Term
Advances to Subsidiary Undertakings
$’000
   
Total
$’000
 
                     
 
Cost:
                 
 
At 1 January 2015
  436,030     32,094     468,124  
 
Share based payments
  17,318     -     17,318  
 
Share subscription payment from subsidiary companies
  (41,501 )   -     (41,501 )
 
Foreign exchange movement
  (40,277 )   (2,927 )   (43,204 )
                     
 
At 31 July 2015
  371,570     29,167     400,737  
                     
                     
     
Investment in Subsidiary Undertakings
$’000
   
Long Term Advances to Subsidiary Undertakings
$’000
   
Total
$’000
 
 
Cost:
                 
 
At 1 January 2014
  488,337     36,473     524,810  
 
Additions (2)
  13,283     -     13,283  
 
Share based payments
  15,160     -     15,160  
 
Share subscription payment from subsidiary companies
  (20,497 )   -     (20,497 )
 
Foreign exchange movement
  (60,253 )   (4,379 )   (64,632 )
                     
                     
 
At 31 December 2014
  436,030     32,094     468,124  
 
(1)
On 30 July 2015 the Company sold a 13% shareholding in its subsidiary ICON Clinical Research Limited to ICON Investments Four, a fellow Group company, for total proceeds of $350 million. This subsidiary had a $nil original cost and therefore the part disposal resulted in a profit on disposal of $350 million which has been recorded in the income statement during the period ended 31 July 2015.

(2)
In December 2014 the Company made a capital contribution of $13.3 million to its subsidiary ICON Medical Imaging AG.
 
 
24

 
 
ICON Plc
 
Notes (continued)
 
12. Other current assets
 
   
31 July
   
31 December
 
   
2015
   
2014
 
    $’000     $’000  
             
Prepayments
  1,269     1,503  
Other receivables
  2,409     1,448  
             
Total
  3,678     2,951  
 
13. Share capital
 
 
Authorised share capital:
       No. of Ordinary Shares  
             
Ordinary shares of par value €0.06
        100,000,000  
             
             
             
             
   
31 July
   
31 December
 
   
2015
   
2014
 
    $’000     $’000  
             
Allotted, called up and fully paid
           
59,869,421 (31 December 2014: 60,106,780) ordinary shares of €0.06 each
  5,008     5,037  
             
   
31 July
   
31 December
 
    2015     2014  
    $’000     $’000  
             
Issued, fully paid share capital
           
At beginning of period/year
  5,037     5,168  
Exercise of share options
  29     74  
Repurchase of ordinary shares
  (58 )   (205 )
             
At end of year
  5,008     5,037  

Rights of Ordinary Shares

Holders of ordinary shares will be entitled to receive such dividends as may be recommended by the Board of Directors of the Company and approved by the Shareholders and/or such interim dividends as the board of Directors of the Company may decide. On liquidation or a winding up of the Company, the par value of the ordinary shares will be repaid out of the assets available for distribution among the holders of the ordinary shares of the Company. Holders of ordinary shares have no conversion or redemption rights. On a show of hands, every holder of an ordinary share present in person or proxy at a general meeting of shareholders shall have one vote, for each ordinary share held with no individual having more than one vote.
 
 
25

 
ICON Plc
 
Notes (continued)
 
13. Share capital (continued)

Share issues

During the period ended 31 July 2015, 422,255 share options were exercised by employees for total proceeds of $11.0 million. During the period ended 31 July 2015 222,805 ordinary shares were issued in respect of RSU’s previously awarded by the Company for total proceeds of $15,000.

During the year ended 31 December 2014, 926,407 share options were exercised by employees for total proceeds of $22.3 million. During the year ended 31 December 2014, 233,726 ordinary shares were issued in respect of certain RSU’s previously awarded by the Company for total proceeds of $18,000.


Share repurchase programme
 
On 1 May 2015 the Company commenced a buyback program under which the Company could acquire its outstanding ordinary shares (by way of redemption), in accordance with Irish law, the United States securities laws and the Company’s constitutional documents through open market share acquisitions.
 
The buyback program gave a broker authority to acquire the Company’s ordinary shares from time to time on the open market in accordance with agreed terms and limitations up to $60 million. The acquisition of shares pursuant to the buyback program was effected by way of redemption and cancellation of the shares, in accordance with the Constitution of the Company.
 
During the interim period ended 31 July 2015, 882,419 ordinary shares were redeemed by the Company under this buyback program for a total consideration of $58.2 million. All ordinary shares that were redeemed under the buyback program were cancelled in accordance with the Constitution of the Company and the nominal value of these shares transferred to a capital redemption reserve fund as required under Irish Company Law.
 
On 28 July 2015 the Company announced a further buyback program of up to $400 million under which the Company can acquire its outstanding ordinary shares (by way of redemption), in accordance with Irish law, the United States securities laws and the Company’s constitutional documents through open market share acquisitions. The buyback program gives a broker authority to acquire the Company’s ordinary shares from time to time on the open market in accordance with agreed terms and limitations. The acquisition of shares pursuant to the buyback program will be effected by way of redemption and cancellation of the shares, in accordance with the Constitution of the Company.
 
 
26

 
ICON Plc
 
Notes (continued)
 
14. Capital and reserves
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Ordinary share capital
  5,008     5,037  
 
Share premium
  232,956     221,965  
 
Share based payment reserve
  65,103     58,614  
 
Capital redemption reserve
  363     305  
 
Other reserves
  6,071     6,071  
 
Foreign currency translation reserve
  (113,576 )   (59,038 )
 
Retained Earnings
  673,013     368,553  
               
 
Total
  868,938     601,507  
 
Share based payment reserve
 
The grant date fair value of share-based awards is calculated using a binomial lattice model and recorded in the Company financial statements over the period the related service is received, as an expense in the income statement in respect of awards to Company employees and as a financial asset in respect of awards to other Group employees, with a corresponding increase in the share-based payments reserve in both cases. On exercise or forfeiture of the award, an amount equal to the grant date fair value is transferred from the share-based payments reserve to retained earnings.

Capital redemption reserve
The Capital Redemption Reserve comprises the nominal value of shares repurchased and cancelled by the Group and transferred from share capital to the capital redemption reserve fund, as required under Irish Group Law. During the period ended 31 July 2015, 882,419 (31 December 2014: 2,640,610) ordinary shares were repurchased and cancelled by the Group.

Other reserves
In 2005 the Company recognised a share-based payment charge of $6.1 million, representing the fair value of 576,000 ordinary shares held by Dr. John Climax and Dr. Ronan Lambe, the founding Directors of the Company, which were transferred to Mr. Peter Gray, the then Chief Executive Officer of the Company.

Foreign currency translation reserve
The currency reserve comprises all foreign exchange differences arising from the translation of the financial statements of the company and its branches since 1 June 2004, the date of transition to IFRS.

Retained earnings
In addition to the profit for the period a credit of $16.4 million (2014: $8.9 million) has been recognised during the year in respect of the grant date fair value of exercised and expired share-based awards transferred from the Share-based payments reserve.
 
 
27

 
 
ICON Plc
 
Notes (continued)
 
15. Related parties
 
 
The Company entered into the following transactions with subsidiary companies during the period:
 
     
Period ended
   
Year ended
 
     
31-Jul
   
31-Dec
 
     
2015
   
2014
 
      $’000     $’000  
 
Income Statement:
           
 
Management services
  17,842     35,750  
 
Profit on disposal of interest in subsidiaries (1)
  350,000     -  
 
Dividend received from subsidiary undertaking (2)
  -     141,030  
               
               
 
Total
  367,842     176,780  
               
 
Cash Flow Statement
           
 
Increase in intercompany debtors and investments
  (216,543 )   (10,667 )
               
               
 
Total
  (216,543 )   (10,667 )

 
(1)
On 30 July 2015 the Company sold a 13% shareholding in its subsidiary ICON Clinical Research Limited to ICON Investments 4, a fellow Group company (see note 11).

(2)
During 2014 the Company received dividends from its subsidiary undertaking ICON Clinical Research Limited for $140 million.
 
 
28

 

ICON Plc
 
Notes (continued)
 
15. Related parties (continued)
   
   
   
  The aggregate payroll costs of Directors of the Company for the period ended 31 July 2015 was as follows: 
 
     
Period ended
   
Year ended
 
     
31 July
   
31 December
 
     
2015
   
2014
 
      $’000     $’000  
               
 
Salary and fees
  1,483     2,330  
 
Bonus
  1,210     5,393  
 
Other benefits
  17     196  
 
Pension costs for defined contribution pension schemes
  77     62  
 
Share-based payment
  4,353     5,944  
               
 
Total
  7,140     13,925  
 
 
Further information in relation to the remuneration of Directors and Executive Officers is set out in the Compensation and Organisation report in the Group’s Annual Report for the year ended 31 December 2014, which is available publically and can be obtained at http://investor.iconplc.com/annuals.cfm.
 
 
29

 
 
ICON Plc
 
Notes (continued)
 
16. Commitments and Contingencies
   
  The Company has several non-cancellable operating leases that expire over the next 3 years. These leases generally contain renewal options and require the company to pay all executory costs such as maintenance and insurance. The company recognised $1.5 million and $3.2 million in rental expense (including rates) for the interim period ended July 31, 2015 and the year ended December 31, 2014 respectively. Future minimum rental commitments for opening leases with non-cancellable terms in excess of one year are as follows:
 
     
Minimum rental
 
     
payments
 
      $’000  
 
2015
  1,070  
 
2016
  2,252  
 
2017
  1,760  
 
2018
  1,027  
 
Thereafter
  -  
         
 
Total
  6,109  

 
17.
The Company is not party to any litigation or other legal proceedings that the Company believes could reasonably be expected to have a material adverse effect on the Company’s business, results of operations and financial position.
 
 
18.
Group relationships and controlling parties
   
 
The Company is a public limited company incorporated in the Republic of Ireland. The Company’s ordinary shares are traded on the NASDAQ market. The Company prepares consolidated financial statements for itself and its subsidiary undertakings. These consolidated financial statements may be obtained from the Company’s website www.iconplc.com.
   
19.
Approval of financial statements
   
  The board of directors approved these financial statements on 27 August 2015. 
   
 
 
30